David Cameron and Iain Duncan Smith
David Cameron said he was puzzled and disappointed by Iain Duncan Smith's decision to resign

David Cameron has said he is "puzzled and disappointed" by Iain Duncan Smith's decision to quit his cabinet post as work and pensions secretary. In a scathing resignation letter Duncan Smith said planned cuts to disability benefits announced in this week's Budget were "not defensible" as George Osborne's financial plans benefits higher earning tax payers.

But the prime minister said the Cabinet had "collectively agreed" to the proposals about changes to disability benefits announced by Chancellor George Osborne on 16 March.

Sparking outcry from opposition parties and some Tory MPs, the Budget included plans to alter Personal Independence Payments (PIP), which will replace Disability Living Allowance (DLA) in January 2017, to cut £4.4bn from the government's benefits bill.

Calling the changes "a compromise too far" Duncan Smith, dubbed "the quiet man" before his ousting as Conservative leader in 2003, said they were "defensible in narrow terms, given the continuing deficit", but "they are not defensible in the way they were placed within a Budget that benefits higher earning taxpayers".

PIP claimant: Cuts to disability benefits are 'breaking human rights laws'IBTimes UK

Cuts on hold

His announcement after six years in the job, came hours after government sources signalled that they were going to kick the proposals "into the long grass" in the face of a rebellion by Tory backbenchers, many of whom wrote to the chancellor, claiming the measures would cost the Conservative Party the next election.

Opponents had claimed the cuts, which were expected to save £1.3bn a year, could affect up to 640,000 people, with many losing as much as £100 a week.

In his response Cameron said they had "all agreed that the increased resources being spent on disabled people should be properly managed and focused on those who need it most.

"That is why we collectively agreed – you, No 10 and the Treasury – proposals which you and your department then announced a week ago," he said. "Today we agreed not to proceed with the policies in their current form and instead to work together to get these policies right over the coming months."

He added: "In the light of this, I am puzzled and disappointed that you have chosen to resign."

Acknowledging that the pair were "on different sides in the vital debate about the future of Britain's relations with Europe", with Duncan Smith a vocal proponent of the UK leaving the EU, Cameron said the government would "continue with its policy of welfare reform".

"You leave the government with my thanks and best wishes," said Cameron.

Duncan Smith's replacement is expected to be announced on Saturday, 19 March.