The British government has abandoned plans to cut income tax for top earners, part of a package of tax cuts that caused turmoil in financial markets last week.

Finance Minister Kwasi Kwarteng announced this morning that he will not eliminate the upper 45% income tax bracket, paid on incomes over 150,000 pounds (171,000 euros at the current exchange rate) per year.

These taxpayers would move into the 40% bracket.

"We understand and we listen," said Kwarteng quoted by Lusa, acknowledging that the abolition of the top bracket "has become a distraction from the primary mission of addressing the challenges affecting the country."

The retreat comes in the face of a growing number of Conservative Party MPs opposed to the measure announced just 10 days ago in a "mini-budget" on September 23, which threatened a lead in parliament.

A few hours earlier, the Conservatives had released excerpts of a speech Kwarteng was due to deliver this afternoon at the party's annual conference, saying, "We must stay the course. I am confident that our plan is the right plan."

The Prime Minister, Liz Truss, had also defended the measures on Sunday, although acknowledging that she could have "done a better job of preparing" for the announcements.

Truss took office less than a month ago, promising to radically reshape the British economy to end years of slow growth.

However, the plan presented on September 23 by the Executive for a stimulus package that includes 45,000 million pounds (51,000 million euros) in tax cuts, paid for through government borrowing, has sunk the pound to an all-time low against the dollar and pushed up interest rates on sovereign debt.

The Bank of England was forced to intervene in the bond market and fears of a sharp rise in interest rates caused banks to suspend selling cheaper mortgage products, causing uncertainty in the housing sector.