The British Chambers of Commerce (BCC) and the Chartered Institute of Personnel and Development (CIPD) claim that the hike in NI, which is due to come into effect in April 2011, will cost UK businesses £14bn.

According to the BCC's employment timeline, published on 19 January, the net cost to business of new employment regulations and the increase in NI contributions will be £25.6bn over the next four years.

BCC director of policy Adam Marshall said: "Employers will create jobs and wealth, but the rise in national insurance in 2011 will mean £14bn in extra costs over the next four years. That is little more than a tax on jobs and it must be scrapped."

In addition, CIPD research has revealed that, as a result of the planned 1% increase, 12% of employers intend to recruit fewer staff, while 8% will make job cuts.

CIPD chief economic advisor Dr John Philpott said: "With many employers struggling to contain labour costs this year and next against a likely backdrop of still subdued demand, the planned hike in NI will inevitably cost jobs."

In a joint letter to the business secretary, the two organisations said that the tax rise "will undoubtedly lead to lower overall recruitment levels and could trigger further redundancies".

The letter also urges the government to freeze the youth and development rates of the National Minimum Wage (NMW) in 2010, claiming that the rise in NMW is likely to lead to job losses for young people as the market is saturated with older, more experienced workers.

Philpott said: "While the government is rightly devoting taxpayers' money to helping Britain's 1m jobless young people, it would be absurd at the same time to raise the youth minimum wage."

Marshall added: "The cost of employing people must be reduced if future governments are serious about giving businesses the freedom to create jobs and drive economic recovery."

Publication of the BCC and CIPD letter to Lord Mandelson comes as the latest Office for National Statistics figures revealed that unemployment has fallen for the first time in 18 months.