One senior UK Government source said: “We see him as the weakest link because he is at the heart of the Cameron machine, one of the four central figures, but his judgment is appalling, he is a bandwagon jumper and his image does not play well with the public.”

While the 38-year-old Shadow Chancellor is regarded by many Labour insiders as “out of his depth”, the party machine is wary of making the attacks too personal and focusing on his privileged upbringing – he is the millionaire scion of the Osborne & Little wallpaper dynasty – including his time at Oxford University.

Instead, the line of attack will focus on Mr Osborne’s competence or, as Labour see it, his lack of competence.

Loading article content

“His judgment is very, very poor,” said the source. “His reaction to the recession was completely wrong. He comes across as wallowing in and relishing the prospect of cuts, which our focus groups tell us does not play well with the public.

“On a wider point, he simply does not come across as a Chancellor of the Exchequer. This is the second most important job in the country. He is far too excitable, he buckles under pressure and shows terrible judgment.”

Last year, he came unstuck when he leaked details of a private holiday conversation with Lord Mandelson, who, he claimed, had “dripped poison” about Gordon Brown but was forced to deny claims he had tried to solicit a £50,000 donation for the Tories from Russian billionaire Oleg Deripaska.

Shortly after, Labour issued a dossier, accusing him of “schoolboy errors” in his spending plans and extended to him the Prime Minister’s attack at the Labour Party conference against the Tory leader by insisting it was “no time for a novice”.

In November, the Cheshire MP was accused of talking the pound down after he said it could collapse because of the scale of government borrowing. Senior politicians normally observe the convention to avoid warning about sterling crises for fear it becomes self-fulfilling.