Some Scottish Labour MPs want Sir Keir Starmer to step aside amid fears that the party will face a rout in next May’s Holyrood elections.

There are calls for a leadership challenge in the new year to give themselves time to win back voters who have lost faith in the Prime Minister following a series of u-turns and broken promises.

Disenchanted Westminster MPs believe the party’s deteriorating popularity north of the border is becoming untenable and that it faces being badly defeated by the SNP, and losing second place to Reform.

The row engulfing the Chancellor, who is accused of misleading the public over the nation’s finances, is adding to the nervousness among backbenchers.

Ms Reeves today denied the claims and insisted that she mentioned in her pre-budget speech that she needed to increase tax income to build up more “headroom” to cover the government’s pledges. These included cutting NHS waiting lists and reducing energy bills. She said she “had to ask people to contribute more” but was able to freeze income tax thresholds rather than increase the tax rate.

“I’m happy to defend those choices, they were the right thing to do,” she said in a television interview. Nonetheless, the SNP’s Westminster leader has joined the Shadow Chancellor Mel Stride in demanding an investigation by the Financial Conduct Authority.

It follows the Office for Budget Responsibility revealing that it told the Chancellor before the Budget that she had a surplus, rather than the huge deficit that she declared to the public.

On Monday Sir Keir will attempt to shift the debate on to long-term growth plans, praising the budget for providing “economic stability” and claiming that “economic growth is beating the forecasts”.

However, he and the Chancellor clearly have their work cut out convincing backbenchers that they are sticking to the manifesto pledges and have a plan for growth. With the Scottish elections should six months away there is little sign of the party clawing back support lost since the general election.

One Scottish Labour MP told The Times: “The situation is untenable. The question for those of us with elections next May is ‘is there time for a change’, or do we wait to be slaughtered? My preference is before May.”

Another said: “We have everything to gain and little to lose by getting rid of Keir. With elections round the corner, we should be in contention for first place in the polls. Instead we’re at risk of finishing in a far behind second, or staying stuck in third place.”

Lifting the two-child benefit cap has removed a key policy attack from Labour’s opponents but could also play into the SNP’s hands.

That’s because it has freed up £155 million which had been earmarked in the Scottish government’s budget for a similar step north of the border. The SNP can now allocate this money to pre-election giveaways in the the Scottish budget in January.

Scottish Labour leader Anas Sarwar may have played a part in the change of benefits policy and in demanding more money for Scotland, but he failed to convince the PM and Chancellor to scrap the energy profits levy which is costing thousands of jobs in the oil and gas industry and a loss of confidence among investors.

To force a challenge to Starmer, 80 MPs must gather behind a single challenger. There are 37 Scottish Labour MPs, including a cabinet minister, junior ministers, government aides and backbenchers. A contest could take months, potentially jeopardising the party’s chances further.

Starmer allies point to Labour’s win in the Holyrood by-election in Hamilton, Larkhall & Stonehouse in June, defying predictions of defeat.