Business leaders have warned Alistair Darling that a new levy could be abused by councils as a way to fill the “financial void” in their coffers. Financial Times

Local authorities will from 2010 be able to levy a supplementary business rate to go towards specific infrastructure projects.

In a letter to the chancellor, four groups have called for further safeguards to prevent “widespread abuse of the extensive powers” being given to councils.

If not, “our energies will be channelled into overturning this deeply damaging policy”, say the Institute of Directors, British Chambers of Commerce, Federation of Small Businesses and British Retail Consortium