Britain's bosses could withdraw support from Labour following Gordon Brown's hike in employers' national insurance contributions, the CBI has warned.

Digby Jones accused the chancellor of "talking an enterprise game.. and yet on a major thing - something that overshadows it all - they are actually going backwards".

The CBI has given notice to Brown that he is now "on approval".

The Institute of Directors has warned that the increased investment in the NHS, announced by Brown in the budget, will not work.

"His Budget and the increased funding for the NHS was, I felt, quite mind blowing. This is gambling on a big scale and surely a gamble that will fail," said policy director Ruth Lea.

Both Lea and the Ernst and Young ITEM Club have warned that taxes will have to rise further to fund increases in public spending.