Sunday trading laws will be suspended during the London 2012 Olympics in a bid to cash in on the Games, Chancellor George Osborne is expected to announce in the Budget.

Emergency legislation will be used to lift the six-hour limit on the opening hours for larger stores across the whole of England and Wales on eight weekends covering the Olympics and Paralympics.

Officials hope hundreds of thousands of visitors flooding to the capital for the sporting spectacle will take advantage of late-night shopping in the West End, boosting flagging retail figures.

But the move is bound to meet stiff opposition from church leaders and some Tory backbenchers who have already warned that it was likely to lead to a permanent relaxation.

And Labour accused the Chancellor of a "disgraceful breach of the need for a proper consultation and negotiation with trade unions and other groups".

Under the Sunday Trading Act 1994, large shops over 280 square metres in England and Wales are restricted to six hours' continuous trading between 10am and 6pm on Sundays and cannot open at all on Easter Sunday.

Without a change in the law, that would also mean the three biggest souvenir shops at the Olympic village itself in Stratford, east London, would have been forced to close their doors to spectators.

Details of the plans emerged as Mr Osborne said in the Budget he wanted "to ensure it is the working person who gets most support".

There was also a need for "major reforms to our planning laws" to encourage foreign investment and create jobs, he told The Sun Sunday.

He is due to meet Prime Minister David Cameron, Deputy Prime Minister Nick Clegg and Treasury Chief Secretary Danny Alexander - the so-called "Quad" - to iron out the final details tomorrow.

The Budget "scorecard" has already been presented to the Office for Budget Responsibility so it can calculate the economic impact of the proposed changes in time for the set-piece.

It was widely reported at the weekend that Mr Osborne was set to reduce the 50p top rate of income tax - which senior Liberal Democrats have said they would back in return for other measures to target wealth.

But a poll found most voters were against a tax cut for £150,000-plus salaries - including half of Tory supporters, with Liberal Democrats the most hostile to the change.

And Mr Osborne also came under a barrage of angry criticism from trade unions over plans to push ahead with reductions in public sector salaries in some poorer parts of the country.

The Chancellor is expected to use the Budget to announce he is accelerating moves, first floated in December, to close the gap with wages paid by firms.

He believes the so-called public sector "premium" - which the Treasury puts as high as 18% in some places - is stifling private sector recruitment.

But union leaders described the move, which could affect some pay packets as early as next month, as a "cruel" attack on workers which would spark an exodus and hit services.

And Business Secretary Vince Cable, while endorsing the principle of the policy, urged caution over the possible effects of its implementation on career progression.

Writing in the Sunday Mirror, Mr Balls said: "Even though one million young people are now out of work, all David Cameron and George Osborne seem to be arguing about this weekend is whether they can get away with cutting taxes for those earning over £150,000.

"How can this be the right priority when people on middle and low incomes are being squeezed by higher VAT, cuts to tax credits and soaring petrol prices. What planet are they living on?"

While the Sunday trading relaxation proposal is temporary, the Treasury is expected to closely monitor its effects and a permanent move has not been ruled out if it proves a success.

Suffolk Coastal MP Therese Coffey warned last year that a temporary lifting for the Games was likely to lead to a permanent change and could stop staff enjoying the "once-in-a-lifetime" chance to enjoy a home Games.

She was responding to a Private Member's Bill submitted by party colleague Mark Menzies.

Mr Menzies said he was "absolutely delighted" that the plan was now being taken up by the Chancellor and that it would "send out a very powerful message that Britain is open for business".

The MP for Fylde, whose professional background is in retail, said he had been told an estimated 1,700 extra part-time jobs could be created as a result at the giant new shopping centre near the Olympic park.

He insisted he had "no desire at this stage" to see the looser rules applied beyond August.

It is understood that the move will require primary legislation to be passed by both Houses of Parliament - which would have to be pushed through before the Easter break starts later this month.

But hinting that the legislation could face difficulties, shadow Olympics minister Tessa Jowell said: "Whatever the pragmatic case for a relaxation of Sunday trading regulation during the Olympics, the Government's high handed and arrogant announcement in the Sunday papers has made the Bill they propose significantly harder to achieve in practice,

"The relaxation of Sunday trading rules is of enormous concern to employees in the retail industry who are entitled to have their views listened to before a decision like this is announced at the last minute."

Campaign group Keep Sunday Special (KSS) said the change was "a cover for creeping deregulation" and urged MPs to oppose the legislation.

In a statement on its website, it said: "Research by the National Centre for Social Research has shown that Sunday working has a detrimental impact on fathers' time with their children, especially on playing, reading and teaching.

"KSS has always promoted Sundays as a day for shared activities. No changes to Sunday Trading legislation are needed to enable all Olympic visitors to have a great day out enjoying time with family and friends.

"When did shopping become an Olympic sport? Why are the Olympics deemed to be a special case?"

There was no evidence that extra hours would increase sales, it said, and some public services would have to operate, increasing the cost to the taxpayer.

"It would be shameful indeed if Parliament allowed a change to be pushed through in the context of the Budget, especially as there was consultation on Sunday Trading only last year which showed conclusively that there was no appetite to change the law."