Manufacturing firms are facing a £100 million extra burden because of the Government's

climate change levy.

The Engineering Employers' Federation (EEF) said companies already in recession were bearing a disproportionate amount of the levy, which was brought in earlier this year with the aim of reducing carbon dioxide emissions.

The EEF has put forward alternative proposals to try to lessen the impact and achieve even greater cuts in emissions.

A survey of 550 engineering firms identified the cost burden.

EEF director general Martin Temple said: "Our figures prove the Government was wrong in saying the levy would not impact on competitiveness because it is imposing an ever-greater burden on manufacturing at a time when it is already in recession."

The EEF called for the levy to be scaled down and all the revenue to be spent on increased incentives to invest in energy-saving equipment.

Mr Temple said: "Our alternative proposals give the Government a win-win situation by achieving a balance between reducing carbon emissions and promoting growth in employment and output."

CBI director general Digby Jones said: "This survey backs up official findings earlier in the summer indicating that the levy was putting major pressure on the viability of manufacturing and agricultural businesses.

"The Government should be thinking more actively about making it easier, not harder, for them to compete.

"The climate change levy is fast becoming a tax on jobs at precisely the time when Government should be doing everything it can to keep people in work."