Labor ministers and whips managed to talk Angela Smith, a parliamentary private secretary (PPS) at the Treasury, out of standing down after she had told colleagues she would quit rather than be forced to support the scrapping of the 10p starting tax rate, when it is voted on in the next two weeks.

‘Smith had concerns about the impact of the tax changes,' a Treasury aide told The Independent. 'She raised those concerns with senior ministers, but that is the end of the matter. She is not resigning from her role as Parliamentary Private Secretary.’

More than 70 Labour MPs are opposing the measure, threatening to cross the floor on the issue causing a defeat for the Government.

Speculations have intensified over the likelihood that Prime Minister Gordon Brown might be forced to bow to demands to compensate the 5.3m people on low income who will lose out.

Further reading:

Brown under fire over 10p starting tax change

Read story in The Independent