Keir Starmer’s decision not to scrap the two-child benefit cap if Labour wins power has exposed deep splits within the party, as he faces mounting calls to rethink the policy. Facing the prospect of a battle at this week’s national policy forum (NPF) over the controversial decision, shadow cabinet ministers were sent out to defend his position. They argued that if Labour wanted to appear fiscally credible at the next election, it could not make any spending commitments without saying how they would be funded. But at a bad-tempered meeting of the parliamentary Labour party on Monday, almost every question to the deputy leader, Angela Rayner, was about Starmer’s stance on the two-child benefit limit. Some frustrated MPs called it a mistake and urged party leaders to reconsider. Senior party figures, including Anas Sarwar, the leader of the Labour party in Scotland, which sets its own policy, publicly broke ranks and suggested they would fight the policy, while several shadow cabinet ministers said they were “despairing” at the decision. The Labour leader faces further challenges to his stance at the NPF, a key meeting that is part of the manifesto process. Sources said that “multiple” amendments to scrap the cap had been tabled to draft policies. On a difficult day for Starmer, a leftwing regional mayor who has been blocked from being Labour’s candidate for the north-east mayoralty announced that he was quitting the party to try to run as an independent. Jamie Driscoll said in a statement on Monday that “people are tired of being controlled by Westminster and party HQs” as he hit out at Starmer over broken pledges. However, it was Starmer’s confirmation on Sunday that Labour was “not changing” the two-child benefit cap policy, which has been widely criticised as unfair, cruel and ineffective, and one of the biggest drivers of child poverty, that caused him the biggest headache. Sarwar said he would press him to scrap the two-child limit. “We continue to believe that it exacerbates poverty, and we continue to believe that it needs to change,” he told the Daily Record. “What we recognise is, an incoming Labour government will inherit economic carnage, and that means we will not be able to do everything we want, and we won’t be able to do everything as fast as we want. “But we will continue to press any incoming UK Labour government to move as fast as they can within our fiscal rules to remove this heinous policy.” Meg Hillier, the Labour MP for Hackney South and Shoreditch, and chair of the Commons public accounts committee, told the BBC: “Well, I was never comfortable about having the child benefit cap come in … Personally, I’d be lobbying for a lifting of that.” Rosie Duffield, the Labour MP for Canterbury, who is on the centre-right of the party, responded to Starmer’s comments by describing the two-child policy as “one of the most unpleasant pieces of legislation ever to have been passed in the UK”. She tweeted: “It’s very rare for someone to enter the House of Commons having been on tax credits, but myself and a few others did in 2017; scrapping this cruel policy was one of our shared political motives.” One Labour frontbencher said that even if the policy was popular with focus groups, it was “toxic, morally wrong and doesn’t work”. Other MPs, including those who backed Starmer’s leadership bid, said there was a lot of unhappiness across the party. House of Commons library research last week showed that scrapping the cap would lift 270,000 households out of poverty at a cost of £1.4bn. Experts said the two-child benefit limit, which restricts welfare payments to larger families in an attempt to force parents to find work, has failed to increase employment levels – but left hundreds of thousands of households in poverty. However, senior Labour figures are anxious about the Conservatives “totting up” any promises they make before the election as unfunded spending commitments, as they did to brutal effect before the 1992 general election. The shadow home secretary, Yvette Cooper, told Sky News that Labour needed to “be clear about what we can fund”, adding that “anything that we might want to change, anything we might not like that the Tories have done, we’ve still got to say how we’d fund it”. Sources close to Starmer said his view on the policy – which he said in 2020 he wanted to scrap to help “tackle the vast social injustice in our country” – had not changed, but that he was not willing to make pledges without saying how they would be funded. One said: “You can’t on one hand say that you want fiscal responsibility and on the other say there’s all these things you want to do but not how you’ll pay for them.” Shadow cabinet ministers, some of whom have been publicly scathing about the two-child cap during Starmer’s three years as leader, are said to have raised concerns directly with him. One source said he could revisit the policy when public finances improve. However, Starmer will come under further pressure when Labour MPs, members and unions meet at the NPF in Nottingham to thrash out draft policy as part of the manifesto process. Proposed additions include commitments to ending “punitive” benefit sanctions. The shadow welfare secretary, Jonathan Ashworth, who last month described the policy as “heinous”, will chair a session where NPF members will thrash out “consensus language” on the party’s position, but without a vote, on the two-child limit.