ED Miliband will today seek to regain the political initiative on welfare and win economic credibility with voters by insisting that Labour in office would take tough decisions on spending and introduce a cap on Britain's £200 billion annual benefits bill.

But his big announcement that Labour would apply a tough "laser focus" on social security was overshadowed by the leaking of a policy U-turn – that the party would not seek to reverse the Coalition's controversial withdrawal of child benefit from those earning more than £50,000 a year; a policy it once denounced as unfair, ill-thought through and "a shambles".

It is thought Mr Miliband believes a future Labour government, in tough economic times, could simply not afford to give up the £2.3bn which the welfare cut brings in to the Treasury.

The U-turn, however, enabled David Cameron to launch a stinging attack in the Commons.

The Prime Minister told the Labour leader: "The very first time he came to that dispatch box he attacked me for taking child benefit away from higher earners. And yet today we learn it is now Labour's official policy to take child benefit away from higher earners. Total and utter confusion."

Mr Miliband made no mention of the child benefit issue during his six questions at PMQs despite being repeatedly challenged by Mr Cameron to explain his position.

The PM mocked the Labour leader, telling MPs that while he had been the one who had taken a holiday on Ibiza, it was the Opposition who had taken "policy-altering substances".

In his speech earlier this week, Ed Balls insisted Labour would make tough choices in government, talking of "iron discipline".

The Shadow Chancellor said the party would scrap the winter fuel allowance for better off pensioners – sparking fears among leftwingers about Labour's commitment to universal benefits – but he also signalled that it would stick within the Coalition's 2015/16 current spending limits although capital budgets could rise to help the economy.

The moves have led Tories to accuse Labour of "conceding the welfare debate" by now endorsing key parts of the UK Government's approach. The Opposition had previously opposed the Coalition's £26,000 welfare cap across the UK.

Sajid Javid, the Tory Treasury Minister, claimed Labour's economic policy was "crumbling".

Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, accused it of "flip-flopping" while the SNP insisted Labour was "joined at the hip" with the Conservatives on welfare cuts.

In his speech in London's Docklands today, Mr Miliband will say a future Labour government would cap welfare spending and:

l enable councils to build homes and cut housing benefit costs;

l strengthen the route back to work for parents of three and four-year-olds in workless households;

l tackle low pay; and

l restore the principle of contribution so people who paid into the system longer could qualify for an improved rate of Jobseeker's Allowance.

The Labour leader will say: "The next Labour government will have less money to spend. If we are going to turn our economy around, protect our NHS and build a stronger country, we will have to be laser-focused on how we spend every single pound. Social secur-ity spending, vital as it is, cannot be exempt from that discipline.

"So we will reduce the cost of failure in the social security system, including the cost of long-term worklessness and the cost of housing benefit."

Mr Miliband will talk of not only controlling welfare spending but of putting "decent values" at the heart of the benefits system.

The Labour leader will set out a number of measures, currently being considered by the party's policy review, to make work pay.

"It is only by changing our economy that we can keep costs under control and make progress towards a fairer society," he will add.