Alistair Darling, the Social Security Secretary, and Stephen Byers, Chief Secretary to the Treasury, have agreed that the allowances, one of the first products of the welfare state, are outdated and should be phased out.
The plan, the first clear demonstration of ministers' determination to force through radical benefit changes, would cut around pounds 1.2bn a year from the soaring welfare bill.
However, it is certain to put the Government on a collision course with Labour left-wingers who will see it as another attack on some of the most vulnerable members of society.
Ministers are aware of the political minefield and hope to head off an embarrassing row by allowing existing claimants to continue receiving the benefits.
However, sources at the DSS and Treasury say the favoured option is to scrap future payments of the allowances, which are available only to women and not to men. The reform is likely to be included in a welfare bill which will be a central part of this autumn's Queen's Speech.
"Ministers are convinced that these benefits should be abolished," one insider said, "as a leftover which was relevant in the 1940s and 1950s but has no reason to exist now". The generous benefits, started in 1948 when most women were dependent on their husbands, have been widely criticised as out of touch with the modern egalitarian world.
The Government is facing a legal challenge in Europe from Kevin Willis, a widower who claims he is being discriminated against on gender grounds because he is not eligible.
Mr Darling identified reform as a priority target when he took over from Harriet Harman earlier this year. Women whose husbands die are paid a tax-free lump sum of pounds 1,000 by the state. Widows over the age of 45 also receive a special pension, worth up to pounds 64.70 a week, plus up to pounds 11.30 for each dependent child.
The benefits are not available to widowers, even if they were supported by their wife when she was alive. They also help poor widows least because the benefits are deducted from means-tested payments from the state. Ministers are convinced such a system is not only obsolete but will be overturned by the European Court of Human Rights. The Social Security Secretary considered extending the allowances to men, but decided this option, which would cost around pounds 1bn a year, is too expensive.
Instead, ministers believe the simplest solution is to scrap the payments and support needy widows and widowers through other means-tested benefits. Although no final decision has yet officially been made and the announcement of the stark cut could eventually be sugared with a small compromise for widows, DSS sources stressed that "the status quo is not an option".
Welfare organisations agreed the payments should be reformed. But Maeve Shylock of the National Council for One Parent Families urged the Government not to scrap them alto- gether. "I would rather see them extend benefit to widowers than remove it for everybody."
Iain Duncan Smith, shadow social security spokesman, condemned the proposal as a "huge mistake". "This is another example of the Government doing the wrong thing in the search for short-term money."
t Blairite think tank Demos will also call this week for the national retirement age to be scrapped and for the basic state pension to be phased out leaving people responsible for their own long term care.
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