Chancellor Philip Hammond signalled he would drop the party’s 2015 manifesto pledge not to raise VAT, income tax or national insurance contributions.
Mr Hammond said: “The commitments made in 2015 do constrain the ability of the government to manage the economy flexibly.”
His remarks come just weeks after he tried to hike NICs by £240 a year for millions of self-employed people in his first Budget as Chancellor.
It was seen as an attack on the “white van man” and he was forced into a humiliating U-turn after it was pointed out the move would break the manifesto pledge.
He added: “The Conservatives are causing so much carnage to the economy they have had to admit the country is broke before election day.”
No10 tried to desperately to play down Mr Hammond’s comment, insisting “no decision has been taken” about the manifesto pledge.
But pressed later by the BBC Mr Hammond admitted “All Chancellors would prefer to have more flexibility in how they manage the economy and how they manage the overall tax burden down [rather] than having to have their hands constrained.
“But what we put in the manifesto will be decided in the next few days.”