Ed Miliband has attacked George Osborne for linking the case of child killer Mick Philpott to reforming the benefits system, as some Labour MPs expressed fears the party is seen as too soft on welfare cheats.
Speaking at a campaign event in Ipswich on Monday, the Labour leader said the chancellor was guilty of "nasty" and "divisive" politics.
Miliband is reported to have accused to coalition of wanting "to exploit the deaths of six children to try and make a political point" and for making "a political decision to divide this country" in reaction to the Philpott case.
Last night Osborne insisted he did not "set out to be divisive"after he said the government should not be "subsidising lifestyles" of people like Philpott, the jobless man who was jailed for killing six of his children.
In an interview with John Pienaar on BBC Radio 5 Live, Osborne claimed many of his views were "in tune with what the great majority of the country think and experience in their everyday lives".
Miliband's comments come after days of bitter clashes as a raft of major coalition tax and welfare reforms took effect, including a below inflation 1% cap on working-age benefits and tax credit rises for three years.
Around 660,000 social housing tenants deemed to have a spare room will lose an average £14 a week in what critics have dubbed a "bedroom tax", and trials are due to begin in four London boroughs of a £500-a-week cap on household benefits.
In a dig at Osborne's criticism of people on benefits for still being asleep while other people get up early to go to their jobs, Miliband said the reality was it was the chancellor who was out of touch with voters.
"The real wealth of Britain comes from the forgotten wealth creators," he said. "Those who get to the office or the factory when George Osborne’s curtains are still closed and come back home after he has closed them again for the night."
However some Labour MPs have expressed fears the party risks being seen to be on the side of benefit 'scroungers' by appearing to oppose welfare reform.
On Sunday Labour’s deputy leader, Harriet Harman, admitted some taxpayers felt “resentful” about claimants who did not try to find a job.
And writing in The Sun on Monday, Simon Danczuk, Labour MP for Rochdale challenged the left of his party to accept "there are plenty of people capable of working in Rochdale that have been parked on benefits for years".
"The word on the street in my constituency is way ahead of Westminster — and the Left of my party," he said.
"There is nothing to be proud of watching people’s potential waste away, trapped on a life of benefits. The Left has to accept there are some people on the dole that don’t want to work, and we need to have a plan to get them into work."