The Government dismissed speculation yesterday that it was about to roll back on a levy on wealthy foreigners who have so far been able to legally avoid paying UK tax.
But most pundits reckoned it had made concessions and the Conservatives claimed Labour had been forced to water down the plans.
Chancellor Alistair Darling had announced a plan in October to give non-domiciled individuals living in Britain the choice - after seven years - of either paying an annual £30,000 levy or to fall under the UK tax system.
Pressure has grown on Mr Darling to backtrack on the plan in his first Budget next month given comments by Trade Minister Lord Jones of Birmingham that such a policy would drive away investment. Despite the controversy, a Treasury spokesman insisted there had been no policy change.
"The Government's policy remains as it was set out in the Pre-Budget Report," he said. "The final legislation will reflect the Government's intentions that were set out."
In a letter of clarification to tax advisers, acting chairman of Revenue and Customs Dave Hartnett said the reforms would maintain "the competitiveness of the UK as a place to work and do business".
Mr Hartnett said individuals who want to pay the £30,000 charge - and continue only paying tax on foreign income when they bring it into Britain - will not need to disclose any information on the source of those remittances.
He also said the tax changes will not be applied retrospectively and that discussions were ongoing as to how the levy could become creditable against US tax.
But Conservative spokesman on economic affairs George Osborne said those clarifications were, in fact, "significant climb downs".
"They are clearly different from both previous Treasury briefings and draft legislation published along with the consultation," Mr Osborne said.
Business groups welcomed the move to avoid taxing historical gains from offshore trusts.
"This clarification is a victory for common sense. The proposals were clearly cobbled together in a hurry," said John Cridland, deputy director general of the Confederation of British Industry.
"It was not just a tax on the 'super-rich' but affected tens of thousands of accountants, lawyers and managers who work hard in the UK."
But Chief Secretary to the Treasury Yvette Cooper rebuffed claims that the Government was in retreat on the issue.
"We consult on draft legislation deliberately in order to make sure we get the details right," she said.
The Prime Minister had come under further pressure to back down over the plans to charge non-domiciled foreigners when a former Lord Mayor of the City added his voice to the opposition.
Sir Michael Savory warned that entrepreneurs would desert the UK if the Government pressed ahead, possibly choosing to base themselves in Dubai or Singapore instead.
His warning came after Government Trade Minister and former CBI chief Digby Jones attacked the plans last week.
The comments from Lord Jones sparked a furious response from union leaders, who claimed he should be sacked.