Government plans which could reduce state benefits paid to thousands of blind people have sparked a revolt by Liberal Democrat MPs in the latest sign of tension inside the Coalition over cuts.

The Liberal Democrat rebels are demanding a U-turn after it emerged that many blind or partially-sighted people who currently receive disability living allowance (DLA) of up to £120 a week could lose out when it is replaced by a new personal independence payment (PIP) from next April.

Although Nick Clegg is defending the Government's plans, he is under intense pressure from his MPs to lobby for changes before the new system is implemented. Jo Swinson, his parliamentary aide, has written to Iain Duncan Smith, the Work and Pensions Secretary, urging a rethink after taking up cases on behalf of her constituents. Critics of the shake-up claim that the points system under which DLA claimants will be reassessed is biased against the blind because it puts too much emphasis on tasks such as the ability to walk and not enough on the special needs of those who cannot see.

The Government claims the two million people of working age on the benefit should be reassessed because 71 per cent of claimants remain on it for life. Opponents point out that the condition of blind people is not going to change.

The Liberal Democrat rebels may try to force a Commons vote on the changes but hope to avoid that by persuading Mr Duncan Smith to revise his draft criteria.

Mike Hancock, MP for Portsmouth South, criticised Mr Clegg and David Cameron for bringing forward the proposals. He said: "It is manifestly unfair that blind people should be subjected to this worry so unnecessarily. Even in the worst days of the Thatcher government, we didn't see this sort of thing."

Mr Hancock added: "This shows a complete lack of political nous in the leadership of the Coalition. It is one thing after another. They are coming up with ideas and not looking at the consequences. I did not get elected to punish people who cannot help themselves."

Sir Bob Russell, MP for Colchester, believed the impact on the blind was an "unintended consequence" of the reform and appealed to Mr Duncan Smith to hold urgent talks with charities representing the blind. "The Government needs to look afresh at this," he said.

Jenny Willott, the Liberal Democrats' former welfare spokesman, said the draft criteria did not identify the needs of the blind clearly enough and hoped some revisions would be made.

Steve Winyard, head of campaigns at the Royal National Institute for the Blind (RNIB), said: "RNIB believes theproposed criteria for deciding who qualifies for PIP fail to recognise the daily challenges of living with sight-loss and risk leaving many without the support they need to live independently.

"Everyday tasks which sighted people take for granted cost people with sight-loss extra money – for example paying for assistance with cleaning and ironing. Other blind or partially sighted people may require food-labelling systems to ensure they don't eat out-of-date food. These costs are ongoing."

Last night the Department of Work and Pensions (DWP) insisted that DLA is "an outdated benefit" with £630m of overpayments. It said PIP will be focused on those who need it most.

A spokesman said: "PIP will not be automatically claimed because of a specific condition, but how that condition affects someone's everyday life. The assessment is not yet finalised and we continue to work with disability organisations. We are considering their views as we decide what further improvements are needed."

Mr Clegg said: "I support reform because many people have received DLA for year upon year without any assessment about whether their circumstances have changed.

"[The test] needs to be objective and fair and rigorous so that maybe some people, far from losing it, will actually receive a higher award. But, of course, we need to get the details right."

Case study: 'What he said is a disgrace – it makes me livid'

Siobhan Meade, 28, lives in Gorleston-On-Sea in Norfolk, and has been fully blind for more than 10 years. She is trying to gain employment in the media, and currently receives £280 per month in Disability Living Allowance.

"What Iain Duncan Smith has said is awful – for him to come out with such remarks is a disgrace. He's meant to be supporting people. I understand that the Government needs to save money, but the idea that disabled people are sitting about doing nothing makes me livid. It's so hard to get a job in the first place. I was born with very little sight, and in 1999 I lost the remaining sight that I had.

"I'm a confident person, and I believe you have to be driven to achieve your aspirations. Being blind means it's hard to get around, but even more difficult finding employment. Employers think: "Will it cost me more money?" when in fact there are schemes to support employers of disabled people. I wish they would give us an opportunity to showcase what we can do.