The first purely Conservative Budget for almost 20 years takes more from the poor than the rich, according to a respected economic think tank.

The Institute for Fiscal Studies (IFS) said low-paid workers would also be worse off as a result of the measures with cuts to tax credits and other benefits outweighing salary boosts from the new "national living wage".

George Osborne's Budget also reduced incentives for the unemployed to find a job, Paul Johnson, the IFS director said.

And it was a "tax raising Budget, not quite consistent with the boast that it was aimed at a lower tax country."

No 10 said the Prime Minister did not accept the IFS' judgement the Budget was took more from those on low incomes.

Work and Pensions Secretary Iain Duncan Smith said the IFS analysis had failed to take into account the Budget's childcare package or the prospect of people taking on more work.

But, he added: "Of course people, if you strictly speaking talk about money that they have and they won't have on tax credits, then you are right to say that they will be worse off directly as that.

"But when you start adding some of the other things that we have got, the tax changes and with the childcare for parents, you see that some of them are better off.

"So it's a bit of a balance. We are saving money, so absolutely some people will immediately appear to be worse off, but they are changing their operation, working more hours, the second person in a household taking on more hours, and actually getting better off as a result."

The warning came amid a growing series of rows over Wednesday's Budget.

Gorge Osborne was cheered by Tory MPs when he unveiled the surprise new compulsory "living wage" on Wednesday.

Payable only to over 25s if will effectively raise the current minimum wage from £6.50 an hour to £7 by next April.

Ministers also want the rate to rise to £9 by 2020.

But the IFS said that the move "simply cannot provide full compensation for the majority of losses that will be experience by tax credit recipients - that is just arithmetically impossible".

TUC General Secretary Frances O'Grady condemned the Budget as a "wolf in sheep's clothing" for many ordinary families.

The IFS said that 13 million families across the UK would lose an average of £260 a year as a result of a four-year freeze on working-age benefits.

Overall the new 'living wage' will give workers an extra £4 billion a year, the economists said, but the welfare cuts added up to £12 billion a year.

Despite raises in the threshold at which many workers pay tax, the Treasury's own documents show tax increases totalling £6.5 billion a year by 2020.

Mr Johnson said: "Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget."

He added: "Given the array of benefits, it is not surprising that the changes overall are regressive, taking much more from poorer households than richer ones."

Mr Osborne hailed his Budget claiming that it would pave the way to a "higher-wage, lower-tax, lower-welfare" Britain.

The Conservatives want to cut the number of people on tax credits, a measure introduced by Gordon Brown under the Labour government to help make work pay.

Senior Conservatives believe the system has mushroomed in size far beyond initial expectations.

They also argue that it allows employers, including major High Street names, to pay low wages in the knowledge they will be subsidised by the taxpayer.

The IFS analysis suggested that the poorest 10 per cent of society would lose around £800 a year as a result of tax and benefit changes, almost 7 per cent of their income after tax.

The hardest-hit group is the second poorest, who stand to lose around £1,300 a year.

The wealthiest 10 per cent, however, lose less than £400, while the second-richest actually gain almost £200.

The changes mean that while the Conservatives are in power the poorest third of society will make a larger contribution to cutting the deficit than those at the top.