George Osborne, the Chancellor, said that the figures showed that “Britain is coming back” the full recovery could not be “taken for granted”.
Economists say the growth shows the economy has entered a “sweet spot” with Britain’s recovery accelerating in the first three months of the year.
Strong services and manufacturing growth have kept the UK on track to surpass its pre-crisis peak this summer.
Mr Osborne said: “Today’s figures show that Britain is coming back – but we can’t take that for granted. We have to carry on working through our long-term economic plan.
“For the first time in a decade all three main sectors of the economy – manufacturing, services and construction – have grown by at least 3% over the last year.
“The impact of the great recession is still being felt, but the foundations for a broad-based recovery are now in place.
“The biggest risk to economic security would be abandoning the plan that is laying those foundations.”
Economists have said the figures reveal a “Goldilocks” moment for the UK economy with growth “neither too hot nor too cold”.
Although gross domestic product (GDP) missed the growth estimate 0.9% the overall feeling is still one of strength in the UK, they said.
According to the Office for National Statistics (ONS) growth had been slightly dragged down by contractions in mining and other production activity.
However GDP is now 3.1 per cent higher in the first quarter than in the same period last year, the best year-on-year growth since 2007.
Growth has been driven by a 0.9 per cent expansion in Britain’s services sector, which accounts for more than three quarters of UK GDP. Manufacturing, which powers around a tenth of the economy also expanded by 1.3 per cent.
Torrential rain in January and February did not have “a significant impact on GDP growth” according to the ONS, but economists said there was evidence that construction output, which grew by 0.3 per cent in the first quarter, was affected by the floods.
It is only a year since the Coalition was faced with the threat of a “triple dip” recession. However, after that was avoided Britain has bounced back faster than any other major western economy.
Recent surveys indicate that confidence is booming among businesses and consumers, with manufacturers reporting strongest level of optimism in more than four decades.
However Labour said the “cost-of-living crisis” had not been solved by the resurgent economy.
Ed Balls, Labour’s shadow Chancellor, said: “Now that growth has finally returned, the question is whether ordinary working people will properly feel the benefit and we have a balanced recovery that’s built to last.
“David Cameron and George Osborne want to tell people the cost-of-living crisis is over, but millions of hardworking people are still feeling no recovery at all.”
Nick Clegg, the Deputy Prime Minister, said the figures are “another welcome sign” that the economy is moving in the right direction.
Deloitte chief economist Ian Stewart said: “The UK economy is in the sweet spot of the economic cycle, with growth powering ahead of our major competitors and inflation falling away.
“Business investment and consumer incomes, two conspicuous gaps in Britain’s recovery, are making a comeback.
“This is the Goldilocks moment for the UK economy, with growth neither too hot nor too cold.”
Jonathan Loynes, of Capital Economics, said there remained concerns over the sustainability of the recovery.
But he added: “For now at least the figures point to a ‘Goldilocks’ scenario of solid, but not excessive, growth which should allow both inflation and interest rates to remain at low levels for some time yet.”
TUC general secretary Frances O’Grady said: “This is the kind of growth we could have seen two or three years ago if the Government had not choked off recovery through cuts, austerity and wage freezes.”