The federation's comments came as Philip Hampton, who was appointed by Chancellor Gordon Brown to find ways of streamlining government authorities, launched a survey of British companies on how to reduce regulation and inspection in business.

Hampton, who is a former finance director of Lloyds TSB, BT and British Gas, said: "We're going to be finding out what businesses are concerned about and what possibilities for change there will be."

Laura Jackson, public affairs officer for BPIF, said the main concern for the industry was not in red tape aiming to improve business but in the support offered to companies to deal with it.

Jackson said: "The government should be encouraged to harness support provided by organisations such as ourselves or encourage people to go to their Business Links and ask for help.

"If you're a small to medium enterprise you don't have time to monitor exactly what legislation you're supposed to be taking note of. If SMEs could be encouraged to incorporate it into their daily business routines rather than struggle with the burden, that would be ideal."

Story by Josh Brooks