Gordon Brown used a speech to the CBI annual conference yesterday to reject business claims that the government is anti-enterprise.

The chancellor said he wanted to create a "new consensus" uniting the poorest and richest communities around a "strong belief in the enterprise culture".

CBI chief Sir John Egan warned Britain's bosses that they must repair "the reputation of business" or face more regulation and higher taxes.

"Without public trust we will be vulnerable to even more heavy handed regulation, even greater political interference and even higher taxation," he said.

Brown also signalled that he is ready to increase government borrowing to maintain public spending by insisting that higher borrowing is preferable to "short-termist" tax increases or spending cuts.

The move follows a downturn in the global economy, which Brown described as the "first simultaneous world slowdown for almost 30 years".

US Treasury chief, Paul O'Neill, departed from a traditionally neutral stance to back Brown.

He told the FT: "When I look at all the editorial pages and see the attacks on Gordon Brown it makes me wonder what it is that people want? What is that all about? It appears to me that the prime minister and Gordon are doing a good job."

Also speaking to the CBI, trade and industry secretary Patricia Hewitt admitted that Brussels and Whitehall inspired red tape was a "real problem" for business.