Getty ImagesCabinet ministers have written to the Treasury complaining about planned department cuts ahead of this month’s budget and spending review.
Whitehall sources say the government faces a £40 billion gap in funding for public services, which must be filled through tax increases.
The Cabinet is quite uneasy about the spending cuts that will be needed to meet the Treasury’s proposed spending limits.
A deal was supposed to be reached on Wednesday night as the final key measures in the budget were sent to the Office for Budget Responsibility, the official forecasting agency.
When Chancellor Rachel Reeves makes a statement on October 30, closing the funding gap for public services could lead to the biggest tax rise in the budget for a generation.
Reeves decided to comply with new borrowing rules, which means day-to-day spending must be paid for by tax revenues.
With the government insisting it will stick to its manifesto pledge not to raise taxes on working people, the focus is now on extending national insurance cover to employer pension contributions and increasing some form of capital gains tax.
There is also speculation that fuel taxes could be increased amid falling gas prices.
