Mugabe, in power since independence from Britain in 1980, also mocked one of his critics, Roman Catholic Archbishop Pius Ncube, saying he needed prayers after being sued for adultery on Monday.
The veteran Zimbabwean leader accused London of continuing to seek ways to topple him, suggesting that Britain had tried to encourage a coup in exchange for helping the country, which is mired in a deep political and economic crisis.
"They (the military) have refused to be tempted to go against their own people," Mugabe told thousands of people at the National Heroes Acre shrine in Harare during the burial of a senior army officer.
"The British thought that because of the suffering here there would be a coup. They were dangling the coup as if it were a cake ... but they (the military) were able to distinguish the enemy's bait from true help," he said.
Mugabe, 83, who plans to stand for another five-year presidential term next year, accuses the West of working with the opposition and businesses to overthrow his government.
Critics say Mugabe has increasingly relied on the military and other security agencies to hang on to power despite a severe economic crisis that has seen inflation spiralling above 4,500 percent and unemployment and poverty levels rising.
Last month the government imposed a blanket price freeze -- which authorities intend to extend indefinitely -- after accusing businesses of unfairly hiking prices as part of a wider plot by the West to remove Mugabe from office.
"GNASHING OF TEETH"
On Wednesday Mugabe said the price crackdown would continue, warning business that his government was ready for a long battle, which it would win.
He said former U.S. Ambassador to Zimbabwe Christopher Dell, who last month predicted Mugabe's government would collapse in six months, had failed in his mission to implement regime change and had "run away" in defeat.
"Those who are not bringing goods to the market thinking there will be gnashing of teeth because there will be shortages, it's not our teeth that will be gnashing, but theirs," Mugabe said in the local Shona language to roars of applause.
He said his government would continue to work with industry but would intervene to make prices affordable to the majority.
Consumers have cheered the price cuts, which have fed a shopping frenzy, but basic goods like maize-meal, cooking oil and sugar have disappeared from shops as manufacturers are unwilling to produce at a loss.
Mugabe has said his government could seize businesses that stopped producing.
Mugabe took a swipe at Archbishop Ncube, a leading government critic, charging that he had broken his oath of celibacy after a man in Bulawayo sued Ncube for having a relationship with his wife. Ncube is defending against the adultery allegation in court.
"You are my Archbishop and you made a vow to God, please keep your oath my friend. Taking other people's wives, could that be a good thing?" a grinning Mugabe said, drawing laughter from the gathering.
"Should I now be the one saying let us pray for Pius Ncube? So that he reforms and has good morals? When I go to church I suppose I will pray for him so that God can help him to have good morals," he added.
