Labour will accept some of the Chancellor's radical welfare cuts, Harriet Harman said, as the Government was forced to defend itself from expert claims George Osborne's overall package hit the poorest more than the rich.
Acting Labour leader Ms Harman said her party had to acknowledge that it lost the election because voters did not trust it "on the economy and on benefits".
She said the party would accept the overall household benefits cap and George Osborne's decision to limit support through tax credits and universal credits to two children.
Her comments came as Business Secretary Sajid Javid rejected the assessment of the independent Institute for Fiscal Studies (IFS) that the Budget was regressive because it hit the poorest households more than wealthier ones.
Mr Javid accepted that in "any budget there will be some losers, there'll be some winners" but insisted it was a "fair, well balanced" package.
The Labour position outlined by Ms Harman is an attempt to regain the trust of voters on the crucial issue of financial responsibility.
She told BBC1's Sunday Politics: "I think we won't oppose the Welfare Bill. We won't oppose the household benefit cap. I mean, for example, what they brought forward in relation to restricting benefits and tax credits for people ... with three or more children.
"I mean, what we've got to do is listen to what people around the country said to us and recognise that we didn't get elected, again, and this wasn't a blip, this was the second time we haven't got elected, and actually what people don't want us to do is they don't want us to do blanket opposition, they want us to actually be specific about what we are going to be challenging and holding the Government to account on, but more than that, they want us to listen to their concerns and we've got to recognise why it was that the Tories are in government and not us.
"Which is not because people love the Tories particularly, but because they didn't trust us on the economy and on benefits."
Explaining her stance on the future child tax credit limit set out in the Budget, she said that during the election campaign she talked to parents who would say they would love to have another child, "but we just can't afford it".
"They're working hard and they feel that it's unfair on other people, that they can have bigger families that they would love to have if they were in the position to do that. Now we have to listen to that."
Ms Harman said Labour would oppose some of the changes to tax credits, which would hit low-paid workers despite the announcement of the new national living wage (NLW).
"Obviously we welcome the increase in what they're now calling the National Living Wage, but pointing out that there will be three million families who are working hard who are actually going to be £1,000 worse off. So we will oppose that.
"We will oppose too the abolition of the child poverty targets, but actually we're not going to do blanket opposition because we've heard all around the country that whilst people have got concerns, particularly about the standard of living for low income families in work, they don't want blanket opposition to what the Government are proposing on welfare."
The respected IFS found the poor will lose out more than the rich from the Budget and cast doubt on Mr Osborne's claim that it would pave the way to a "higher-wage, lower-tax, lower-welfare" Britain.
While welfare payments will indeed be cut to the tune of £12 billion, the Chancellor's package would in fact increase taxes by £6.5 billion a year by 2020 and it was a "gamble" to rely on the new mandatory NLW to increase incomes, the IFS found.
The think tank found that the average low-paid worker on tax credits would "unequivocally" lose more from benefit cuts announced by the Chancellor than they would gain from the introduction of the NLW, which will be worth £7.20 an hour to workers aged 25 or more - rising to £9 by 2020 - compared to £6.50 on the current national minimum wage.
Mr Javid dismissed the assessment - but appeared to blunder over the value of the flagship NLW, claiming it would be £7.50 an hour.
He told BBC1's Andrew Marr Show: "This is a Budget, like the others since 2010, where we've made sure it's the richest in society that make the biggest contribution.
"One of the numbers published, for example, in this Budget were that the richest 1% are going to pay 27% of total income tax. I think that's fairness. So it is a fair, well-balanced Budget which ensures that the economic recovery continues, and that's what working people want to see."
He added: "This is not a regressive budget. This is a budget when, taken together, it will ensure that the richest make the biggest contribution to the consolidation."