Gordon Brown is facing a major backbench revolt as MPs seek to secure compensation for everyone left worse off by the controversial abolition of the 10p income tax rate.
Former minister Frank Field is spearheading the cross-party bid with the support of 30 fellow Labour MPs as well as the Tories and Liberal Democrats.
He and former Labour whip Greg Pope have tabled an amendment to the Finance Bill, which is coming before the Commons, which would force ministers to agree payments to the worst-off.
The level of Labour support, combined with Opposition backing, raises the prospect of a humiliating defeat for the Government.
If passed, the amendment would force the Treasury to come up with detailed compensation proposals before the Commons would allow it to continue levying any income tax.
Mr Field said: "This is the last chance for Labour MPs before the General Election to deliver justice to the 10p losers."
Gordon Brown did away with the 10p starting rate in his last Budget as Chancellor, in 2007, to fund a 2p cut in the standard rate of tax.
The change meant that anybody earning less than £18,500 a year saw their tax bills increase to fund cuts for those who are paid more.
Faced with a backbench revolt a year later, personal allowances were raised at a cost of £2.7 billion to help low earners who had lost out. But Mr Field said that this benefited all standard rate payers so low-earners had still been disadvantaged by the move.
He claimed that half a million households and 1.3 million taxpayers would be worse off by at least £1 a week in 2011/12 as a result of the changes.
