Left-wing MPs warned of re-launching their potentially devastating rebellion unless the Treasury clarified compensation to be paid to millions of low-paid workers and pensioners.

They wanted to know how much of the cash will be “backdated” to April this year. The latest Labour infighting shattered Mr Brown’s hopes that his humiliating U-turn on Wednesday had brought peace.

 Tory leader David Cameron said: “Even when it comes to making a U-turn, this Government is incompetent.” 

Chancellor Alistair Darling and Treasury Chief Secretary Yvette Cooper fuelled confusion by refusing to use the word “backdated”.

Dot Gibson of the National Pensioners’ Convention said: “This whole episode has severely damaged the Government’s standing with older people.”

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