Foreign Secretary Philip Hammond has been forced to play down claims that Work and Pensions Secretary Iain Duncan Smith is on the brink of resignation in a bitter row over spending cuts.

Mr Duncan Smith is reportedly involved in a bruising battle with Chancellor George Osborne over plans to take £2 billion from the welfare budget to mitigate the effect of his cuts to tax credits following the Government's House of Lords defeat.

Sources close to the Work and Pensions Secretary have briefed newspapers that he is ready to walk out of the Government if he is forced to compromise on his universal credit reforms in the spending review later this month.

Asked on BBC1's The Andrew Marr Show if he was expecting Mr Duncan Smith to resign, Mr Hammond replied: "I don't think so".

He added: "We all have robust discussions with the Chancellor. That's the nature of the way government works.

"Of course people fight their corner and of course people seek to sway the agenda in one way or another.

"But I think every single one of my Cabinet colleagues would agree that the number one task in front of us is eliminating the deficit and getting Britain's economy on an even keel for the future."

However there was support for Mr Duncan Smith's tough stance from former environment secretary and fellow Eurosceptic Owen Paterson.

Mr Paterson said: "It is completely unacceptable for the Treasury to try to get out of the tax credits muddle by wrecking the universal credits benefits reforms which have been one of the Government's great successes."