'All his fault': David Cameron blamed George Osborne for disability benefits row, Cabinet source claims

There has been speculation that the Chancellor could be forced to resign

David Cameron has reportedly told a Cabinet colleague in private that the Chancellor was entirely to blame for the devastating row over cuts to disability benefits.

As the Conservatives were engulfed by a bitter civil war following Iain Duncan Smith’s resignation from the Cabinet, The Times cited a Cabinet source as saying the Prime Minister had turned on George Osborne, his long-standing political ally.

However Downing Street denied the report and insisted Mr Cameron and Mr Osborne were as close as ever.

There has been speculation that the Chancellor could be forced to resign and that the Government’s Finance Bill could be defeated in the Commons this week.

The Cabinet source told the Times, which did not say whether the source was pro-Brexit or not, that Mr Osborne’s reputation would suffer over the issue.

“Cameron said in no uncertain terms that Osborne had messed up -- it was all his fault -- and would have hell to pay in the papers,” the insider said.

However a senior Downing Street official rejected the idea that Mr Cameron believed Mr Osborne was to blame.

“The prime minister does not believe the chancellor was responsible for what happened. They are working as closely as they ever have done,” the official said.

Conservative sources also told The Daily Telegraph that Mr Cameron and Mr Osborne’s “unbreakable united front is coming under pressure for the first time”.

Downing Street was said to have become “frustrated” by Mr Osborne’s failure to “vociferously” support the Prime Minister and the campaign to remain in the EU.

Iain Duncan Smith's resignation - How it happened

“There is a feeling that it’s been a bit too much about George's leadership recently - rather than what the Government is doing,” one source said.

Mr Osborne, meanwhile, is said to blame Mr Cameron for calling the EU referendum in the first place, which the pro-EU Chancellor regarded as merely an attempt at “party management” that had resulted in the current deep divisions within the party.