Alistair Darling, chancellor, will on Saturday come under mounting pressure from MPs to extend tax breaks to the 5.3m households hit by the abolition of the 10p tax rate, a move which would further stretch public finances.

The Commons treasury committee wants Mr Darling to increase the £2.7bn ($5.4bn) compensation package that has already been agreed for this year and to extend the help to poorer families into future years.