But while some consumers on the streets said they had waited for the cut to take effect before going to the shops, others felt the move made little difference.

Buchanan Galleries in Glasgow was unusually busy for a Monday lunchtime. Margaret O'Neil, 51, said she had held off until yesterday to capitalise on the reduction. "I was planning to buy my sister a dress for Christmas, and I'm happy with the saving I made," she said.

"I've usually started my Christmas shopping by now, but I'm only beginning. It makes sense – the VAT means you're saving money, and a lot of shops are competing for customers."

Fiona Miller, a student, said she had also set aside her money for yesterday. "I waited until this morning to order a few main Christmas presents online," she said. "I got a couple of Nintendo Wii games, which I saved a good bit on, so I'm happy."

At Gap, an assistant reported a busy weekend and brisk shopping again yesterday: "We're hoping this week will be one of our busiest this year", she said.

However, other shoppers seemed less than enthused by the VAT savings.

"It only works out at something like a 2 per cent saving. That's not the kind of discount that would make me buy something I was sitting on the fence about," said Joanne McEwan, a care home assistant.

Billy McLachlan, a self-employed glazer, agreed: "I'm looking out for the big money-off deals like the Marks & Spencer discount day that gave you 20 per cent off," he said. "I think the savings have to be big to encourage you to go out and spend, and I don't think the VAT reduction will make that much of a difference to people. It's not the kind of thing that's advertised, and you won't really notice the discounts."

In Edinburgh, thousands of shoppers packed Princes Street looking for bargains. Claire Bridge, 34, a mother of two, normally starts her Christmas shopping weeks in advance but this year held back.

She said: "I know it's only a little bit off, but at the moment even a small amount can help in the run-up to Christmas.

"I was hoping the government would reduce VAT by at least 5 per cent, but at least this is something."

Jane Chalmers, 67, said the reduction was much needed for older people. She said: "I was out shopping for Christmas presents for my grandchildren on the weekend and it is nice that most of the big shops have already made the reduction available.

"At the moment everyone is tightening their belts, especially with increased heating bills, and it's nice to be able to save some money."

Many of the department stores have been introducing the discounts early in anticipation of the VAT cut and they said that the reduction had brought in the crowds.

A John Lewis worker said: "We were really busy on the weekend, busier than we normally would have been at this time of year. We brought our discount in before 1 December and shoppers have really been taking notice. We are busier because of it."

An assistant in Jenners said: "We are getting people coming in asking if the reduction is available. When they find out it is, people seem happier to buy more."

On the Royal Mile, notices advertising the reduction feature prominently among the tinsel and Christmas trees in shop windows.

"We started the discount last week and on the weekend we were really busy," said Historic Connections shop assistant Yvonne Mann. "People are seeing the sign and coming in."

She added: "It's good that the reduction has arrived. Unless you are spending hundreds of pounds, customers won't make huge savings immediately, but in the long run this will be felt."

THE store's owner, Gordon Young, said: "We certainly had a better weekend than we usually do, so yes the reduction is helping us. We wanted to bring it in early and advertise it and it seems to have worked."

But some shoppers were critical of the cut. John Bain, 45, said: "The cut in VAT is far too small to make any significant reduction in cost for the consumer."

In Inverness, shopping areas seemed busier than normal for a Monday.

Savings of between 20 per cent and 75 per cent were being offered, mainly by clothes stores, but shoppers also seemed to be flocking to bookshops and CD and DVD outlets for festive gifts. A spokeswoman for the Eastgate Shopping Centre said: "Generally it's been busy."

Fiona Clark saved 27p on a £12.50 jar of face cream thanks to the VAT cut. "I suppose it's better than nothing, but it's not going to encourage me to spend that much", she said.

Isobel Duncan said shoppers would largely ignore the recession for Christmas: "Many people will be thinking about cutting back, but as it gets nearer Christmas they will start to spend and then try to cut back afterwards."

• Additional reporting by John Ross and Ben Bailey

So what's everyone buying? The top presents so far this season

AMONG the fastest-selling products available from John Lewis yesterday were recycled umbrellas, Top Gear games and reindeer candleholders.

The top gift this Christmas is the Molton Brown Supreme gift set, which sold more than one a minute, last week.

Nationally, John Lewis sold enough artificial Christmas trees to fill two and a half acres.

The shop also saw a rise of more than 300 per cent in the sales of women's Ugg boots. Meanwhile, sales of Radley recycled umbrellas, made from plastic bottles, have risen 70 per cent this year.