Nearly 100,000 small traders facing huge hikes in business rates will be given discounts worth up to £1,500 each under plans being considered by ministers ahead of the Budget next week.
Sajid Javid, the Local Government Secretary, is examining proposals for a £150million fund to give relief to small businesses that are facing hikes of up to 400 per cent from next month.
Philip Hammond, the Chancellor, has pledged to provide businesses with extra support in his Budget after a furious backlash by Conservative MPs in the South East of England.
On Wednesday CVS, a ratings agency, presented Mr Javid with a series of options for to help businesses including the revival of a "retail relief scheme" to limit the impact of price hikes.
Under scheme, which was previously used by George Osborne in 2013, small businesses were given discounts of up to £1,500 on their rates.
Ministers are also considering alternative plans to raise the maximum level at which business rate relief applies, which would enable more companies to benefit from discounts.
Mark Rigby, chief executive of CVS, said: “The Secretary of State was clearly inlistening mode and it was evident to me that he was acutely aware of the potential impact that the revaluation will bring to some communities and the anger felt by small businesses, particularly the retail and leisure sectors.
“He was clear in his determination to find a meaningful, targeted solution to ease the financial burden for those most in need ahead of the April tax changes.”
The Telegraph also understands that Mr Javid is also prepared to abandon controversial plans to bar companies from appealing even when they can prove that they are being charged too much.
The plans led to 13 trade bodies - including the CBI, the British Chambers of Commerce and the British Property Federation - to warn that they are illegal.
The Government has proposed new powers which would see appeals thrown out if they are within "the bounds of reasonable professional judgment", meaning the challenge would not even be considered.
Experts have suggested that the new law could see appeals thrown out if there is a margin of error of up to 15 per cent. Mr Javid is now prepared to abandon the clause entirely.
The revaluation in April, which represents the first for seven years, will lead to companies paying rates which have been calculated to take into account the rise in property prices since 2008. It means many businesses in the South East will face soaring rates while others in areas where High Street rental prices have fallen will benefit.