The Labour Party has abandoned its plans to abolish charitable status for private schools, but still plans to plans charge 20% VAT on school fees and scrap the 80% relief private schools receive on business rates.

A Labour spokesman said: “We will remove the unfair tax breaks that private schools benefit from, to fund desperately needed teachers and mental health counselling in every secondary school.

“This doesn’t require removing charitable status, however, driving high and rising standards for every child against the backdrop of a broken economy requires political choices.”

Julie Robinson, head of the Independent Schools Council, said: “If Labour takes away the tax relief associated with charitable status for independent schools, the policy would create a two-tier system within the charity sector, setting a worrying precedent that any charity seen as not reflecting the political ideology of the day could by subject to additional taxes.”

Sir Anthony Seldon, head of Epsom College called on Labour to stop “flip-flopping” on policy, saying: “They should be trying to improve state schools and not least by having steady policy, not flip-flopping.”

A source in the Conservative Party told the i newspaper: “Education provision is exempt from VAT, and any law change will lead to a ton of unintended consequences for other teaching providers. Labour have got themselves into a right mess here.”