There are growing fears that the Enterprise Investment Scheme is in danger of withering from a lack of interest. Experts say the scheme is being used less and less by smaller company investors or business angels because it is so punitive and complex.

Officials at the CBI are due to make representations to Prime Minister Tony Blair and to the Inland Revenue to argue that the original purpose of the tax relief introduced by the EIS to help foster new start-ups and new companies, particularly in the much-vaunted hi-tech sector businesses, is not being met.