David Cameron personally vetoed plans for a new property tax after donors threatened to ban Tory party fund-raising events from their mansions.

Super-rich donors warned the Prime Minister that if he taxed their London townhouses and sprawling country estates they would refuse to host dinners to boost the Conservative Party's coffers.

A senior insider revealed: "The message went out - tax our mansions and you can forget us ever holding another black tie event for you at our homes ever again.

"Cameron could not have funded the party without these events so he had no choice.

"It was all highly embarrassing." The revelation will pump up the pressure on Cameron after the outcry over last week's autumn statement failing to bring in a wealth tax while poorer people were being hit hard with a tough benefits freeze.

George Osborne had been keen on implementing a new high value property tax.

The Chancellor was talked round to the idea by Liberal Democrats, including Business Secretary Vince Cable, who persuaded him it would raise much-needed cash to repay some of the country's massive debt. But the PM intervened after the donors delivered their ultimatum.

He is said to have stopped Osborne going any further with a mansion tax or new council tax banding, hitting homes worth millions.

Lavish Tory fund-raising dinners are regularly held in some of the most spectacular piles in Britain.

But an insider said the message from Tory HQ fund-raising officials was that "almost all" big donors who offered their homes as venues for the party dinners were unhappy.

Lib Dem peer Lord Oakeshott accused Cameron and Osborne of "performing a hand-brake turn on donor orders".

He told the Sunday Mirror: "The Tories are too scared to make their backers pay more than a £26-a-week council tax on their multi-million pound Mayfair mansions.

"That's not fair, it's feeble."