Prime Minister David Cameron is on a collision course with Iain Duncan Smith after he ruled out cutting child benefits as part of slashing £12bn from benefits.

Work and Pensions Secretary Duncan Smith had proposed cutting child benefit from parents with more than two children. However, on 1 June, Number 10 made it clear that Cameron would keep child benefits as they are for the length of the current parliament, until May 2020.

The Times reported that Chancellor of the Exchequer George Osborne would probably not be able to announce in his Budget on July 8 the full £12bn of welfare cuts the Tories had promised.

"Some of the welfare cuts are likely to be announced in the autumn rather than the Budget," a Whitehall source told the paper.

However, A DWP source said: "That's the first I've heard of that suggestion."

During the election campaign, Cameron told ITV News that child benefit, in its current form, would be kept for the next five years – although it would be frozen for the next two years.

And on 1 June, Number 10 reiterated the point. "The PM's view on this is that, as he said during the election campaign, we keep child benefit. We don't cut child benefit," a spokesperson said.

An ally of Duncan Smith told the Sunday Times: "Iain is not going to do this in a cheese-paring kind of way. This will be about achieving behaviour change.

"With two children, you send a message where people have to think: can I afford another child? If you are on benefits and know the state will support you for the next child and the next, you are not facing the same decisions."