Liz Truss has U-turned on her latest leadership policy pitch to “wage war on Whitehall waste” after a Tory backlash over its impact on public sector pay.

On Monday night, the foreign secretary said she would save £8.8m by introducing regional pay boards instead of national ones to set salaries for civil servants, reflecting where they lived.

But this would mean paying government employees in poorer parts of the country less than their counterparts in more affluent areas, such as the South East and London.

And experts warned to reach the sum, the plan would have to branch out further than government departments, with the likes of teachers, nurses and police officers also facing lower wages than workers in the South.

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The plan sparked outrage from a number of Conservatives, with many of her rival Rishi Sunak’s backers taking to social media to call it “crackers” and “austerity on steroids”.

The influential Tory Mayor of the Tees Valley, Ben Houchen, also told reporters the policy would be “a sure-fire way to lose the next general election”.

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But by lunchtime today, Ms Truss’ team had released a statement insisting “current levels of public sector pay will absolutely be maintained”, adding: “Our hard-working frontline staff are the bed rock of society and there will be no proposal taken forward on regional pay boards for civil servants or public sector workers.”

They also claimed there had been a “wilful misrepresentation” of the policy, but former Tory whip Mark Harper said Team Truss should “stop blaming journalists” for reporting on the details in her own press release.

Labour’s shadow chancellor Rachel Reeves said the “latest mess” from the Tory leadership campaign “exposed exactly what Liz Truss thinks of public sector workers across Britain”.

She said the episode “revealed her priority would be to slash the pay packets of working people”, adding: “That would suck money out of local economies and send our communities backward.”

Liberal Democrat leader Sir Ed Davey said: “U-turning on a multi-billion-pound policy five weeks before even taking office must be a new record.

“We can’t let Liz Truss run the country with the same incompetence she’s running her leadership campaign.”

Ms Truss appears to be standing by the rest of her Whitehall waste plan to cut a further £2.2bn in spending – including removing diversity and inclusion roles from government departments, considering a reduction in holiday from 27 to 25 days and moving more civil service jobs out of London.

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