Paul Boateng has hit back at CBI claims of a £47 billion hike in business taxes under Labour.

The chief secretary to the Treasury told bosses that Labour had actually cut the tax burden since 1997.

And he accused the CBI of publishing "wrong and misleading" figures to back their case.

The Treasury number two also said that "we make no apologies for investing in public services".

CBI director general Digby Jones had told the chancellor that the burden of tax and over-regulation is slowing the UK economy.

In a submission before Gordon Brown's up-coming pre-Budget report the CBI said that "relentless and damaging" tax and regulation rises are costing companies £15 billion a year.

Writing in Monday's Telegraph, Jones said: "The engine of wealth creation has been over taxed and almost run into the ground - it can take no more."

Economists have predicted that unexpectedly slow growth will undershoot the government's predictions.

These will be revised when the chancellor makes his pre-Budget statement later this month.

This could affect government plans to increase investment in public services unless additional resources can be found through either extra tax or borrowing.

Jones said: "Ministers cannot keep siphoning off company funds without damaging investment, productivity and competitiveness.

"That will reduce the ability of the government to invest in public services - the money will simply not be there".

The CBI paper, "Protecting the UK's Competitive Position in the World", claims that business taxes are now £47 billion higher than 1997.

The increase in employer's national insurance contributions announced in the last Budget form a key plank of Brown's plans to improve NHS funding.

The CBI fears that businesses may be asked to meet part of the fiscal "black hole" predicted if growth does not match the 2.5 per cent that spending plans rely on.

This in turn, they argue, could hit growth further still, predicted by the Treasury to be 3.5 per cent next year.

This "will be seen by many as the ultimate test of the Labour Party's pro-business credentials" says Jones.

Michael Howard, the shadow chancellor, said: "Labour's burdens on business are damaging the economy and storing up problems for our future. Easing those burdens should be a priority for Gordon Brown."