By David Gardner

President Obama was facing a mutiny within his own Democrat Party tonight over his pledge to deliver tax cuts for America’s struggling middle class.

A group of 31 rebel Democrat congressmen and women have broken ranks to demand that all income levels are given tax breaks, including the wealthy.

Mr Obama insists he is targeting Americans earning less than £160,000-a-year.

But the breakaway Democrats fear that increasing taxes, even for the rich, could jeopardise the party’s chances in the looming mid-term elections.

Mutiny: President Barack Obama has clashed with his party as some Democrats demand tax breaks for the rich

The claim any hint of raising taxes could be political suicide at the ballot box in November.

The rebellion is a major blow to Mr Obama who is desperately trying to coral Republican support for the tax bill that was one of his key promises during his presidential campaign.

Speaking at the White House on Wednesday, he lambasted the Republican leadership for holding the middle class tax cuts ‘hostage’ to boost the pay packets of ‘millionaires and billionaires.’

He complained that extending the cuts to everybody would mean the government would have to borrow another £450 billion ‘to fund these tax cuts for the very wealthiest Americans.’

‘We simply can’t afford that. It doesn’t make any sense,’ he added.

The leader of the Democrat group, Congressman Jim Matheson, insisted yesterday: ‘In the short run with our economy where it is right now, I don’t think we should be raising taxes.’

He claimed that by extending tax breaks brought in under the Bush administration for another one to two years it would give a major boost to small business owners the rebels claim make up one-third of upper-income taxpayers and are ‘the backbone of our economic recovery.’

The congressman said the two parties should work together to get the country back on its feet.

‘People are tired of that bickering. They expect people back here to act like big boys and girls,’ he added.

Many of the rebels are in tight races in states that could easily swing to the Republicans in the polls.

They have all signed a letter to House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer urging across the board tax relief.

‘We believe in times of economic recovery it makes good sense to maintain things as they are in the short term, to provide families and businesses the certainty required to plan and make sound budget decisions,’ they wrote.

The split was revealed just a day after Mr Obama announced that two Republican senators had crossed sides to help pass a bill providing £20 billion in extra loans for small businesses.