Under the concessions to rebels, up to 120 of whom had threatened to vote against cuts, people who currently receive personal independence payments, or the health element of universal credit, will continue to do so with cuts only affecting future claimants.

Shadow work and pensions secretary Helen Whately described the u-turn as ‘humiliating'.

Posting on X, Whately said: ‘We offered to help the Government make bigger and better welfare savings to get more people off benefits and into work. But Starmer ducked the challenge - leaving taxpayers to pick up the bill.'

Green Party MP, Sian Berry, posted on X: ‘Political pressure means a reprieve for some who were set to be cruelly harmed, but this is way too small a concession to accept. Greens demand the full withdrawal of cuts to PIP and any changes only through working with disabled people to get it right.'

Labour MP Dame Meg Hillier, who led opposition to disability benefit changes, said she would now support the Government's welfare Bill as ‘it is a good step forward'.

Unison assistant general secretary Jon Richards said: ‘It's encouraging the Government has listened and responded to concerns raised by Unison in public and behind the scenes.

‘Disabled workers will be paying close attention to what ministers say next week. They need assurances the support that enables them to work is not taken away.'

The IFS said the new package would cost the Government £3bn relative to their previous plans.

Tom Waters, an associate director at IFS, said: ‘These changes more than halve the saving of the package of reforms as a whole, making the chancellor's already difficult Budget balancing act that much harder. The decision is to protect existing health-related benefit claimants from the reforms, thereby making the savings entirely from new claimants to these benefits. This will create big differences – thousands of pounds a year, for many years in some cases – between similar people with similar health conditions who happen to have applied at a slightly different time.'

Sam Atwell, policy and research manager, Healthy Lives team at The Health Foundation, said: ‘This move will help avoid further harm to the health of the 370,000 people previously expected to lose support and ease some of the anxiety being felt across the wider community of those claiming PIP.

‘However, the proposed changes are still expected to leave around 430,000 people who potentially could have claimed PIP under the current rules financially worse off by the end of this Parliament. The Government will need to ensure this group will get the support they need to manage both their health and the additional costs of disability.'

‘It is reasonable for the Government to consider the long-term sustainability of health-related benefits. But any credible strategy must prioritise enabling disabled people to stay healthy and remain in work for longer at its core. That means action on the building blocks of health, including access to decent housing, reliable transport and good local jobs and training. It also requires early, targeted support when people are at risk of falling out of work due to ill health, such as access to trained caseworkers and support for employers to take a more proactive approach to workforce health.'