The government was also blamed for panic-buying at some fuel stations after a senior minister advised motorists to stock up ahead of a threatened strike by tanker drivers, only to be contradicted hours later by Prime Minister David Cameron.

Coming days after the 2012 budget was poorly received and Cameron was embroiled in a "dinners for donors" scandal over rich Conservative backers enjoying hospitality at Downing Street, the pasties-and-petrol debacle capped the party's worst public relations disaster since taking office in May 2010.

"Pasties, petrol and the politics of panic," was the banner headline in the middle-brow Daily Mail, which is usually sympathetic to the centre-right Conservatives. Even the serious and staunchly pro-Conservative Daily Telegraph referred to Cameron's "trial by pasty".

The price of pasties, pastry parcels with a savoury filling, is set to rise after finance minister George Osborne announced as part of the budget that freshly baked hot food sold in any shop would no longer be exempt from Value Added Tax VAT.L.

The political heat started to rise after Osborne, questioned by a member of parliament on Tuesday, said he could not remember when he had last bought a pasty from Greggs, a cheap bakery chain favoured by working people.

In the uniquely class-ridden minefield of British politics, the acknowledgement was embarrassing for Osborne, who like Cameron comes from a wealthy background and attended an exclusive private school and the elite University of Oxford.

LET THEM EAT PASTIES

But "pastygate", as it was predictably labelled, really hit the headlines after Cameron on Wednesday told a news conference he was a big fan of pasties and had last bought one at an outlet inside the train station in the northern city of Leeds.

The outlet in question had closed in 2007 and the blue-blooded Cameron was ridiculed for a clumsy attempt to portray himself as a man of the people.

"Half-baked" was the tabloid Sun's front-page verdict on his efforts. "PM's bid to take heat out of pasty row is hard to swallow," it added.

The Sun, Britain's highest selling paper, also dispatched a model dressed as the French queen Marie-Antoinette, of "Let them eat cake" fame, to Osborne's Treasury to distribute pasties.

The Daily Mirror, left-leaning arch-rival to the Sun, ran a comment piece by the chief executive of Greggs who invited Osborne to visit one of the chain's shops to see for himself the impact of the VAT hike on hard-pressed consumers.

The government has imposed a seven-year austerity programme to tackle a bulging budget deficit, while the economy is struggling to emerge from a prolonged downturn following the 2008 crash, leaving many families struggling to make ends meet.

Beyond Thursday's jokey headlines was a serious setback for the Conservatives, who need to widen their appeal before the next election, scheduled for 2015. In the 2010 poll, they fell short of a majority and had to form an uneasy coalition with the smaller, left-leaning Liberal Democrats.

"This genuinely is the worst week so far for the government, and particularly the Conservative side of the government," said influential online Conservative activist Tim Montgomerie.

"This last week has encapsulated what for Labour is their central critique of the government, and particularly George Osborne and David Cameron, that they don't understand how ordinary families are coping with the recession," he said.

SAUSAGE ROLLS

Labour was indeed having a field day with pastygate. Party leader Ed Miliband flanked by his treasury chief Ed Balls, staged a photo opportunity at a branch of Greggs where they bought sausage rolls, another popular snack.

The VAT hike on snacks was only one of the contentious measures in a budget that also included an income tax cut for the highest earners and the so-called "Granny tax", a phasing out of a type of tax relief for pensioners.

The budget was widely reported as a package that benefited the Conservatives' wealthy support base while tightening the squeeze on less privileged voters. The government's efforts to highlight other measures, such as a significant tax cut for those at the bottom end of the income scale, fell on deaf ears.

As if this were not damaging enough, the party was hit by an ethics scandal when a senior fundraiser resigned on Sunday after being secretly filmed offering exclusive access to Cameron in return for donations of 250,000 pounds a year.

The party botched its early response, with Cabinet Office Minister Francis Maude calling the story "a bit of a nonsense" on prime-time radio on Monday and saying it was unreasonable to expect Cameron to disclose details of his private dinners.

Hours later, Cameron bowed to pressure and did disclose that a handful of rich financiers and industrialists had dined at his private apartment in Downing Street, reinforcing the Conservatives' image to its detractors as a party in the pockets of big business.

"The reason why these stories have joined up into a single thread is that it's telling us the story that here is a government that you can easily portray as out of touch with the rest of the country," said Phil Collins, who was an adviser to former Labour Prime Minister Tony Blair.

Cameron's pasty blunder was the latest in a string of ill-fated attempts by Conservative leaders to find the common touch.

Former party leader William Hague famously claimed to have drunk 14 pints of beer a day as a teenager, to try and dispel his image as a political geek. The tactic backfired as the erudite Hague was ridiculed for the claim. Now a widely respected foreign secretary, he steers clear of populist stunts.

In an alternative strategy, the maverick Conservative mayor of London, Boris Johnson, embraces his image as an upper-class eccentric who quotes ancient Greek. Despite attending Eton, the elite school where Cameron was also educated, and being a fellow member of the exclusive Bullingdon Club when at Oxford, Johnson has not suffered from Cameron's presentational problems.

(Editing by Ralph Boulton)

• A Permanent Economic Emergency