NICK CLEGG, the leader of the Liberal Democrats and the deputy prime minister, faces a revolt by his MPs and peers after apparently caving in to a series of Conservative demands including scrapping the 50p tax rate.
Not only is George Osborne, the chancellor, set to confirm the cuts for higher earners but he has failed to endorse a Lib Dems plan for a "mansion tax" on expensive properties.
Now a series of influential party members have broken ranks to criticise Clegg in the runup to the budget on Wednesday.
John Pugh, the Lib Dem MP for Southport, threatened to vote against the budget because of the coalition’s backing for regional public sector pay.
He hinted others may follow and that the action would “cement coalition divisions” .
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He told The Observer that he was furious with the party’s leadership for abandoning rank-and-file members.
"Many of us are wholly unconvinced that there is a credible economic case for this measure. Furthermore, the ground troops facing elections in May can only wonder at what the generals are doing."
Meanwhile Lord Oakeshott, a former Treasury spokesman, delivered a fresh attack after last week criticising Clegg’s plans for a "tycoon tax".
He said nothing but a mansion tax would help the less well off.
"Taxing the super-rich is like hammering nails into a jelly – the only bit that can't wobble offshore is their luxury property.
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"That is why our Lib Dem mansion tax really works on the seriously wealthy, including Tory tycoon donors, unlike a tycoon tax which leaves non-doms' and non-residents' wealth offshore and off the hook.
Chris Leslie, a shadow Treasury minister for Labour, said the measures were more evidence that the Lib Dems were increasingly having to concede ground to the Conservatives.
He said: "It looks like Nick Clegg has once again rolled over and allowed the Tories to get their way. He seems to have dropped his demand for a mansion tax and is going along with a tax cut for the richest earners.
"All the Lib Dems seem to be championing in return is a clampdown on tax avoidance, which should be happening anyway. An increase in the personal allowance will not be enough to make up for the hit to middle and low-income families from the VAT rise and huge cuts to working tax credits Nick Clegg has happily supported."