PM defends U-turns as sign of 'resolve, strength and grit' as reports of pre-budget policy disputes reflect badly on Osborne

Mistakes in the budget had left the government "ploughing into a brick wall", the prime minister has admitted as he defended successive U-turns, but he insisted the government overall was showing "resolve, strength and grit".

David Cameron's frank assessment of the budget errors came as fresh reports emerged of policy disputes on the eve of the budget that reflect poorly on chancellor George Osborne's judgment.

Osborne, feted over the past five years as the key Conservative political strategist, has seen his stock take a precipitous tumble over the budget. It was reported that his parliamentary aide personally urged him to drop the "granny tax" and "pasty tax" on the eve of the budget, saying they would be wildly unpopular.

Cameron, speaking on BBC1's Andrew Marr Show, said it took courage for an administration to admit it was "ploughing into the brick wall" and change course on unpopular policies.

On Thursday, the chancellor had bowed to intense pressure to cap tax relief on charitable donations – his third budget about-face in less than a week.

Earlier in the week, he conducted partial U-turns on VAT on hot takeaway food and on static caravans.

Osborne said he was undertaking the U-turn on charities in part to focus his attention on the eurozone crisis. He has now abandoned his role as the government's chief strategist.

Cameron said: "We've taken difficult decisions on the deficit, which we've cut by a quarter in two years, difficult decisions on public sector pay, reforming public sector pensions, standing up to public sector strikes. Nobody thinks this government lacks resolve, strength and grit.

"It has all of those things and it also has the courage to say, 'Look, if we've got something wrong, let's change it; let's not keep ploughing into the brick wall.'"

He added: "There have been difficulties in the budget and we've had to make some changes.

"When you've got something wrong, there are two things you can do in government: you can plough on regardless, or you can say, 'No, we're going to listen, we're going to change it, we're going to get it right.' And that's what we've done and I think that's the right thing to do."

The measures "at the heart of the budget" remained in place, he said – lifting the threshold at which people start to pay income tax and cutting the top rate of tax from 50p to 45p.

It has been reported on the ConservativeHome website that Osborne, as the Guardian reported before the budget, wanted to cut the top rate of tax down to 40p but was blocked in the final negotiations by Cameron and the deputy prime minister, Nick Clegg. Osborne had intended to say the government would cut the top rate to 40p by the end of the parliament.

Some of the current tensions between No 10 and 11 flow from the dispute, even though those tensions are mild compared with similar rows in the Labour era.

But the Mail on Sunday has reported that Osborne's parliamentary aide, Sajid Javid, warned him him that the budget, including the granny tax, would be a disaster. Osborne had told him it was too late to change anything.

A Conservative MP writing on condition of anonymity in the same paper accused Osborne of being a part-time chancellor with little grasp of the detail. The author also claimed that Osborne's supporters in parliament were alienating colleagues by acting as his "narks" (informants).

The anonymous MP writes: "It is completely wrong for whips to be answerable to a particular minister, instead of the prime minister. But that is 'Gideon's Gang' for you. His prospects of succeeding Cameron are receding fast: shares in Osborne have fallen through the floor."

Some form of capital spending package is being prepared by the Treasury either in the form of Treasury guarantees for spending backed by pension funds or a straight capital spending programme. The Bank of England may sanction a further round of quantitative easing this week if service sector figures slide further this week.

A YouGov poll for the Sunday Times found only 18% think Osborne is doing a good job while 58% think he is doing a bad job. That compares with a 34%/60% rating for Cameron. The public is evenly divided on whether the U-turns show a listening or incompetent government.

The poll also shows Osborne is blamed for the U-turns: 31% of those who see the U-turns as a sign of weakness or incompetence blame him for them. That compares with just 18% who blame the prime minister and 15% who blame Nick Clegg.