Opposition pounces as Blair hints at major shake-up of CSA

Yesterday, the Liberal Democrats revealed figures showing that the CSA has made nearly 36,000 compensation payments for improperly handled cases since 2001.

That put the Prime Minister on the defensive when Charles Kennedy, the Lib Dem leader, confronted him about the CSA in the Commons.

"We are looking urgently at what the solutions may be to it, but I have to say I think that the problem is a fundamental one which is the nature of the task that they're called upon to perform," Mr Blair said.

"For reasons I understand, the previous government established the Child Support Agency in order to make sure that parents carried out their obligations to their children. The truth is, the agency itself is not properly suited to carry out that task."

That remark prompted a welter of speculation that the CSA could be abolished and its duty to collect maintenance payments handed to the Inland Revenue.

But government insiders last night tried to play down that speculation, insisting that an internal review by Stephen Geraghty, the CSA's chief executive, must be completed before ministers take decisions about the agency's future early next year.

The Prime Minister was merely "posing questions" about the CSA's structure, his spokesman said.

"What the Prime Minister was acknowledging was that there are real problems and there have been real problems," the spokesman said. "We also know there have been improvements in the performance of the CSA that should also be noted."

And a source at the Department of Work and Pensions said that while "all options were on the table" when Mr Geraghty reports, it would be "premature" to conclude that the agency's abolition is certain.

However, opposition parties insisted that Mr Blair has now raised expectations about serious reform of the CSA.

"The Prime Minister's comments imply that he realises there is no other way forward than to scrap the CSA. We do not need to wait until the new year for a statement on the future of the CSA," said David Laws, the Lib Dem spokesman on work and pensions.

"Parents who view the CSA with nothing but contempt or despair need to know that its days are now numbered and that its functions will be transferred to the Revenue, so that it better serves those who are trying to pay their maintenance and properly pursues those who aren't."

Paul Goodman, a spokesman for the Conservative Party, said: "Desperate families are waiting for government action on the CSA.

"It's time for clarity, not more spin from Mr Blair."