The prime minister is said to be relaxed and happy with the idea of publishing his tax returns, following the example set last week by Boris Johnson, the mayor of London.
It is understood Cameron and Osborne have agreed that the most senior office holders in the cabinet should make an open declaration after the local elections on 3 May.
Nick Clegg and Vince Cable have indicated they would be happy to publish their tax affairs. It is not clear whether William Hague, who earned a tidy sum as a writer and speaker before the election, would be prepared to follow their example. As foreign secretary, he could be covered by the Cameron-Osborne agreement that the cabinet's most senior office holders should be transparent.
Theresa May, the home secretary, could also be covered.
The prime minister is understood to have discussed the matter with Osborne before the chancellor's remarks in the Daily Telegraph on Saturday in which he indicated that he would be prepared to publish his tax affairs.
Labour called on Osborne to be more transparent after he said last month that he would not be affected personally by the cut in the top rate of income tax from 50p to 45p.
The chancellor said he was a 40p taxpayer in the 2010-11 tax year. But in July last year he started to rent out his London house; this could take him into the higher 50p tax rate, which will not be cut to 45p until 2013.
The Tories are keen to maintain the pressure on Ken Livingstone, who has admitted reducing his tax burden on earnings by setting up a company. The Labour candidate for London mayor has defended his plans on the grounds that he employed three people, including his wife. But government sources have pointed out that Livingstone has been paying tax at around 14.5% of income.
Sources close to Cameron said: "The prime minister is relaxed about the idea of the tax returns of senior cabinet ministers being published – but wants the opportunity to explore how this might work."
Osborne was quoted telling the Telegraph yesterday that he was "shocked" to discover that some of Britain's wealthiest people paid virtually no income tax. The chancellor revealed that HMRC had shown him anonymised tax returns of wealthy individuals who had used what he described in the budget as "morally repugnant" tax avoidance measures.
Osborne said: "I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it's within the tax laws, so that they were regularly paying virtually no income tax. And I don't think that's right."
