Jeremy Corbyn has challenged George Osborne to come to the House of Commons and explain how he will "reconfigure" his Budget in the wake of Iain Duncan Smith's dramatic resignation over welfare cuts.
The Labour leader suggested the Chancellor should be "considering his position" as ministers prepared formally to ditch cuts to benefits for the disabled set out in his statement last Wednesday.
It is understood that new Work and Pensions Secretary Stephen Crabb will tell MPs in a statement that the curbs to the Personal Independence Payment (PIP) have been abandoned.
And Prime Minister David Cameron is expected to mount a defence of his Government's record when he appears in the Commons to report back from last week's EU migration summit amid headlines talking of "civil war" in the Conservative Party.
Mr Corbyn said Mr Osborne should scrap cuts in corporation tax and capital gains tax announced in the Budget in order to fill a £4 billion gap left by the PIP climbdown.
The Labour leader told BBC1's Breakfast that the reversal of the Government's welfare plan amounted to "the biggest U-turn for a very long time".
He said: "The Budget doesn't add up. The Chancellor of the Exchequer should come back to Parliament and explain that.
"Far from just Iain Duncan Smith resigning, if a Chancellor puts forward a Budget - as he did - knowing full well that he is making this huge hit on the disabled, then really it should perhaps be him who should be considering his position.
"His Budget simply doesn't add up and it unravelled within hours of him presenting it. This isn't the first time a George Osborne Budget has unravelled.
"It seems to me we need to look at the very heart of this Government, at its incompetence, at the way it puts forward proposals that simply don't add up and expects the most needy in our society to take the hit for them."
Communities Secretary Greg Clark confirmed the Government is going to "take a step back and review this".
He told Good Morning Britain: "Clearly a lot of people feel that it needs to be looked at more closely before it's implemented."
Mr Clark said Mr Duncan Smith "was a good friend, he is a good friend, and always will be a good friend", but added that he had hoped he would continue his work as Work and Pensions Secretary.
Questioned further on the crisis within the party, he told the programme: "Well, I don't think it should be civil war at all because actually Iain and the Prime Minister and the Chancellor have worked very successfully together over the years, for example, to get more people into work than ever before."
Mr Clark said there is no point in "scrapping with each other" when there is an "important job" to do.