Rural Labour MPs are plotting to oust Rachel Reeves, amid fears the family farm tax will cost them their seats.

Dozens of Labour MPs abstained from a key Budget vote on the farm tax on Tuesday night, defying a three-line whip.

Penrith and Solway MP Markus Campbell-Savours was suspended from the Parliamentary Labour Party tonight after voting against the measure, which he said would ‘devastate’ family farms.

A Labour source told the Daily Mail that 48 MPs have now joined a WhatsApp group on the issue, where they have discussed moves to ‘get Reeves out before Christmas‘.

The source added: ‘There is real anger that she has refused to listen on this. It’s an issue that is causing genuine problems in people’s constituencies and she just doesn’t want to hear it. People are appalled by her arrogance.’

The new threat to the Chancellor came as she faced renewed calls to resign over last week’s Budget.

During angry clashes in the Commons, Kemi Badenoch savaged Ms Reeves over misleading suggestions in the run-up to the Budget that the public finances were in such a dire state she would have no choice but to break Labour’s manifesto and raise income tax.

Richard Hughes, chairman of the Office for Budget Responsibility (OBR) resigned this week just days after revealing that the Chancellor knew she was on course to meet her fiscal rules when she gave an emergency press conference in Downing Street last month to warn about the state of the Government’s books.

The Tory leader said Mr Hughes had been ‘forced out for telling the truth: that the Chancellor did not need to raise taxes on working people’.

She added: ‘We also know that the Chancellor was briefing the media and twisting the facts – all so she could break her promises and raise taxes. If she were a CEO, she would have been fired, and she might even have been prosecuted for market abuse.’

The PM said he was ‘proud’ of the Budget and said Mrs Badenoch was ‘completely losing the plot’.

But Mrs Badenoch stepped up her attack on the Chancellor, saying: ‘No one believes a word that the Prime Minister says. We now know the black hole was fake, her book was fake, her CV was fake, even her chess claims are made up.

‘She doesn’t belong in the Treasury. She belongs in La La Land. They raise taxes on working people, that £16billion was to increase benefits to protect them from their backbenchers.’

Ms Reeves has ordered a belated leak inquiry following warnings from economists and the OBR that a string of briefings from the Treasury in the run-up to the Budget had damaged the economy.

Treasury chief secretary James Murray told MPs: ‘A leak inquiry is now underway, with the full support of the Chancellor and the whole Treasury team.’

The family farm tax was introduced in last year’s Budget and is causing mounting concern among Labour MPs in the countryside. The Treasury made a minor concession in the Budget, but MPs lined up to warn that the changes did not go nearly far enough.

Around 30 Labour MPs abstained on the issue in Tuesday night’s vote.

Mr Campbell-Savours said he could not defend a tax which Labour in opposition had pledged not to impose.

‘They are changes that leave many, not least elderly farmers, yet to make arrangements to transfer assets, devastated at the impact on their family farms,’ he said.

South Derbyshire MP Samantha Niblett said: ‘Most farmers are not wealthy land barons; they live hand to mouth on tiny and sometimes non-existent profit margins. Many were explicitly advised not to hand over their farms to their children, and they now face enormous and unexpected tax bills.

Ms Niblett said the issue was causing ‘a level of distress and strain that cannot be overstated’ for some elderly farmers. She added: ‘We must acknowledge a difficult truth: we have lost the trust of our farmers and they deserve, now more than ever, our utmost respect, our honesty and our unwavering support.’

South West Norfolk MP Terry Jermy said that many family farms ‘return very little profit’, despite having substantial assets – leaving them unable to pay the new charge.

He added: ‘While I accept the economic situation and the appalling legacy of the last Conservative Government, the future of farming in this country depends on this Government’s policy being right.’

Shadow environment secretary Victoria Atkins said: ‘Labour has continued their assault on farmers and family businesses by suspending their only MP who dared to vote against their vindictive Family Farm and Business Taxes.

‘After their Budget for Benefits Street and cementing their death tax, this Government has promised higher taxes, higher unemployment and depleting food security.

‘Only the Conservatives will stand up for our rural and agricultural communities and axe the Family Farm and Business Taxes.’