The following correction was printed in the Guardian's Corrections and clarifications column, Friday 13 August 2010

The piece below claimed that a junior health minister, Anne Milton, had recently written to the Scottish Office about free school milk, but that institution disappeared in 1999.

The coalition government was accused of making policy "on the hoof" yesterday after plans to remove free milk for the under-fives were summarily dropped by David Cameron amid fears it would remind voters of the "Thatcher milk snatcher" episode of the 1970s.

Cameron moved so quickly that David Willetts, the higher education minister, was on live television defending the idea of removing free milk when the prime minister announced the U-turn, leaving broadcasters to tell Willetts of the change.

The idea of cutting free milk had been the brainchild of the junior health minister, Anne Milton, who today received the full backing of the prime minister and the health secretary.

A spokesman for the Department of Health saidtoday the proposal was "one of the options" being considered, adding: "We have decided to rule it out.

"The prime minister and the secretary of state for health have full confidence in Anne Milton," he said. "She is a very good minister doing what she was asked to do – come up with ideas to save money. But we are not going ahead with this one."

The government expected opposition to the measure from the media, parents, nurseries, childminders and the dairy sector. In a letter to the Scottish Office, Milton said: "Abolition of the scheme is likely to be highly controversial, particularly as this will affect some children in low-income families." She added: "This should not prevent us from ending an ineffective universal measure … given the state of public finances and the need to make savings."

Milton said that the cost of running the scheme in England this year was nearly £50m and would rise to £59m in 2011-12. She said the programme did not "provide value for money in difficult times" and had "become increasingly outdated".

Health was one department that had been due to have its budget protected in the autumn spending review.

The plan had not been relayed to Cameron personally, and the swiftness of his response appears to show the resonance Thatcher's decision still has within Downing Street.

Thatcher's plan to halt free school milk for the over-sevens as education secretary in 1971 remains one of the most remembered aspects of her political career.

Asked about Milton's plans on BBC1's Andrew Marr Show this morning, Willetts said: "We're having a comprehensive spending review, so we are looking at a whole range of options. This is one of the options that is being looked at.

"If it were to happen, and no final decision has been taken, then obviously it would be very important to protect the poorest families and make sure that they continue to have access to a healthy diet." But even as the minister spoke, Downing Street was making clear to reporters that the idea would not be going ahead.

When this information was conveyed to Willetts on screen, he replied: "We have to look at a whole range of options. Of course they have to be looked at on their merits."

He added: "We have an endless process of assessing options. Of course, it is inevitable that if you go through those decisions, some options go ahead and others don't."

However, Andy Burnham, the shadow health secretary, dismissed the notion that the proposal was not being seriously considered. "This was not an off-the-cuff piece of policymaking," he said. "This was at the final stages of consultation."

Ed Balls added: "This is a coalition in chaos, making policy on the hoof."

Lesson from 1971



Margaret Thatcher earned the unflattering sobriquet "Thatcher, Thatcher, milk snatcher" as education secretary in Edward Heath's government with the decision to axe free school milk for the over-sevens in 1971.

It was the most infamous cut made by the Tories, returned to power in 1970 at a time when the economic outlook was bleak and drastic measures had to be undertaken to meet election promises on tax. It cemented the public's view of her as an over-zealous cutter long before she became prime minister in 1979.

At the time, Labour's education spokesman Edward Short attacked the proposals as "the meanest and most unworthy thing" he had seen in 20 years in the Commons. Thatcher's cuts in education funding subsequently saw Oxford University refusing her an honorary degree in protest.

However, documents released under the 30-year rule revealed that Thatcher was considering several cost-cutting measures, including charges for borrowing library books, increased prices for school meals and admission fees for museums.

She had privately advised against cutting free school milk on the grounds it would "arouse widespread public antagonism".

She later wrote in her autobiography: "I learned a valuable lesson. I had incurred the maximum of political odium for the minimum of political benefit."

Caroline Davies