(Reuters) - President Barack Obama pledged on Tuesday to veto a deal still under negotiation in Congress that would make several expiring business tax breaks permanent.

The warning marks a major setback to House and Senate negotiators who were trying to reach a deal on so-called "tax extender" breaks worth some $440 billion over 10 years.

"The President would veto the proposed deal because it would provide permanent tax breaks to help well-connected corporations while neglecting working families," White House spokeswoman Jennifer Friedman said in a statement.

Senate Democratic leader Harry Reid is trying to work out the best possible deal before Republicans take control of the Senate next year. The plan nearing completion would have made permanent research and development tax credits and other breaks for businesses while leaving out a permanent expansion of earned income and child tax credits for the working poor.

Treasury Secretary Jack Lew also criticized the deal, saying on Monday that "(making) permanent expiring business provisions without addressing tax credits for working families is the wrong approach."

A spokesman for Reid declined to comment on Obama's veto threat.