Elon Musk is to jointly lead a new US Department of Government Efficiency that will advise President-elect Donald Trump’s White House on how to reform and make savings in the federal government.

The billionaire will share the role with former Republican presidential candidate Vivek Ramaswamy, with the department sitting outside of the government but offering “guidance” to the White House.

The role appears to be Mr Musk’s reward for his public and vocal support for Mr Trump’s bid to return to the White House, including relentless posting to X, the social media platform Mr Musk owns, as well as hundreds of millions of dollars raised by a Musk-backed political action committee.

The acronym for the new department, Doge, is a nod to Mr Musk’s favourite cryptocurrency, dogecoin.

It is not yet clear how the organisation will operate, but Mr Trump said in a statement that Mr Musk and Mr Ramaswamy will work from outside the government to offer the White House “advice and guidance” and will partner with the Office of Management and Budget to “drive large-scale structural reform, and create an entrepreneurial approach to government never seen before”, adding the move will shock government systems.

Responding to the announcement on X, Mr Musk said: “Department of Government Efficiency. The merch will be (fire emojis).”

Later, he added: “Threat to democracy? Nope, threat to BUREAUCRACY!!!.”

The billionaire SpaceX and Tesla owner has previously suggested he could find at least two trillion dollars in savings within government spending – nearly a third of its total annual spend.

In his statement, Mr Trump said he wants the organisation to conclude its work by July 4 2026 – the 250th anniversary of the US Declaration of Independence – and said the initiative could become “potentially, the Manhattan Project of our time”.

Downing Street said the Government looks forward to working with Mr Musk and others selected for top US government roles, despite a spat between the billionaire and the Government over the summer riots in the UK.

After three children were killed in a stabbing attack in Southport and violence erupted across the country, X owner Mr Musk promoted on his platform a string of false claims suggesting a civil war in the UK is “inevitable” and attacking Prime Minister Sir Keir Starmer, including using the phrase “two-tier Kier”.

After the reports, Mr Musk posted: “I don’t think anyone should go to the UK when they’re releasing convicted paedophiles in order to imprison people for social media posts.”

His claim about the UK releasing prisoners came after 1,700 inmates were freed early from their sentences in the first phase of the Government’s plan to tackle jail overcrowding. Sex offenders are excluded from the policy.

And Mr Musk has continued to post critical comments on his platform aimed at the Government, writing “This needs to stop” in response to Daily Telegraph columnist Allison Pearson saying she had been visited by Essex Police investigating whether a post she made on X last year could cause racial hatred.

On the UK’s relationship with Mr Musk, the Prime Minister’s official spokesman said: “As the Prime Minister said, we look forward to working with President-elect Trump and his team on a wide range of issues to advance the US and UK relationship.”