IAIN Duncan Smith has dramatically resigned from government, saying he could not continue to defend Chancellor George Osborne’s plans to cut disability benefits while giving tax breaks to the rich.

The unexpected resignation yesterday evening caught the government off guard. Senior officials briefed media claiming the former Work and Pensions Secretary had been involved in every decision made about the changes to Personal Independence Payments (PIP).

In an brutal letter to the Prime Minister, Duncan Smith called the cuts he was being asked to make a “compromise too far”.

He wrote: “You are aware that I believe that the latest changes to benefits for the disabled and the context in which they’ve been made are, a compromise too far. While they are defensible in narrow terms, given the continuing deficit, they are not defensible in the way they were placed within a Budget that benefits higher earning taxpayers. They should have instead been part of a wider process to engage others in finding the best way to better focus resources on those most in need.

“I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather in the national economic interest. Too often my team and I have been pressured in the immediate run-up to a Budget or fiscal event to deliver yet more reductions to the working-age benefit bill. There has been too much emphasis on money saving exercises and not enough awareness from the Treasury, in particular, that the government’s vision of a new welfare-to-work system could not be repeatedly salami-sliced.”

Duncan Smith and the Prime Minister had found themselves at odds recently over the European Union referendum campaign.

Neither has held back from attacking the other. It would likely have been difficult for the two men to sit in Cabinet together after the June 23 vote.

In his Budget on Wednesday Osborne confirmed changes to the way the state calculates PIP, money provided to the disabled and the long-term sick to help them with the costs of their illness.

Estimates suggest around 640,000 disabled people would be worse off because of the changes.

Independent economic think tank, the Institute for Fiscal Studies, said the changes will see £4.4 billion cut from the bill and leave 370,000 people an average of £3,500 a year worse off. The government had faced a backbench rebellion over the changes.

There was a ferocious sign-off in Duncan Smith’s resignation letter: “I hope as the government goes forward you can look again, however, at the balance of cuts you have insisted upon and wonder if enough has been done to ensure ‘we are all in this together’.”

First Minister Nicola Sturgeon tweeted: “Wow. When even IDS thinks it’s a cruel cut too far, it is definitely time for a fundamental rethink”

She then said that Cameron “must now reverse the #PIP cuts immediately. If even IDS won’t justify them, it’s time to admit how wrong they are.”

Tory MP Peter Bone said he was not surprised by the resignation, saying the Work and Pensions Secretary was a man of principle.

Labour’s Owen Smith said: “If the Tories are now postponing or cancelling these cruel cuts altogether it is a humiliating climbdown for George Osborne, although it will come as an incredibly welcome reprieve for hundreds of thousands of disabled people who were due to be affected.

“Everything about these cuts is shameful. There is no moral, political or economic case for targeting disabled people in this manner.”