Gordon Brown is under mounting pressure to overhaul the government's flagship tax credits after figures released yesterday showed that nearly half of all awards were overpaid in 2003-04.

MPs and charities say families still face hardship as nearly 2m are being forced to pay back an average of £1,000, money awarded under the Treasury scheme to curb child poverty and to encourage more people into low-paid jobs. The chancellor has used tax credits as a way of redistributing money to poor families.