Giving evidence to the Commons home affairs select committee, Lord Irvine said that lawyers " cannot go on living their lives being paid by the hour on a taxi meter".
He said it is "pretty outrageous" that criminal legal aid cases swallowed up 46 per cent of the legal aid budget and sent an ominous warning to lawyers involved in high costs cases.
"I'm going to bear down very very hard on high-cost criminal cases and the main engine of doing that is going to be contracting," he said.
He added: "Legal aid is synonymous in the public mind with lawyers' bank balances and the public paying the cost of restrictive practices, over-manning, over-charging and the high cost of criminal case fees that appear to be grossly high."
Lord Irvine said he was keeping an open mind on the need for reform of the judicial appointments procedure, but defended the current system.
"The beauty of this system is that it's so wide ranging and across so many people that the risk of discrimination or prejudice or the pushing of a particular candidate by one group is reduced considerably.