John Battle, MP for Leeds West, has joined forces with another former minister to demand a compensation package to help those worst affected by the decision to scrap the 10p income tax rate.

If the Government refuses to back down, Mr Battle, a former energy minister, and Frank Field, a former welfare minister, will attempt to force a Commons vote on the issue.

The two MPs have given Mr Brown until Monday night to meet their ultimatum.

Mr Brown used his last budget as Chancellor to cut the basic rate of income tax from 22p in the pound to 20p.

But the cut was funded almost entirely by the abolition of the 10p starting rate of income tax.

The Institute of Fiscal Studies claims these income tax changes, which took effect on April 6, will leave around 5.3m families earning between £5,400 and £18,500 a year worse off.

Many of these families will be compensated by increased payments through the tax credit system, but not all.

Credit

Mr Battle wants Mr Brown to approve a "supplementary tax credit" to ensure that anyone who earns under £18,000 is not left worse off.

He points out that the average wage in Leeds West is £13,500, compared to the £23,500 British average.

He told the YEP: "There is some common sense in getting rid of the 10p rate but we need a balancing, fair system and that is where a supplementary tax credit is needed.

"We must balance the system to make sure there is proper compensation so those on the low incomes do not lose out."

Despite the tax change having already taken place, the Government is required to pass a Finance Bill through Parliament.

The Bill receives its second reading on Monday night.

Mr Battle says that if by then the Government has not agreed a compensation package, he and Mr Field will table an amendment to the bill at its committee stage.

This could then spark a Labour backbench rebellion in the Commons.

If the amendment was passed it would "withhold" the 10p tax abolition until the Government agreed compensation for those affected.