Ed Balls has been accused of preparing a squeeze on middle income earners after he refused to rule out dragging more workers into higher rate tax.

The Shadow Chancellor said he had to "find a way" to get the deficit down when challenged to dismiss lowering the threshold that triggers the 40p income tax levy.

George Osborne said his Labour counterpart was ready for a tax assault on middle income workers but Labour dismissed the claims as "Tory nonsense".

When asked in an interview with ITV West Country if he was leaving the door open to changing the tax threshold, Mr Balls replied: "What I would like to do is find ways in which I could have fewer people in the 40% tax bracket. Of course I would.

"But I have to be honest with people. The deficit is going to be £90 billion. I have got to find a way to get the deficit down in a careful, and staged and balanced way."

The Chancellor said Mr Balls was poised to hit more middle income earners. Speaking at a Britvic factory in Pudsey, Yorkshire, Mr Osborne said: "He has made it pretty clear I think that he wants to drag more people into that 40p rate of tax... I think that is wrong now and the Conservative party has a very clear plan to raise the threshold to £50,000.

"We don't think it is right going forward to tax the middle earners in the way that he is proposing."

The Conservatives have pledged to raise the higher rate income tax threshold from £41,900 to £50,000 by 2020, benefiting middle earners who have been dragged into the higher rate by a series of freezes and reductions in the threshold under the Coalition.

It would lead to an 800,000 reduction - from 6.3 million to 5.5 million - in the number of people predicted to be paying the 40p rate by that point. This compares with just over five million now.

Labour said claims Mr Balls was leaving the door open to changing the threshold was "Tory nonsense", adding: "Ed Balls was clear and Labour's position is clear: we want fewer people paying the 40p tax rate. We want to ease burden on working families. Ed's words make that very clear."

Liberal Democrat leader Nick Clegg failed to rule out changes to the 40p threshold, but insisted that people would be left no worse-off because of his plan for further increases at the point at which people start paying income tax.

During the five years of coalition government he acknowledged that in some Budgets George Osborne had "dragged" more people into the 40p band.

He said: "On some budgets we have frozen the (40p) threshold, in others we have increased it, but at all times taxpayers - over 25 million taxpayers - have been better off because we have raised the point at which people start paying income tax and that has helped people in that higher bracket of income tax as well.

"We want to take exactly the same approach where everybody benefits, particularly people on low pay benefit, by raising the point at which you start paying income tax to £12,500. That has been, is and will remain the tax priority for the Liberal Democrats."

Mr Clegg, speaking in Bishopbriggs in Scotland on the election campaign trail, said: "As a party, our priority is raising the point at which you start paying income tax.

"Because that means that even people who are 40p taxpayers, they are certainly no worse-off and in some cases they are better off because the raising of the point at which they start paying income tax far outweighs what tax they might pay in the 40p bracket.

"That is the reason why we will continue with our emphasis of using every spare penny we have to give tax cuts to millions of people on middle and low incomes."

He added: "As a coalition Government with the Conservatives, the Conservatives keep trying to deny this, but the Conservatives have dragged more people into the 40p rate as well.

"The point is that actually those people haven't been any worse-off because they start paying income tax at a much higher point.

"I think that is what is lost in this debate, even the Conservatives have dragged more people into the 40p rate.

"But when you get your calculator out and work out actually what you pay, even as a 40p taxpayer, you are either no worse-off or better-off because we have raised the point at which you start paying income tax in the first place and that is the approach the Liberal Democrats will take in the next parliament as well."