George Osborne has signalled an embarrassing retreat over cuts to disabled benefits in the face of a major revolt by Tory MPs.
The Chancellor responded to another wave of criticism over plans to curb Personal Independence Payments (PIP) by insisting the Government would consult charities "to make sure we get this right".
A Government source later indicated that ministers wanted to kick the changes - initially announced by Work and Pensions Secretary Iain Duncan Smith - into the "long grass".
"This is going to be kicked into the long grass. We need to take time and get reforms right, and that will mean looking again at these proposals," the source said.
"It is not an integral part of the Budget - it is a DWP package that came out beforehand."
The source said the Government was not "wedded" to figures in the Budget that suggested the shake-up of assessment criteria would shave around £1.3 billion a year off the PIP bill.
"We are not wedded to specific sums - it is about making sure that what will be an increasing amount of money goes to those who need it most," they added.
Answering questions at the conclusion of a European Council summit in Brussels earlier, Mr Cameron said that welfare payments to disabled people had increased by £4 billion in real terms during his time in office.
The PM said: "We will always protect the most vulnerable people in our country and make sure they get the help they need.
"We are going to discuss what we've put forward with the disability charities and others, as the Chancellor said today, and make sure that we get this right. It's important."
Mr Osborne has come under intense pressure from Tory backbenchers and Labour over the planned cut, with critics claiming it is unfair to press ahead with the move at the same time as reducing taxes for the wealthy and businesses.
Opposition leader Jeremy Corbyn said 200,000 of the 640,000 people hit by the changes would lose out altogether as a result of the Government's plans.
He told BBC Radio 5 Live: "It is utterly appalling what they are proposing. We will be forcing a vote in Parliament on this. I hope and believe all opposition parties will join with us in that.
"I believe a number of Conservative MPs are so upset about this they too will vote against the Government."
Conservative backbencher Andrew Percy, who has organised a letter to the Chancellor calling for a U-turn, warned that the Government - which has a working majority of just 17 - faces defeat in the Commons if it tried to push through the changes.
Backbencher William Wragg became the latest Conservative to register his concern about the plan, putting his name to Mr Percy's letter and saying the "PIP changes need a rethink".