Nick Clegg has launched a furious assault on "Chinese-style" welfare reforms being floated by the Tories.

The Liberal Democrat Deputy Prime Minister condemned the idea of "penalising the young" by limiting benefits to the first two children.

The intervention came after Conservative Work and Pensions Secretary Iain Duncan Smith backed proposals for a fresh crackdown on welfare.

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Mr Duncan Smith told a Sunday newspaper he would like EU immigrants to have to wait up to two years to claim benefits - rather than the three-month period introduced on January 1.

The Work and Pensions Secretary said Germany, Italy and the Netherlands were supportive of the move.

Sources close to the Cabinet minister stressed that he was expressing an aspiration for the future, not spelling out a policy.

London Mayor Boris Johnson mooted a similar move last week, but Downing Street insisted it would need treaty change and could not be done immediately.

Mr Duncan Smith said limiting child benefit to two children was "brilliant", and rethinking housing benefit for under-25s could encourage people to take jobs.

On the BBC's Andrew Marr Show, Mr Clegg yesterday insisted he was "no slouch" on reforming benefits.

He backed further immigrant welfare restrictions, and would "look at" other proposals from the Tories.

But he added: "I am not in favour of penalising the young. I am not in favour of a sort of Chinese-style family policy saying that the state says it is okay to have two children, it is not okay to have three children."