British Prime Minister David Cameron was forced into a hasty cabinet reshuffle on Saturday as the dramatic resignation of a senior minister threatened to widen divisions over Europe within the ruling Conservative party.

In his resignation letter on Friday, Duncan Smith, a former Conservative party leader, cited cuts to disability benefits outlined in Osborne's annual budget last week, which also included tax cuts for richer households. He complained about pressure from the Treasury to cut welfare payments in order to meet fiscal conditions set out by Osborne.

"I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest," he wrote.

By suggesting that cuts were hitting the poor harder than the rich, Duncan Smith also cast doubt on one of Cameron's key mantras, that austerity was being equally shared by all.

Responding, Cameron said he was "puzzled and disappointed" by Duncan Smith's decision to leave the Cabinet post he has held since 2010. On Saturday, he appointed former Welsh Secretary Stephen Crabb, who wants Britain to stay in the EU, to the role.

Duncan Smith’s resignation comes at a time when the Conservative Party is already deeply divided over an upcoming referendum on whether Britain should stay in the European Union.