Jack Straw today became the first senior Cabinet minister to say sorry for the 10p tax rate fiasco.

In a Radio 5Live phone-in he told one caller who had lost money: "I am sorry that you have been placed in this position and it shouldn't have happened."

And in what will be interpeted as a swipe at the Prime Minister and the Treasury, he said even the "best brains" had failed to see the poor would be hit.

His remarks will be used in the Commons by the Opposition this afternoon as MPs debate the Finance Bill.

"Sometimes even with the best brains available to government there are inadvertent consequences of changes," he told BBC radio.

"We put our hands up to that, we should have known more about the impact of the abolition of the 10p rate."

As Mr Straw was speaking, Mr Brown dismissed claims that Tony Blair did not think he could win the next election. The allegation, made by former Labour fundraiser Lord Levy, has been denied by Mr Blair's spokesman.

Mr Brown said he would not be distracted by "gossip or rumour, or statements made by one or two people".

On the 10p tax, he said: "I acknowledge that there were two issues arising from that Budget that needed more attention."

Mr Straw went further in admitting that mistakes were made over the abolition of the 10p tax band, which nearly precipitated a major backbench Labour revolt.

"Government is not perfect," said the Justice Secretary. "I am sorry that this has happened."

Graham Stringer, Labour MP for Manchester Blackley, said that he still needed reassurances from the Government about whether individuals would get their money back or not.

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