George Osborne has infuriated Tory MPs by reportedly ruling out tax breaks for married couples in the Budget.

The chancellor has been accused of "kow-towing" to the Liberal Democrats by refusing to include measures.

Recognising marriage in the tax system has long been a demand of Conservative traditionalists. The coalition agreement provides for proposals to be brought forward, although the junior party's MPs are entitled to abstain in any vote on the issue. However, senior Treasury sources have told the Sunday Telegraph that the idea will not feature in next month's crucial financial package.

Stewart Jackson MP, who stepped down from the government last year as a ministerial aide, said deferring the introduction of marriage tax allowances represented a "failure of leadership" by David Cameron.

"I urge George Osborne to reconsider this decision," he told the newspaper. "There is a great deal of evidence that shows marriage has many economic and other benefits to society. Not to introduce this feels like kow-towing to the Liberal Democrats. Our supporters say they want this and they put us where we are. We need to deliver what they want."

Philip Davies, the Conservative MP for Shipley, told the Telegraph: "We need tax cuts to help the recovery. A transferable allowance for married couples supports the institution of marriage, making it even more laudable. The Government should be doing more to cut public spending and cut taxes. Half of the cost of marriage tax allowances could be paid for simply by cutting aid to India."

Mr Cameron has repeatedly spoken of his support for recognising marriage in the tax system, as has Work and Pensions Secretary Iain Duncan Smith. Before the general election the Tories proposed a transferable tax allowance that could have been worth £150 a year to married couples and civil partnerships.

Last year Lib Dem Deputy Prime Minister Nick Clegg used a keynote speech to mock Conservative support for a married couples' tax allowance. "We shouldn't take a particular version of the family institution, such as the 1950s model, and try and preserve it in aspic," he said.

Budget negotiations between the coalition partners have been intensifying as the Budget approaches.

Mr Clegg has urged for faster process towards increasing the personal tax allowance to £10,000, while Treasury Chief Secretary Danny Alexander has called for higher-rate tax relief on pensions to be scrapped. Meanwhile, the chancellor is coming under pressure from some Tory ministers to axe the 50p top rate of tax - a move opposed by the Lib Dems.