Iain Duncan Smith's resignation is one of those "oh my god" moments in politics.

Because he is saying, in effect, that he has been morally compromised by the Chancellor and Prime Minister.

He insists that he reluctantly agreed to changes in the personal independence payment, which will reduce disability benefit payments by £1.2bn a year – and that he did so without knowing that they would fund tax cuts for the middle classes.

Here is why he is so angry: his long cherished hope of reforming the welfare system is – in his view – being corrupted by the imperative of shoring up Tory support for George Osborne and David Cameron, and of reducing the deficit as an ideological imperative.

Osborne and Cameron, via their intermediaries, are saying his hands are just as much steeped in the blood of this unpopular disability cut as theirs – and this is all about his visceral belief that they are wholly wrong in wanting Britain to stay in the EU.

Politics rarely gets nastier than this.

The current version of disability cuts are being scrapped but there could be a new version soon Credit: PA

UPDATE

So as I just said on News at Ten, a government source tells me the contentious "version" of cutting personal independence payments (PIP) to the disabled has been dropped.

Which is big news.

But let's be crystal clear, my source did not say that there would not be other disability benefit cuts. In fact he implied there would indeed be another "version" of the cuts.

Why?

Well there would be a pretty big hole in George Osborne's budget if he simply loses the £1.2bn a year he was banking on from the PIP reform.

And another thing.

My Downing Street source tells me Duncan Smith resigned knowing the Prime Minister was about to drop the PIP change.

Duncan Smith denies this. In fact one of his officials tells me that only last night Downing Street was chastising him for not being enthusiastic enough in selling the PIP reform.

This is one almighty government mess.

Most exposed right now is the Chancellor, George Osborne.

When recently asked why he went for the PIP reform, in the face of unease and opposition from his own benches, I understand he pointed the finger of blame at Duncan Smith as Work and Pensions Secretary.

Duncan Smith has tonight said he will not stay in government to be Osborne's human shield.

Which puts the Chancellor directly in the line of fire.