A row has flared in the Labour Party after a leading Blairite MP called for inheritance tax to be abolished.
Stephen Byers' demands for the next Labour leader to scrap the controversial tax were sharply rebuffed by the Treasury and a former Cabinet colleague.
The tax, levied on all estates worth more than £285,000, was "a penalty on hard work, thrift and enterprise", the former Transport Secretary said.
Replacing it with higher green taxes would enable Tony Blair's successor to demonstrate to the middle classes that Labour remained "relevant and meaningful", he added.
But the Treasury dismissed his proposals as impractical as a series of Labour MPs distanced themselves from him.
Birmingham Erdington MP Sion Simon said: "Mr Byers is completely isolated on this. Any suggestion that the middle classes cannot trust Gordon Brown is untrue."
And Trade and Industry Secretary Alistair Darling said: "It may make for a headline, but I don't think it makes for a prudent tax and spend policy."
Rhondda MP Chris Bryant said: "It seems extraordinary to me that a Labour MP should attack a Labour Government with a right-wing proposal that was rejected by Margaret Thatcher as being too extreme."
A Treasury source dismissed Mr Byers as a back-bencher: "We receive many representations from back-bench MPs and we are always happy to point out the practical issues with their proposals."
Mr Byers, who resigned in 2002 after a series of scandals at his department, has remained a close ally of the Prime Minister and he cautioned against assuming that the Chancellor would be the next Labour leader.
"Everybody assumes and he clearly is the favourite," he told BBC Radio 4's The World This Weekend.
"I'm getting away from this personality politics and who it's going to be."
Mr Byers said the Government had to "continually" demonstrate it was "relevant and meaningful" to the British public.
"Let's have a debate about the future of inheritance tax as one of a number of major issues that Labour needs to be addressing to demonstrate clearly that, whoever becomes leader, we remain New Labour - we will be reforming, modernising and pragmatic."
Setting out his proposals in The Sunday Telegraph, Mr Byers warned that soaring house prices threatened to bring millions more within the "net" of inheritance tax.
He suggested increases in "green" taxes to fund the move.
The Liberal Democrats said abolishing inheritance tax was not enough.
Their trade and industry spokesman Ed Davey said: "Stephen Byers is right to say that the tax system needs to be reformed.
"But for years he served as a Cabinet Minister in a govern-ment which has presided over an increasingly unfair, inefficient and complex approach to taxation.
"Abolishing inheritance tax would not change this. A sensible alternative would be to levy a tax on the amount each individual receives - rather than on the overall value of the estate.
"It beggars belief that after nine years of a Labour government, the poorest ten per cent of people contribute more of their income to the government than the richest ten per cent.
"We need to take lower income families out of income tax altogether, scrap the unfair council tax and switch the burden of taxation on to activities that damage the environment."