Angela Rayner has acknowledged that Labour MPs feel “disheartened and bruised” after the chaotic welfare vote. The Deputy Prime Minister insisted that “we must learn from this and we will”.

Ms Rayner, who is also Housing Secretary, was speaking at the weekly meeting of Labour MPs on Monday. She sat next to Chancellor Rachel Reeves, who broke down in tears at Prime Minister's Questions last Wednesday in what was a nightmare week for the Government.

It comes after Sir Keir Starmer was forced to make his latest U-turn on welfare cuts last Tuesday, facing a huge rebellion by Labour backbenchers.

The £5billion predicted savings from benefit reforms were whittled away by the Government's changes to plans to avoid the Prime Minister's first Commons defeat.

Labour, which has dropped behind Nigel Farage's Reform UK in national opinion polls, is now facing renewed speculation over its tax plans after concessions to the party's welfare rebels left a black hole in the Chancellor's spending plans.

Sir Keir still faced a revolt of almost 50 MPs regardless of the climbdown.

The fallout threatens to cause lasting damage to morale in Labour ranks, with some backbench MPs calling for a reset in relations between the parliamentary party and the leadership before fractures widen.

Images of the Chancellor crying in the Commons on Wednesday spooked the financial markets and led to questions about her future.

However, a Treasury spokesman said the tears were the result of a personal matter and Downing Street said she would remain in post.

In another headache for the Prime Minister, former Labour leader Jeremy Corbyn is set to launch a new Left-wing party.