Launched in 2008, the HM Revenue & Customs (HMRC) scheme meant that small businesses hit by the recession could defer payments to HMRC. It is said to have helped 200,000 businesses ease their cashflow issues.

However, if the scheme is not preserved, it could mean that thousands of SMEs struggling to manage tax payments may close, the FPB has warned.

HMRC has already tightened its control of the scheme in order to reduce the losses incurred by the Treasury as a result of administration.

In April, it introduced an Independent Business Review for all requests to defer an amount greater than £1m.

Jane Bennett, FPB head of campaigns, said the Business Payment Support Scheme remained "a real lifeline" for many small companies struggling with cashflow and claimed this would be the case for some time.

She said: "Now is not the time for it to go. Re-balancing the economy is clearly a major priority but sacrificing genuine support like this will only jeopardise small businesses and hinder sustained recovery.

"The message is clear – it is important to preserve Time to Pay and other viable small business support schemes in the Budget."

In a poll last year, the scheme was voted the most popular of all the government's business support programmes.

Tomorrow's Budget is expected to include a range of tax and public spending measures to tackle the record deficit.

The FPB is a not-for-profit organisation that aims to help its members run their businesses more profitably.