Emergency one-off payments to low-paid workers who lost out from the abolition of the 10p tax rate are about to be announced by Alistair Darling, The Times has learnt.

The Chancellor is rushing forward an announcement on how he intends eventually to compensate those who have lost out.

He will tell MPs that the scheme will take some time to work out and to identify all the losers — people in the £12,000 to £18,000 salary range.

But he and Gordon Brown have decided to announce short-term help for those known to have lost out after accepting that the issue has caused massive damage to Labour and the Prime Minister’s reputation.

Details of the short-term plan were not known last night but the announcement could come this afternoon.

The move emerged after Mr Brown’s closest ally, Ed Balls, warned that Labour had to act swiftly to restore its reputation as the defender of family finances after the “mistake” over the abolition of the 10p rate.

Labour rebels have given warning that the Government could be defeated on the Finance Bill unless it comes forward with a satisfactory package.

Ministers have already assured the other main group to have lost out — women pensioners aged between 60 and 64 — that they will be helped through winter fuel payments.

Ministers accept that the move is unlikely to be enough to turn the tide in the Crewe by-election, where the Tories have been installed as runaway favourites. But they believe that swift and substantial action is needed to give Labour any chance of recovery.

Mr Balls told an education briefing: “The reality is we have got behind the curve on the issue of family finances and we need to reestablish that pretty quickly. The 10p tax issue is the most important thing to sort out.”

He also accused Frank Field of acting dishonourably.

Mr Field, the former welfare minister who spearheaded the 10p tax revolt by backbenchers, had predicted in a BBC World Service interview, repeated on the Today programme yesterday morning, that Mr Brown would not lead Labour into the next election.

He said that Mr Brown was “tragically” unhappy in his job. “I would be very surprised if he’s still the leader of the Labour Party [in two years time] and therefore leading us into the election campaign,” he said.

Mr Balls said that Mr Brown and Mr Darling had been right to engage with Mr Field over the 10p rate

He said: “I think people could look at what he was saying a few weeks ago and believe at that time that his intentions were honourable. As for what he said this morning I think I leave you to draw your own conclusions.

“I think it is very unlikely on the basis of what I have seen that Frank Field will support any proposals that are brought forward by Government on the 10p tax.”

Mr Balls, the Schools Secretary, was speaking at a briefing called before the final stages in the Commons of the Bill that raises the age for leaving education and training to 18.

He said that if the credit crunch’s impact on families had been anticipated different decisions would have been taken. His implied criticism of the Pre-Budget Report may ruffle feathers at the Treasury.

His intervention shows frustration within the Brown camp.

Asked about Mr Field’s advice that Mr Brown should consult his close family and friends about his future, Mr Balls said: “I’d be surprised if the Prime Minister will be taking Frank Field’s advice generally.

“We have all known Frank for many years, and I think he used to work on his own when he was in opposition. He used to work on his own on the back benches. I think he used to work on his own when he was a minister as well.”

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