Work and Pensions Secretary Iain Duncan Smith has stepped down amid growing outrage about cuts to disability payments. The UK government faces a backbench rebellion over the changes, which will affect 640,000 people.
Duncan Smith put the blame for his decision to quit firmly on finance minister George Osborne, who has repeatedly slashed Britain's public sector finances over the past six years to cut the budget deficit.
The UK Treasury recently announced 4.4 billion pounds ($6.36 billion) in savings from disability payments by 2020-21, which would see claimants lose an average of 3,500 pounds per year in welfare, according to the Institute for Fiscal Studies.
In a letter posted online on Friday evening, the outgoing Work and Pensions Secretary said the latest cuts were "a compromise too far."
Hitting out at the Chancellor's "self imposed fiscal restraints," Duncan Smith said they were "not defensible...within a Budget that benefits higher earning taxpayers."
He added that he believed the cuts were "more and more perceived as distinctly political rather than in the national economic interest."
Proposals in disarray
Duncan Smith's resignation is seen as a big blow for British Prime Minister David Cameron's government. Downing Street told British broadcaster "ITV" later on Friday that it was dropping the "current version" of the proposed cuts.
Cameron, on the sidelines of an EU Summit in Brussels, backtracked, saying: "We are going to discuss what we've put forward with the disability charities and others," he said.
Later, in a reply to Duncan Smith, he said he was "puzzled and disappointed" by the resignation.
Osborne revealed the UK's latest budget on Wednesday, which was widely criticized as helping the rich, while offering nothing for the less well off. He cut corporation and capital gains taxes and lifted the earnings threshold at which the higher rate of income tax is payable.
Meanwhile, welfare cuts announced a few days earlier will affect recipients of so-called Personal Independence Payments (PIPs), which are meant to offset the extra cost of living with a long-term health problem. Around 640,000 people will be affected.
Britain's center-right Conservatives have faced a growing revolt from backbench MPs over the controversial cuts, which have been denounced by disabled charities.
The main opposition Labour party called for the changes to be abandoned altogether, adding that Duncan Smith's resignation "reveals a government in disarray and a Chancellor who has lost the credibility to manage the economy."
Welfare or EU?
Some MPs have questioned the timing of Duncan Smith's decision, speculating that his departure is driven more by Britain's EU referendum battle, as he had championed six years of deep cuts to the welfare budget before Friday's announcement.
Duncan Smith is one of several senior Conservatives campaigning to leave the bloc, while Cameron and Osborne want to remain.
British voters will decide whether to stay in the EU, in an in/out referendum on June 23.