Rishi Sunak is planning to extend furlough and other business support until the end of June.
The vital lifelines for many workers had been due to expire on April 30 leaving them facing a bleak couple of months.
The Chancellor is now expected to announce in next week’s Budget that he will extend the job support scheme.
Boris Johnson had promised the Government would “not pull the rug out” but gave no details of his plans despite calls for certainty.
Business minister Paul Scully appeared to confirm yesterday that economic support would continue for now.
He told MPs: “Given the current climate, it is right that we focus on supporting individuals and businesses through the pandemic.
“In the past, the Government has ensured that businesses and people had that certainty by extending furlough and business grants.
“The announcements at the Budget will... ensure the next phase of our economic support package continues to deliver tailored support.”
But Labour ’s Bridget Phillipson warned the Chancellor’s “economically illiterate” plans risk “crushing” Britain’s pandemic recovery under a “mountain of debt”.
The shadow Treasury minister said some firms face having to start paying back Covid loans before lockdown restrictions are fully lifted, putting them at risk of going bust.
The Opposition also wants more “breathing space” for firms with a six month extension of business rate relief and a temporary extension of the 5% reduced VAT rate.
It comes amid reports that the PM blocked moves by Mr Sunak to lift the 10-year freeze on fuel duty.
