Rebels in Britain's ruling Labour party threatened on Tuesday to inflict a damaging parliamentary defeat on Prime Minister Gordon Brown, further undermining his sagging authority.

Brown, struggling in opinion polls, faces a revolt from members of his own party over changes to income tax that are expected to leave some five million of Britain's poorest households - Labour's traditional support base - worse off.

"A large number of people - the people we have always stood up for and fought for - are feeling let down," Ian Gibson, one Labour politician worried about the tax change, told the BBC.

Senior party figures warn in-fighting over the tax changes and plans to alter terror detention laws are fuelling discontent among voters and this could hurt Labour in local council elections next week.

The May 1 elections will be closely watched as an indicator of what could happen in a general election with Brown, who succeeded Tony Blair in June, at the helm for the first time.

Brown, who served as finance minister for 10 years under Blair, has seen his reputation for sound economic management dented by the credit crisis and slower growth. Critics accuse him of indecisiveness. Failure to quell the party rebellion and a poor poll showing next week would fuel speculation about whether he is the right man for the job.

Labour parliamentarian Frank Field has signed up 39 rebel lawmakers to an amendment which would compensate those worst hit by the abolition of the lowest 10 pence tax rate, enough backing to force Brown into an unwanted compromise.

GOVERNMENT TRIES TO REASSURE

Labour, more than half way through its third consecutive term in office, has a working majority in parliament of 67.

Field may be able to force through the tax compromise if opposition parties support the amendment.

Defeat on the tax issue could trigger a confidence vote, potentially threatening to bring down Brown's government, but dissident Labour lawmakers would be likely to rally round Brown in that case.

Finance minister Alistair Darling told a meeting of around 50 worried Labour lawmakers on Tuesday that he would find a way of addressing their concerns in time for his pre-budget report, expected in October.

Any solution would apply to the current financial year, a Treasury source said, a key demand of the Labour dissidents.

The pledge was enough to convince some Labour lawmakers at the meeting. Ronnie Campbell told Sky News he had changed his mind about voting against the government.

"I've got that commitment this afternoon from Alistair Darling that he will make it up to people who have lost out and that is good enough for me," he said.

Commentators said Brown would face repeated battles with dissident Labour lawmakers over the coming months as his party continues to lag the opposition Conservatives in opinion polls.

One glimmer of light for Brown came on Tuesday in an opinion poll in the Guardian newspaper that showed Labour clawing back some ground from the Conservatives compared with a month ago.

The ICM poll put Labour support up five points to 34 percent with David Cameron's Conservatives down three points to 39 percent. The third main party, the Liberal Democrats were down two points on 19 percent.