Andy Burnham risks reigniting the party’s bitter divisions over welfare reform after Alan Milburn revealed his long-awaited review on how to get more young people into work will suggest limiting their benefits.

Milburn is due to publish his review into so-called Neets – those not in employment, education or training – on Tuesday and the Government has indicated it will accept his recommendations in full.

In an interview with , however, the former Labour minister revealed some of his suggested plans, adding that reform would not come without “pain”.

Under the proposals, under-25s would no longer be able to claim the health element of universal credit (UC) or personal independence payment (PIP).

Instead, they would be moved on to a new youth allowance, paid at the standard rate of UC with a separate additional cost allowance potentially available to help cover disability-related expenses.

Those unable to work because of more severe disabilities would be eligible for a separate, higher-rate benefit.

Most controversially, the changes could affect existing as well as new claimants, and Milburn has acknowledged that some young people could initially receive less financial support than they do under the current system.

Andy Burnham is under pressure to reduce the UK’s welfare bill, which is around £330bn a year – 10 per cent of GDP.

He has promised to avoid “crude cuts” after his predecessor Sir Keir Starmer was forced to backtrack on plans to slash £5bn from the welfare bill in the face of a rebellion by his MPs.

But Burnham may face a similar fight, MPs have indicated to The i Paper, if Milburn’s reforms are adopted.

Critics fear that replacing existing financial support with a lower-rate allowance, alongside potential conditions on receiving benefits, risks penalising disabled young people rather than addressing the barriers preventing them from working.

Nadia Whittome, Labour MP for Nottingham East, told The i Paper that the proposals risk repeating the political mistakes that damaged Starmer. She said: “Disability benefit cuts were Keir’s undoing, so it would be mad for Andy to make the same mistake and split the PLP [Parliamentary Labour Party] over this issue.

“Youth unemployment is a serious problem in my constituency, and the Government is right to tackle it. But I fear the leadership is in real danger of falling into the Tory trap of blaming young disabled people for the dire state of our economy, and of conflating two separate challenges.”

Brian Leishman, Labour MP for Alloa and Grangemouth, told The i Paper: “Any changes to the system must have compassion at its heart. From what I’ve heard so far, I have huge reservations because stopping young people’s access to disabled and sickness benefits is not compassionate.”

Bell Ribeiro-Addy, Labour MP for Clapham and Brixton Hill, said she was unsure whether she could support the proposals without greater clarity over their impact.

Speaking to BBC Radio 4’s programme, she said: “I don’t think you get a disabled young person into work by taking away the money that helps them get into work.”

The criticism is politically sensitive for Labour, which has already experienced significant internal opposition to attempts to reform disability benefits.

A Labour minister suggested the party was in a better position politically than during the previous welfare battle, but warned that the detail of Milburn’s recommendations would be crucial.

“I think we are in a better place than last time, with considerably more goodwill towards Andy,” they said. “However, the devil will be in the detail. If the suggestion is that money currently going to young people is to be reduced and redirected into employment support, I think that will be potentially very problematic.

“I also think it is clear that this will not deliver an immediate reduction in the benefits bill.”

Another Labour MP warned that the proposals risk breaking previous assurances that there would be no “crude cuts” to welfare support, arguing that young people should not be penalised for a lack of employment opportunities.

“I am waiting to see what proposals are in full, but we were promised no crude cuts; young people losing support when there are no jobs for them to go to is not right. They should not be punished for something that they can’t control. The North East has the highest Neets; we desperately need jobs and investment.”

A further Labour MP said they would be deeply concerned by any attempt to reduce disability benefits or make financial support conditional on participation in employment-related activity.

“My initial thinking is there is a partial red flag in the sense that if you’re going to start cutting support for disabled people, that’s something I could never really support,” the MP said.

“I would not support making disabled people worse off. Based on what has been reported, it sounds a bit scary for some groups, because it’s going to be applied to existing claimants. I feel colleagues will not be happy. No one’s going to ever want to see cuts.”

However, there are also signs that some Labour MPs who opposed the Government’s previous welfare reforms are prepared to give Milburn’s proposals a hearing, particularly because of their emphasis on tackling the barriers that keep young people out of work.

Meg Hillier, Labour MP for Hackney South and Shoreditch, who played a prominent role in the campaign against last year’s proposed PIP cuts, said she was willing to give the review the benefit of the doubt.

“What happened last year was a cut was being proposed and none of us could explain to people what would happen to them. Milburn has done some very good work on this so I’m giving him a fair wind,” she told BBC Radio 4’s World at One.

Dr Simon Opher, Labour MP for Stroud, who also opposed the previous welfare reforms, has welcomed the focus on helping young people with mental health problems into employment

He said the vast majority of young people wanted to work, but warned that reducing their benefits should not be the starting point for reform. “Cutting benefits should be a last resort,” he said.

A government spokesman said: “The Milburn and Timms reviews are due to be published in the coming weeks, and we will respond to their recommendations in full. 

“We will always ensure there is a safety net for the most vulnerable and those who are unable to work. But the Prime Minister has been clear that we need a wholesale change in the way we support young people to grow up in this country, where we invest in their success rather than paying for failure.”