The head of the CBI has warned ministers they are making it tougher for British manufacturers to compete with their international rivals.

Digby Jones was set to detail his concerns during an address to the CBI's annual manufacturing dinner in Birmingham, which is being attended by some 900 business leaders, politicians and trade unionists.

However, the business chief is also set to accept that company bosses also have to accept responsibility for meeting the challenges of the international marketplace.

"Business is striving to modernise Britain's manufacturing base and recognises it must do more," he was expected to say.

"But it is not being helped by some government decisions which are adding to costs, increasing burdens and introducing more regulations when we in business are least able to absorb them. In fact, sometimes ministers are making a tough life tougher."

Marking the event, the CBI was publishing a report that concludes much of the recent decline in manufacturing has been caused by global restructuring and compounded by the strong pound.

But the report highlights government failures in red tape, business taxation and failure to improve transport.

The manufacturing sector has declined from about 21 per cent of GDP in 1997 to 17 per cent now - a rate of decline faster than in Germany, France and the US.

"The UK is successful with high value-added goods but that could be undermined," Jones will say.

To tackle the problems, the CBI has urged the government to publish a detailed critique of progress on its manufacturing strategy, with an action plan on priorities for the next 12 months.

And the organisation also urges firms to invest in technology, capital stock, research and development, innovation, marketing, skills and design.