Homelessness charity Centrepoint welcomed signals today that housing benefit for young people would be saved from Chancellor George Osborne's swinging axe.
Prime Minister David Cameron suggested in June that government cash to help under-25s pay for housing could be cut, in order to save the government around £2 billion.
The proposed cut was expected to be one part of a package of £10bn of cuts to welfare spending that will be announced by the Chancellor this week in his autumn statement.
But senior Liberal Democrat Greg Mulholland MP signalled that the Tories' latest assault on young people's welfare would not be included in Wednesdays's statement.
Seyi Obakin of Centrepoint said: "The negative impact on society and the hundreds of young people we work with, both in terms of homelessness and unemployment, would have far outweighed any cost savings the government may have been able to secure on this occasion."
Although it looks likely the cut will not be made under Westminster's coalition government, Mr Cameron has said he hopes the plan will be included in the next Conservative manifesto.
Eton-educated millionaire Mr Cameron has suggested young people should live with their parents until they can pay for accommodation from their own pocket.
But a housing expert believes Mr Cameron's attitude could leave hard-working, young families homeless.
Shelter chief executive Campbell Robb said: "Most people under 25 who can live with their parents already do so, but not everyone has this option.
"Lots have adult responsibilities of their own, such as a young family to support or a job that they're working hard to keep. Others have left home to escape family problems. These proposals would leave them with nowhere to go."
Mr Mulholland, who is chairman of his party's work and pensions policy group, told the Observer that the "Lib Dems would not stand for cutting housing benefits for under-25-year-olds."
He said the cut would "not only be unjust and unfair but would have unacceptable consequences for many young people."
Around 380,000 under-25s across Britain currently claim housing benefit.
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