Only a small number of taxpayers have been compensated to date, but with 13,000 complaints having been received so far, and 186,000 claims outstanding, the payments could start adding up to a massive bill.

In addition the Revenue is struggling to cope with the sheer volume of complaints and is drafting in extra staff, BBC Online reported. Payments can range from £25 to as high as £500 depending on the nature of the complaints.

The Revenue has been trying to play down the level of complaints received so far, saying they are only a tiny percentage of the 5.8 million tax credits that have already been paid. It said it expecting to pay out 5,600 of the 13,000 complaints received so far.

Revenue boss Sir Nick Montagu and paymaster general Dawn Primarolo have already been raked over the coals by MPs for the tax credits shambles.