Nick Clegg is under pressure from within his own party to resist welfare cuts in George Osborne's Autumn Statement amid reports the chancellor may choose to not raise benefits in line with inflation.
The Social Liberal Forum (SLF), an internal Lib Dem pressure group on the left of the party, has said it could not support a government that took "regressive" spending decisions on the welfare budget and is lobbying the deputy prime minister hard in advance of Wednesday's statement.
"With living standards already squeezed and with the considerable uncertainty associated with the introduction of the Universal Credit – a measure that needs to succeed and will inevitably have consequences that will require adjustment – it would be irresponsible for further such steps to be taken," it said.
Prateek Buch, the director of the SLF, told HuffPost UK that now was not the time to be making further cuts to benefits as "the economy is not providing people with the means to secure a decent standard of living".
He said the SLF was keeping Lib Dem ministers "aware of feelings in the party" in an attempt to win the "battle" against benefit cuts with just two days to go until the statement.
And he said there were "pretty positive" signs that the Lib Dems had fought "reasonably effectively" during the Autumn Statement negotiations.
The party is reported to have blocked Tory plans to cut housing benefit for under-25s as well as objecting to a freeze in benefit payments.
Speaking on Sy News Lib Dem president Tim Farron admitted there was "pressure" not to increase benefits as much as many in the party would like. But insisted the Tories would not be happy with the compromise either.
"There won't be any kind of a cut and that's something I think some Conservative may find disappointing," he said.
However an alliance of more than 50 charities, academics and unions has joined the SLF in arguing against failing to increase benefits inline with inflation.
In a letter to The Independent the group said: "It would be a tragedy for millions, and a travesty for the economy, to push the poorest into deeper poverty by this week failing to uprate benefits in line with inflation, or by making other cuts to social security for families and disabled people."
Meanwhile Lib Dem hopes for a mansion tax, a flagship policy aimed at raising more money from the wealthy, appear to be dead.
Speaking on the BBC's Andrew Marr programme on Sunday, George Osborne said: "There’s not going to be a mansion tax. We made that clear."
Lib Dem deputy leader Simon Hughes told HuffPost UK during the party conference in September that it would be "unacceptable" to ask people on the lowest incomes to take more of a hit.
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