Brown causes chaos by insisting on car tax rise

The Tories claimed the government was in "chaos" over the issue as Mr Brown side-stepped his own ministers' suggestion of a U-turn.

Yesterday, Cabinet ministers Jack Straw and John Hutton signalled a possible retreat on the Budget's planned 2p rise in fuel duty and £200 hike in vehicle excise duty.

But today No10 insisted any future decisions were a matter for Chancellor Alistair Darling and made a staunch defence of the need to tax polluting cars - including those that were bought before the Budget.

At a meeting in Scotland with oil industry chiefs, the PM and Mr Darling focused instead on new moves to protect the public from soaring global prices.

Fresh measures to get more oil out of the North Sea through new licences for exploration were unveiled. In a further move, ministers will later this week announce new plans to help the elderly with fuel bills.

Mr Brown's Downing Stre e t spokesman left open the possibility of a "hypothetical" change to the fuel and road taxes, but made clear the Treasury needed the money that would be raised from the increases in duty.

He added: "The most effective action the Government can take to address the concerns of motorists is to work with our international partners to bring greater stability to the oil market."

Labour MPs believe it is unfair to impose retrospective road tax increases on people who bought family cars years ago, but the spokesman insisted told cars were no different from new cars when it came to environmental impact.

When asked whether Mr Hutton and Mr Straw were authorised to speak on taxes, the spokesman said: "The key thing is what the Chancellor and the Treasury say."

After fears among Labour MPs that the subject could be as damaging as the 10p tax row, Shadow Chancellor George Osborne seized on the different signals being sent out on the issue.

He said: "The least you could expect of a government in an economic downturn is that they speak with one voice on tax policy. But such is the chaos now engulfing Gordon Brown.

"The sooner he stops dithering, overrules his Chancellor and abandons these stealthy plans to tax family cars at the very moment people are feeling the pinch, the better."

No10 also dismissed claims that there would be a windfall to the Treasury in higher taxes from the oil price spike. But tax experts estimate Mr Darling will this year rake in an extra £6billion from VAT and other tax rises linked to oil.