Corbyn facing Labour rebellion over economic policy vote

Jeremy Corbyn is facing the biggest test of his leadership following a dramatic U-turn on the Government's fiscal policy.

It is unclear if a number of his MPs will obey the party whips in a crunch Commons vote on the Government's updated Charter of Budget Responsibility later.

Following a stormy meeting of the Parliamentary Labour Party (PLP), MPs angrily complained that their economic policy was in disarray and the party and had "no credible leadership".

Shadow chancellor John McDonnell said the party would vote for the charter, which he dismissed as a "stunt" and a "trap" by Chancellor George Osborne designed to enable the Conservatives to paint Labour as "deficit deniers".

Shadow Chancellor John McDonnell stunned MPs by announcing his U-turn on the vote on Monday. Credit: PA

But on Monday he stunned MPs by saying they should now vote against the charter, which requires governments to run budget surpluses in "normal times" when the economy is in good shape.

McDonnell defended his U-turn as little more than a change of "parliamentary tactics" - and said that he would spell out his thinking in more detail in the debate on the floor of the House.

However, the meeting was branded a "total f****** shambles" by former cabinet minister Ben Bradshaw.While other MPs indicated that they could withhold their support from the leadership in the Commons division.