Digby Jones is to serve an additional two years as director general of the CBI.

The business body announced that Jones is to extend his five year contract - which was set to expire at the end of next year.

Insiders say the move is a result of "strong demand" from member companies.

The CBI's president, Sir John Egan, said: "No-one fights business' corner more energetically and effectively than Digby Jones.

"Over the last four years he has tirelessly argued the case for businesses large and small, from every sector, in every part of the UK and wherever they operate in Europe and around the world.

"I am delighted that he has agreed to continue this work for a further two years."

Jones, one of the most combative and highly regarded holders of his post, said he was pleased to be able to "go on batting for business".

"I passionately believe business is a cornerstone of all our lives. Socially-inclusive wealth creation is vital to everyone," he said.

"The middle years of this decade will be a crucial time for UK business. There are some major political and business issues on the horizon and I am looking forward to seeing the CBI through these interesting times.

"We must make sure every day that the CBI is relevant to its members, wherever they operate and whatever they do, and that it remains the leading champion for UK business."