The Government has insisted it will proceed with its plan to put duty stamps on bottles of whisky despite strong opposition from MPs and the distilling industry. In his reply to the all-party Scottish affairs committee at the House of Commons, the Chancellor dismissed claims it could put some small producers out of business.

Gordon Brown conceded, however, that rather than putting them over the top of the bottle, he might be prepared to put them on the back of the bottle or on the label.

This small concession was greeted as "a major step forward" by Campbell Evans, government and consumer affairs director of the Scots Whisky Association.

The committee had called on Brown to reconsider the duty stamps plan, saying it was a "19th century solution to a 21st century problem".

But Brown today said the stamps were a "timely and effective solution" to the £600 m a year growing spirits fraud problem.

In the official Treasury response to the committee report, the Chancellor dismissed claims that the cost of changing bottling lines would be too much for smaller manufacturers and promised government help for those in need. He said the big distillers already had the technology.

The tax stamps are due to come in by 2006.