Alistair Darling sought yesterday to damp down a renewed Labour revolt over the decision to scrap the 10p tax band, as the Tories prepared to fight the looming Crewe and Nantwich byelection on the issue.

The chancellor told Labour MPs "categorically" that all options were being considered to help the estimated 5.3m people affected by the tax change.

But the final details of his plan are not expected until after the May 22 by-election.

David Cameron said he would exploit the 10p tax issue mercilessly in the election, which his party would win on an 8 per cent swing - the kind of result he needs to win a general election.

The Conservative leader admitted that failing to win a seat that includes the railway town and surrounding Cheshire countryside would be a setback. "If we win it's good - if we don't win, it's bad," he said.

Mr Cameron characterised the by-election as a "long shot", although Ladbrokes, the bookmakers, has made the opposition party odds-on to take the seat, which was left vacant by the death of Gwyneth Dunwoody, who retained it in 2005 with a 7,078 majority.

The unresolved tax issue has the potential to wreak as much damage on May 22 as it did in Labour's rout in local and London mayoral polls last week - stoking the anxiety of the party's MPs in marginal seats.

"People in Crewe will know that the more of them who vote Conservative on May 22, the clearer the message will be to Gordon Brown to do more to help," said Mr Cameron. He refused to say whether he would reinstate the 10p rate or how he would fund a compensation package.

Meanwhile, Mr Darling is under intense pressure to rectify a decision taken by Gordon Brown when he was chancellor. Labour MPs are clamouring to know how he will help those losing out.

The chancellor's office said yesterday that "all options" were being considered, refusing to rule out an expensive - and potentially complicated - increase in personal tax allowances to help those affected.

The chancellor has suggested increased winter fuel allowances to help retirees aged 60 to 64, but is finding it much harder to work out a mechanism to help young workers without children.

Frank Field and Greg Pope, the two leading Labour tax rebels, met Mr Darling yesterday to insist that payments must be backdated to early April.

"The chancellor made the undertaking that he was actively searching for as many of the losers as possible and that he is considering a whole range of methods by which the 10p losers could be compensated," the MPs said.

Mr Brown convened his cabinet to discuss the fallout from last week's elections and to pore over detailed analysis of what went wrong. Deborah Mattinson, the prime minister's polling consultant, said that economic concerns were, unsurprisingly, the single biggest reason for voter discontent.

The mood was said to be "resolute". James Purnell, the work and pensions secretary, said: "It has been a grim weekend, but it's time to get up off the floor."

The scale of Mr Brown's challenge is underlined by a Populus poll in The Times today which shows 55 per cent of Labour voters believe that the party would be more likely to win the next general election if Mr Brown resigned in favour of a younger leader. Overall support for Labour slipped to 29 per cent, trailing the Conservatives by 11 points, according to the poll, taken after last week's elections.

Charles Clarke, the former home secretary, delivered a withering critique of Mr Brown's style and called for him to abandon the plan to extend pre-charge detention for terrorist suspects to 42 days. In office, Mr Clarke had pushed for a 90-day detention limit but he wrote in Progress magazine that it was best to drop the idea in this parliament.