Labour rebels are understood to have been offered concessions by the Government on its controversial welfare reforms, with an announcement expected shortly.
Number 10 had been locked in crisis talks with backbenchers after some 126 MPs within the party signed an amendment that would halt the legislation in its tracks.
On Thursday night, sources said a deal was being thrashed out between leading rebels and the Government as it seeks to head off the prospect of Sir Keir Starmer’s first Commons defeat in a crunch vote next week.
The Universal Credit and Personal Independence Payment Bill has its second reading on Tuesday, the first opportunity for MPs to support or reject it.
If the legislation clears its first hurdle, it will then face a few hours’ examination by all MPs the following week – rather than days or weeks in front of a committee tasked with looking at the Bill.
The Government’s original package restricted eligibility for the personal independence payment (Pip), the main disability payment in England, and limited the sickness-related element of universal credit.
Existing claimants were to be given a 13-week phase-out period of financial support in an earlier move that was seen as a bid to head off opposition by aiming to soften the impact of the changes.
However, concessions offered by the Government to save the Bill from defeat are understood to include a commitment that those currently receiving Pip will continue to get the allowance.
This would protect some 370,000 existing claimants who were expected to lose out following reassessment.
Ministers had hoped the reforms would get more people back into work and save up to £5 billion a year, but fresh changes such as these would leave Chancellor Rachel Reeves needing to find more money elsewhere.
Rebels had also been calling for the Government to row back on a freeze in the health element of universal credit, which was expected to lead to a £450 real decline in support for some 2.2 million existing claimants.
The Government had earlier said it was listening to suggestions to improve the legislation amid concerns about the swift timetable of the Bill.
The so-called “reasoned amendment” led by Treasury select committee chairwoman Dame Meg Hillier had argued that disabled people have not been properly consulted and further scrutiny of the changes is needed.
Speaking in the Commons earlier, Sir Keir told MPs he wanted the reforms to demonstrate “Labour values of fairness” and that discussions about the changes would continue over the coming days.
He said there was “consensus across the House on the urgent need for reform” of the “broken” welfare system.
“I know colleagues across the House are eager to start fixing that, and so am I, and that all colleagues want to get this right, and so do I,” he said.
“We want to see reform implemented with Labour values of fairness.
“That conversation will continue in the coming days, so we can begin making change together on Tuesday.”
There was mixed reaction among charities to the prospect of concessions. Learning disability charity Mencap said the news would be a “huge relief to thousands of people living in fear of what the future holds”.
“It is the right thing to do and sends a clear message – cutting disability benefits is not a fair way to mend the black hole in the public purse,” director of strategy Jackie O’Sullivan said.
But the MS Society urged rebels to hold firm and block the Bill, insisting any Government offer to water down the reforms would amount to “kicking the can down the road and delaying an inevitable disaster”.
Head of campaigns at the charity, Charlotte Gill, said: “We urge MPs not to be swayed by these last ditch attempts to force through a harmful Bill with supposed concessions.
“The only way to avoid a catastrophe today and in the future is to stop the cuts altogether by halting the Bill in its tracks.”
The Tories described concessions as “the latest in a growing list of screeching U-turns” from the Government.
Shadow chancellor Mel Stride said: “Under pressure from his own MPs Starmer has made another completely unfunded spending commitment.
“Labour’s welfare chaos will cost hardworking taxpayers.
“We can’t afford Labour.”
