Christian Aid has called upon the Chancellor to re-think his proposal to cap the tax relief on charitable donations.

Martin Birch, Finance Director at Christian Aid, said the proposal was “misguided”.

George Osborne announced in his Budget last month that there would be a £50,000 cap on tax relief from 2013, or 25 per cent of income if that was higher.

The change has been proposed as the Government seeks to clamp down on tax avoidance.

However, charities have hit out at the proposal, warning that it will lead to a drop in donations.

In a survey of 120 charity senior executives by the Charities Aid Foundation, 88% said they believed that the move would have a “negative impact on the value of donations” from major donors.

Fifty-six per cent said they believed donations would fall by 20 per cent.

Mr Birch called upon the Government to “urgently” reconsider the proposal.

He said: “In a speech in December, the Prime Minister singled out the work of charities, saying that when it came to the great humanitarian crises, it was faith-based organisations who were at the forefront of the action to save lives.

“We are only able to take this action because of the generous donations made to us by individuals up and down the country, including major philanthropists.

“Those donations are borne not of a desire to avoid tax, but of the values and morals of our supporters.

“[Mr Cameron] has the opportunity now to defend those philanthropists against the Chancellor’s misguided proposal to cap the tax relief on charitable donations.

“We ask the Government urgently to reconsider this proposal so that it tackles any potential abuse, but protects the life-saving philanthropy Mr Cameron has rightly praised in the past.”