UK finance minister fights back in bitter budget row

(LONDON) - Britain's finance minister came out fighting Tuesday after welfare cuts in last week's budget prompted the resignation of a top minister and unleashed vicious fighting in the Conservative Party before June's EU referendum.

A combative George Osborne refused to apologise as he addressed the House of Commons for the first time since Iain Duncan Smith, the former work and pensions secretary, quit on Friday, leading to the ruling party's worst bout of feuding for years.

While Duncan Smith resigned in protest at cuts to welfare payments to disabled people, the subsequent rows have highlighted the bitter atmosphere in Prime Minister David Cameron's party, which was already struggling for unity ahead of the June 23 referendum.

Osborne is Cameron's closest ally and his hopes of succeeding him as leader have been badly damaged by Duncan Smith's resignation.

He was forced to drop a planned GBP 4.4 billion (5.5 billion euros, $6.2 billion) in cuts to a disability allowance as Duncan Smith quit two days after the budget.

Following the U-turn, lawmakers in the lower house of parliament approved the budget by 310 votes to 275, clearing the bill over its first hurdle.

But the vote followed days of rancorous debate.

Welfare cuts have been a key plank of Osborne's efforts to reduce Britain's deficit through austerity measures over the last six years and it was not immediately clear how the gap in the figures would be plugged.

Facing roars of criticism from opposition MPs and support from his own side as he addressed a crowded parliamentary chamber on Tuesday, Osborne confirmed there were no plans to cut welfare further in the current parliament.

But in a robust defence of his position, he added: "It is a classic socialist illusion to think you can solve all of society's problems with taxes on the very richest."

His address drew a furious response from John McDonnell, finance spokesman for the left-wing Labour party, who called it the "grubby, incompetent manipulation of a political chancer" and urged Osborne to quit.

The resignation of Duncan Smith, who is campaigning against Cameron for Britain to leave the EU, led to public arguments between ministers in Cameron's government on Saturday and Sunday.

Some charged that he had quit because he wanted to undermine the prime minister over Europe.

Others leapt to his defence, accusing Cameron and Osborne of a high-handed approach to government and not consulting ministers and eurosceptics in their party on policy decisions.