Labour and the Liberal Democrats have described David Cameron's pledge to end inheritance tax on properties worth up to £1 million as 'a panic move' and a sign of 'desperation' from the Conservatives.

The plan revives the party's previous pledge from 2010 which the Liberal Democrats halted while in coalition.

However, the new "family home allowance" would be held back from more valuable estates, meaning the richest in society would not take advantage.

Labour said it was effectively a tax cut of £140,000 to people owning £2 million homes at a time when working people are shelling out more in proportion.

avid Cameron has moved to seize the initiative election battle, with a promise to end inheritance tax on properties worth up to £1 million.

The Conservatives found themselves under pressure to say how they would pay for another key commitment to raise spending on the NHS in England by £8 billion a year by the end of the next parliament.

Chancellor George Osborne said the plans were was part of the Conservatives' "balanced" plan for the economy.

"We have a track record in this parliament where we found almost £8 billion extra in real terms for the National Health Service in very, very difficult economic circumstances so we have proved our mettle, we have proved our ability to stand behind the National Health Service in this parliament. We can do it in the next," he said.

Labour shadow treasury chief secretary Chris Leslie said the interview was further evidence of a "floundering and chaotic" Tory campaign.

"Eighteen times he was asked where the money will come from for his panicky pre-election promises and 18 times he could not explain. Nobody will believe a word of these empty promises when the Tories can't say how they will be paid for," he said.

With the opinion polls showing the two main parties still level pegging, the Conservatives were hoping that Mr Cameron's announcement on inheritance tax would deliver the breakthrough they have been looking for.

In Cheltenham, the Prime Minister said that they were responding to the "most basic, human and natural instinct there is" for parents to be able to pass something on to their children.

"You want to know that even after you're gone, when you're not on the phone and not physically there - you can still provide for them."

The Tories estimate that 22,000 families could benefit by 2020 from the proposed £175,000 allowance offered to parents to enable them to pass property on to children tax-free after their death.

The £1 billion scheme - to come into effect in April 2017 and available to married couples or civil partners - would be funded by a raid on pension tax reliefs for people earning over £150,000.

The family home allowance will be transferable on the death of one spouse and added to the existing £325,000 transferable allowance to bring the tax-free total up to £1 million.

But on properties worth more than £2 million, the allowance would be gradually tapered away until it was worth nothing to those with homes worth more than £2.35 million.

Mr Cameron said that unless the government acted in the next parliament increasing numbers of families would find themselves caught in the inheritance tax net.

However he sidestepped a question as to whether he would "protect" the commitment in the event that he had to form a new coalition after polling day on May 7.

"Yes, it's right that we as a nation have inheritance tax. Yes, it's right that the wealthiest pay that tax. But no - it was never meant for people who spent their working lives as teachers or nurses or running small businesses," he said.

For Labour, Mr Leslie said: "At a time when our NHS is in crisis and most working people are paying more under the Tories, it cannot be a priority to spend £1 billion on a policy which the Treasury says would not apply to 90% of estates."

Lib Dem leader Nick Clegg said that his party also opposed a change which benefited only a "tiny number of families" across the country.

"I think it shows politically they are a party in panic because I think it's dawning on them - something I think which dawned on the country some time ago - that they're not going to win," he said.

"It's astonishing - the Conservative Party has more money than they know what to do with it."

Meanwhile, the Institute for Fiscal Studies (IFS) said ell-off families will benefit "disproportionately" from the Conservatives' promised cut in inheritance tax

It said that the "vast majority" of estates - more than 90% - were not liable to inheritance tax and therefore would not gain from the proposed changes.