Alistair Darling will try today to rescue Labour’s business reputation with a £200 million climbdown on capital gains tax designed to help owners of small companies.

Three months after announcing in his first Pre-Budget Report a new flat rate of capital gains tax at 18 per cent, the Chancellor will rewrite his own rules before they have even come into effect.

In the face of enormous pressure from the business community, Mr Darling will halve that rate on at least the first £750,000 of gains made between the buying and selling of assets.

The Chancellor’s “entrepreneur’s relief” will appease some but not all of the organisations that have been clamouring for change since he announced the shake-up in October.

The plan received a huge thumbs down after claims that it has been hurriedly thrown together without consultation and was one of the main factors in a miserable autumn for Gordon Brown.

Yesterday the Prime Minister appointed a new “fixer” as he made Jeremy Heywood the first Downing Street permanent secretary, the most senior official to run No 10. In Mr Heywood and Stephen Carter, who became his chief of strategy this month, Mr Brown has chosen two men whom he hopes can stop the run of setbacks that have hit him since he decided not to go for an early election.

Mr Darling came up with the original changes, which would have eventually raised nearly £1 billion for the Treasury, as he sought to counter the Conservatives’ surprise autumn pledge to raise the inheritance tax threshold to £1 million.

In response to that coup at the Tory conference, Mr Darling announced his own new inheritance tax threshold of £700,000 for couples from 2010. To help to pay for that, he unveiled the new capital gains rules.

Although the Treasury refused to give details last night of Mr Darling’s retreat, it is thought that he will go close to adopting a plan put forward by the Federation of Small Businesses for a 9 per cent rate on the first £750,000 of gains. It means that a company owner making a gain on a sale of £750,000 will now pay tax of £67,500 rather than £135,000 as proposed last October. The change will come into effect on April 1, as would the original plans. The concession means Mr Darling will have to find some £200 million from elsewhere to help to pay for his inheritance tax plans.

Everyone selling a business will get the relief but the overwhelming beneficiaries will be those who own smaller companies. It will particularly benefit small businessmen who were planning on retiring soon and feared that they might have to rush to sell up before April 1 to avoid paying a higher tax rate.

But the Government has decided against limiting the relief only to those who are retiring because it wants to encourage people to hand their businesses on to their families or sell before they necessarily reach retirement age.

Stephen Alambritis, of the Federation of Small Businesses, said: “This move will help business owners coming up to retirement and will encourage serial entrepreneurs to stay in the UK.”

Yesterday’s changes at the heart of Government were moves by Mr Brown to strengthen his grip over both Downing Street and the Treasury. Aides have insisted that Mr Heywood, 46, as the first permanent secretary at No 10, will do the same job as Mr Brown’s outgoing chief of staff, Tom Scholar. Hehas moved to another newly created post at the Treasury, shoring up No 11 in the face of the coming economic storms.

Mr Brown’s spokesman said that Mr Scholar’s new job as managing director, international and finance, at the Treasury had been prompted by the “pressing” need to address the “uncertainty in the financial markets”.

George Osborne, the Shadow Chancellor, said that the appointment of Mr Scholar showed that Mr Brown had lost faith in Mr Darling. “Why should the country have confidence in Alistair Darling when the Prime Minister himself clearly does not?”