Labour has accused George Osborne of trying to "bury bad news" by unveiling his latest climbdown while Culture Secretary Jeremy Hunt was giving evidence to the Leveson Inquiry.
"This decision has already done considerable damage and has been responsible for the toughest year in a generation for Britain's charities and community groups.
"If ministers understood the work charities did, the vital difference they make for some of our most vulnerable and the important contribution they offer to make our communities stronger, this policy mess could have been avoided.
"Instead we have the spectacle of George Osborne trying to bury bad news on the day one of his rivals is in hot water at the Leveson Inquiry."
Controversial plans to cap tax relief on charitable donations have been scrapped by Chancellor George Osborne.
This is another big Budget U-turn, this time on the charities tax.