Oliver Letwin, the Conservative Party's treasury spokesman, is considering plans to shake up the inheritance tax system.
The proposals, which could form a key part of the Tories' tax cutting manifesto, would see the threshold for inheritance tax raised from its current level of £263,000.
Under a future Conservative government the threshold could be increased to as much as £1 million.
Mr Letwin claims that the current arrangements hit thousands of hard working families.
"Inheritance tax has become plain unfair," he said. "Once only the very rich paid it, but under Gordon Brown it is hitting ordinary families all over Britain."
Tory figures claim that two and a half million houses with six million people living in them are potentially liable to inheritance tax under the present arrangements.
The Conservatives are likely to make tax a key issue of the next general election.
© DeHavilland Information Services plc