Keir Starmer is to defy growing anger by driving through welfare cuts for some of the UK’s most severely disabled people, with an overhaul that could see more than 600,000 benefit claimants lose out on an average of £675 a month.

Ministers are set to ditch plans to freeze personal independent payments (Pip) amid a backlash. But they will still tighten eligibility criteria for the benefit under big changes to be set out by the work and pensions secretary, Liz Kendall, on Tuesday.

The Resolution Foundation thinktank warned that cutting Pip by £5bn in 2029-30 by raising the qualifying threshold for support could mean about 620,000 people lose £675 a month on average. It said 70% of these cuts would be concentrated on those families in the poorest half of the income distribution.

The sweep of the cuts has greatly alarmed disability rights campaigners as well as Labour MPs, who have been lobbying No 10 this week to change course. But plans to freeze increases in Pip payments are now unlikely – a measure that would have required a parliamentary vote.

Cabinet ministers are among those who have raised doubts about the scale of the cuts and private fears about how No 10 has handled the messaging.

There is also widespread concern among MPs about reported plans to cut – or potentially freeze – the top rate of benefits for disabled people who are unable to work, though that may be mitigated by a rise in universal credit for those seeking or in work.

Ministers are motivated to equalise the incomes of people seeking work with people unable work, aiming to address what it perceives as an incentive to be permanently signed-off sick, which can result in an income twice as high as those of jobseekers.

But MPs who spoke to the Guardian said it appeared “perverse” to target those who were not in work, likely to include the most severely disabled and vulnerable in society within its scope.

The bulk of the expected £5bn to £6bn in cuts will come from making it tougher to qualify for Pip – a key disability benefit not linked to work – which is likely to deny payments to many with conditions such as autism.

Despite the widespread backlash, scope for further change is now unlikely. The green paper outlining the measures will be released on Tuesday and the Treasury has now submitted its final “major measures” to the Office for Budget Responsibility – including the welfare reforms – to allow the budget watchdog to score the measures in its report before the government’s spring statement at the end of March.

The Resolution Foundation said it predicted the chancellor, Rachel Reeves, was now on course for a budget deficit of about £4.4bn due to weaker growth, interest rates and lower tax revenues, having previously estimated £9.9bn in headroom in 2029-30.

The thinktank’s research director, James Smith, said the jobs market was in “recession territory”, which would hinder the government’s hopes of getting more disabled people into work or taking on more hours.

“Crucially, she should avoid turning the spring statement into a ‘sticking plaster’ budget, with long-term thinking on welfare reform undermined by the quest for short-term savings that could cause real harm,” Smith said.

Kendall is to set out a plan with a number of mitigations that she hopes will assuage the fears of disabled claimants and Labour MPs. The work and pensions secretary will promise a “right to try” guarantee for those currently on benefits to take on work but return to previous benefits if the job does not work out, without having to go through a gruelling reassessment process.

She will also retain £1bn of the planned savings to reinvest in back-to-work schemes, which Kendall has promised will be locally tailored and include an overhaul of jobcentre help and support.

One Labour MP said they were approaching the days ahead with “absolute horror” and expected it to be “the worst week of the parliament”. Another said they had been contacted by constituents in despair at what might be coming. “We all get the case for reform, but we can also see that some of these cuts don’t actually seem to be targeted at the areas most in need of reform.”

A number of MPs have stressed to Downing Street this week that they can under no circumstances back the changes in a parliamentary vote, with some Labour constituencies having up to one in five people receiving Pip.

Senior Labour figures who have raised alarm at the plans have pointed the finger at the chancellor, claiming she was boxed in by fiscal rules meaning she could not raise taxes to combat the worsening economic climate.

Treasury sources denied that Reeves was the one pushing the welfare department to go further and that the main shape of the changes has been sketched out over the past year, since before Labour came to power.

Kendall will outline plans for the changes on Tuesday, but it will be Reeves who will lay out the extent of the planned savings and mitigations in the spring statement on 26 March.

Speaking on Sunday, the health secretary, Wes Streeting, said the changes would ensure the welfare state was “a springboard back to work and lots of people get written off if they can’t contribute when they can and should and want to”.

But he refused to be drawn on the details of the changes, saying those who were concerned should wait to see the specifics. “You’ve seen the briefing, you’ve seen the speculation. I think the moral of the story is wait for the plans,” he said.