Trade and industry secretary, Patricia Hewitt, has bowed to trade union pressure and performed a U-turn on the composition of a new advisory board guiding DTI strategy.

The DTI initially indicated that the three non-executive directors on the strategy board would all come from business, prompting fury from unions and consumer organisations, who said it amounted to a business takeover of government.

Hewitt told the House of Commons trade and industry select committee that she had always intended to offer places on the new board to representatives of the unions, consumer groups and non-profit organisations.

But, Roger Berry, a Labour committee member, said that if union involvement in the board had been envisaged from the start then the department must have been responsible for a "major breakdown in communication".

Hewitt acknowledged that she had not mentioned her intention to offer places on the board to the TUC in conversations with John Monks.

"I think he is now much more reassured and accepts that the TUC and individual trade unions will be invited to nominate individuals who they think will make a useful contribution," she said.

However, the TUC is far from satisfied with the trade and industry's secretary's new proposals.

"Putting a few trade unionists, or consumer group directors on a new board, is no substitute for our political leaders developing proper partnership approaches with all interest groups and being accountable to parliament," a spokesman said. "We do not want to see outside directors focusing on strategy."