Image: The Art Fund has welcomed the decision

The Art Fund is among a number of charitable organisations to welcome George Osborne's decision to drop plans to introduce a cap on tax relief on donations of more than £50,000.

HM Treasury's cap would have also applied to gifts worth 25 per cent of a charity's income and was designed to prevent individuals using the available reliefs to avoid paying tax.

It is estimated that £11bn is donated to charities each year, 45 per cent of which is thought to come from a mere 7 per cent of donors - most of whom are higher-rate taxpayers.

However, Osborne said: "I can confirm that we will proceed next year with a cap on income tax reliefs for wealthy people, but we won't be capping relief for giving money to charity.

"It is clear from our conversations with charities that any kind of cap could damage donations, and as I said at the Budget that's not what we want at all. So we've listened."

Art Fund director Stephen Deuchar said: "The plan to cap relief on charitable donations would have had a detrimental impact on all charities and their causes.

"In the arts, it would have put at risk building projects, endowment appeals and the quality of public collections which attract millions of visitors each year."

The Give it Back, George campaign attracted more than 1,000 members, including Eureka! The National Children's Museum; The Foundling Museum; and the Museums Association.

Details: www.artfund.org (The Art Fund)

Details: www.giveitbackgeorge.org (Give It Back, George)

Image: Britainonview/Simon Kreitem