Shadow work and pensions secretary David Willetts

The Conservatives have attacked the withdrawal of tax credit payments from families who have been overpaid.

Shadow work and pensions secretary David Willetts said the means-tested system was fundamentally flawed.

His comments on Monday came after Citizens Advice wrote to the government to protest at the sudden withdrawal of overpayments, following a flood of calls to its offices for help.

Willets said the Inland Revenue, which administers the system, was incapable of delivering social security benefits.

Citizens Advice has raised concern over the sudden drop in payments to thousands of families.

Child and working tax credits were introduced in April by the Treasury but have been beset by problems.

A media storm broke out earlier in the year over the Inland Revenue's understaffed help centres and over-complicated application forms which led to millions of families missing out on money.

Subsequently several thousand claims have had to be readjusted to take account of the fact that the data on parents income used to assess the awards are up to two years out of date.

Ministers have put the difficulties down to "teething problems" with the chancellor's flagship redistribution scheme and insisted that six million families are benefiting from the cash.

But Willetts argued that the system was institutionally faulty.

"Sadly I don't think they are just teething problems," he told the BBC.

"The fundamental question is whether the Inland Revenue with its culture and its way of collecting tax on an annual basis from more affluent people is really capable of delivering social security benefits on a reliable weekly basis to people with very low incomes.

"That was Gordon Brown's experiment and so far, I'm afraid, the evidence is it is not working and it is causing large amounts of distress to people who can't really adjust their affairs when suddenly they are told they are going to lose £40 a week out of an income of £150 a week they were relying on."

Willetts added that the Conservatives wanted to "disentangle" social security and the Inland Revenue.

But in the short term he demanded the reductions in payments should be halted over the Christmas period.

"They should stop the immediate reclaiming of significant sums from low income families now," he said.

Liberal Democrat work and pensions spokesman Steve Webb agreed that the government should act to soften the blow on families.

He accused the Inland Revenue of "adding insult to injury" by the way in which it had tried to recover overpaid tax credit.

"First they made the benefits a nightmare to claim, then they bungled the payments by giving the wrong amount to thousands of people," he said.

"And finally they are trying to recover the money in a ham-fisted and aggressive way.

"Recovering overpayments should be done gradually and without reducing people to poverty."

However the Inland Revenue maintained that the policy was just.

"Almost six million families are benefiting from the new tax credits," a spokesman said.

"Some of these families' circumstances are bound to change through, for example, a pay rise or their children leaving home. That is why the tax credits system was designed to be as flexible and responsive as possible.

"So where overpayments do occur they are recovered once the Revenue has been informed of the change.

"People should let us know as soon as possible to prevent overpayments mounting up. Where recovering overpayments causes hardship additional payments are made."

And a Labour spokesman added that the Conservatives position disguised a desire to cut the payments altogether.

"David Willetts is wrong. Six million people are benefiting from the new tax credits," he said.

"His comments are further proof that the Tories want to scrap the tax credits and deprive all of these families of the extra money they are receiving.

"We will make this a key issue in every constituency at the next election."