Marriage tax cut shelved as Cameron faces revolt

• David Cameron faces revolt from Tory backbenchers as marriage tax proposals set not to feature in Budget

• Some backbenchers have suggested ‘quid pro quo’ deal for marriage tax inclusion in exchange for support on gay marriage

• Development arrives as speculation of unrest against PM and Chancellor George Osborne surfaces

The Conservative manifesto pledge, included in the coalition agreement, is not expected to be introduced until later in the term that ends in 2015.

It was expected that one member of a married couple or civil partnership would be allowed to transfer £750 of their tax-free personal allowance to their partner, reducing their tax bill by around £150 a year for basic-rate taxpayers.

Some Tory MPs had called for the measure to be included in Chancellor George Osborne’s March Budget in return for backing plans to introduce same-sex marriage south of the Border.

However, government sources flatly rejected the idea of a “quid pro quo”, and ruled out a marriage tax break in this Budget. They said: “It won’t be in the Budget but it will be in this parliament.”

The developments came amid fevered speculation over plots against Cameron, with suggestions that rebels have set a deadline of summer next year for the party’s electoral fortunes to turn around.

Cameron views the introduction of same-sex marriage – expected to split his MPs when put to a Commons vote this week – as the “Conservative party delivering the promise it made”.

“This is a difficult issue for some in the Conservative party and he understands the strong feelings that people have, and of course it’s a free vote,” sources said. “He is proud that it’s a coalition government with strong Conservative participation that is bringing forward a modern and progressive change.”

The sources also made clear Osborne had the “full confidence” of the Prime Minister.

Some MPs are said to be circulating a letter demanding Osborne is replaced as the economy continues to falter.

However, the sources said: “He is an extremely successful Chancellor battling very difficult economic circumstances.

“Osborne will be Chancellor at the next general election.”

It is understood Cameron feels he has “very strong support from colleagues in parliament”. But Tory MP David Burrowes said: “There’s serious unrest in the grassroots. You cannot avoid the fact that the troops are unhappy. People are drifting away.”

Meanwhile, a campaign group opposed to same-sex marriage north of the Border has stepped up its protest against the Scottish Government’s proposed legislation.

Scotland for Marriage has delivered almost 250,000 leaflets and said more than 36,000 people have now signed its petition.

The government launched a consultation on its draft legislation to legalise same-sex marriage in December.

A Scotland for Marriage spokesman said: “The extent of national opposition to redefining marriage is becoming apparent. Ordinary men and women do not want to see the destruction of the concept in law of mother and father and changing the time-honoured essence of the family.”

The Equality Network claimed the Marriage and Civil Partnership (Scotland) Bill would increase rather than reduce religious freedom by allowing religious groups to choose whether or not to conduct same-sex marriages.