The South Holland and the Deepings MP has warned that, despite Gordon Brown's climbdown on the issue, no guarantee has been given that all 5.3million low paid workers who have lost out will be compensated.

The abolition of the lowest rate of income tax came into effect last month alongside a reduction in the basic rate of income tax from 22p to 20p and increases in child benefit and tax credits.

The 10p tax was to be used for the first £2,230 of income. Abolishing it means the average person is paying 20 per cent – an extra £223 tax – on that slice of income.

Following an outcry the Government has said it will outline a compensation package for pensioners aged 60 to 64 and low earners without children before this autumn's pre-budget report.

Mr Hayes said: "Scrapping of the 10p tax band was ill-judged from the outset and ministers knew it would slash the incomes of Britain's lowest paid workers.

"Gordon Brown's last budget as chancellor and Alistair Darling's March budget are to blame.

"They both repeated time after time that they would not re-open the budget, but now, at last, after being forced to admit that 5.3million people will lose out, they have.

"Despite this admission, the Prime Minister could still not guarantee that the 5.3million who started paying more in tax from April 6 will actually be compensated.

"The fact is key tax changes from the last two budgets have been abandoned. As the Government continues to lose control of the economy it has become increasingly clear that they have lost control of the public purse too."