Downing Street has signalled it's cooling off the idea of introducing local and regional pay for civil servants and other public sector workers, in an acknowledgement that many Lib Dems are fiercely opposed to the idea.
In the Budget George Osborne raised the prospect of local agreements in the public sector to reflect differing pay rates across the country, but under the plans envisaged by the Treasury it became apparent recently that it would mean people in Lib Dem seats in places like Cornwall losing out.
Ministers have been drawing up plans to split the country into "zones" where pay would be varied depending on private sector wages and the cost of living. Ministers had been keen to stress that these zones wouldn't split the country up into distinct regions, but would lead to a more patchy map.
The plans are thought to mirror an arrangement that's been in place for HM Courts staff since 2007, which sees places like Manchester and Portsmouth lumped together in the same zone.
Danny Alexander Softened His Enthusiasm For Regional Pay, And Clegg Threatened To Veto
Although the Treasury has been tight-lipped about whether the policy would ever see the light of day, evidence has been mounting that ministers have come under huge pressure from Lib Dem backbenchers to scrap the plan. A letter published in the Guardian signed by more than a dozen Lib Dem MPs last month fired a warning shot, and letters from the Lib Dem chief secretary to the Treasury Danny Alexander, sent to the Welsh Assembly government, suggested he had cooled his enthusiasm for local pay earlier this year.
On Monday morning a Downing Street spokeswoman said: "Unless there is strong evidence and a good case for it, things won't change."
A Lib Dem source was quoted as telling The Independent: "It would play into all the claims our opponents make about the coalition."
Last week the Conservatives' only MP in the North East, Guy Opperman, the MP for Hexham, came out against the idea, saying there was no "economic argument" for local pay and that it could lead to pay cuts in the region.
Tories on the right of the party have long argued that national payscales in the public sector keep wages artificially high in some parts of Britain, particularly the north of England. They argue that paying a public sector worker in Newcastle the same as their counterpart in Kent is suppressing job creation in the private sector, because people would rather take a better-paid job funded by the taxpayer.
The Treasury is expected to announce the results of its consultation early next month - the mood music coming from Downing Street suggests the Lib Dems will most likely claim another win, if the whole idea is ditched.