Darling reassures MPs over 10p tax

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The row threatened to erupt again after Treasury Chief Secretary Yvette Cooper suggested in a television interview on Wednesday night that only the compensation package for pensioners under 65 would be backdated.

Her intervention drew an angry rebuke from the leader of the Labour tax rebels, Frank Field, who accused her of being "badly briefed".

In an interview with the BBC Radio 4 programme, he insisted that he had an assurance from Prime Minister Gordon Brown that the entire package would be backdated to April 1 - the start of the current tax year.

And he warned that MPs would not take kindly to any attempt to tamper with the deal which he had hammered out with ministers.

"This is an agreement that the Prime Minister actually put his stamp on," he said. "This package is now felt to be owned by the House of Commons. The House of Commons is aggrieved that we got ourselves into a position where some of the poorest in work appeared to be punished by these tax changes. Nobody wants that to happen.

"There will be a compensation package, it will be backdated. This is a package which is owned by the House of Commons and I am sure that the Government will want to fall into line with that."

In the Commons, Mr Darling said that average losses suffered by low paid workers this year as a result of the tax changes would be "offset" - although he refused to use the word "backdated".

"Our focus is to ensure that we allow the average losses from the abolition of the 10p band to be offset for this year," he said.

His comments appeared to reassure Labour MPs. Nevertheless the flare-up underlined the volatile mood among MPs after Mr Brown's dramatic climbdown on Wednesday in the face of a potentially catastrophic Commons revolt.