Chancellor warned of Tory backlash after pledging £10bn more to IMF

The Chancellor said that the increased funding was vital to protect jobs and growth in this country.

But Conservative Peter Bone said the move was “bonkers” and warned that the money would be wasted trying to prop up the eurozone.

Finance ministers and central bank governors struck the deal at a meeting in Washington yesterday.

Alongside the UK’s increase, Australia will contribute an extra US$7 billion, Singapore $4bn, and South Korea $15bn.

Mr Osborne said: “The UK sees itself as part of the solution to the challenges facing the global economy, not part of problem. We are helping to solve the global debt problem, rather than adding to it.

“Jobs and growth in Britain depend on a stable world economy. That needs a strong IMF.

“And because we have taken strong action to rescue our own economy, we can be one of many countries that can support the IMF, instead of being bailed out by the IMF.”

The United States and Canada are not thought to be contributing any extra funding under the agreement.

Parliament has previously approved around £40bn in support for the IMF, of which about £30bn has already been committed.

If the increase had gone beyond the £10bn “headroom” still available to Mr Osborne it would have required a fresh vote by MPs.

Committing money does not mean it will necessarily be drawn against and, because it would be given in the form of a loan, it would not deplete public spending budgets.

Mr Bone said: “It is £10bn of money that he is spending without telling parliament in advance he was going to do it.

“It seems to me it is all about bailing out the eurozone. It should not be up to British taxpayers to shore up a doomed project that is for the benefit of our European colleagues.”

He added: “People will not understand how we can have all these cuts, but put £10bn at risk for other countries. It is bonkers.”

Tory MP Mark Pritchard, the secretary of the 1922 Committee, said Mr Osborne appeared to have “got away with the politics” of the issue by avoiding a fresh vote. He warned that the UK should not be underwriting a currency that “clearly is not working”.

“Indirectly that is exactly what British taxpayers’ money and IMF funding is going to do,” he added.

He also pointed to wider disaffection on the Conservative back-benches.

“The government is suffering from strategic drift,” Mr Pritchard said.

“I don’t think it permanent, I don’t think it is terminal … but I think the government does have to listen more to back-benchers who listen to their constituents.”

Shadow chancellor Ed Balls accused Mr Osborne of “running scared” of parliamentary scrutiny. He said: “It is disappointing that the Chancellor has not taken the opportunity to press the wealthy eurozone countries to dig into their own pockets and establish a strong firewall of their own, before offering up more funding from Britain.”