Business leaders have called for £2 billion of tax cuts in next month's Budget in a move to encourage firms to invest more.

The Confederation of British Industry said it believed the Government could afford to pump extra money into the economy in the months before the expected General Election.

Cutting the business tax burden should be Chancellor Gordon Brown's top priority, said the CBI.

The confederation's director general, Digby Jones, said: "Manufacturing investment is particularly weak and that could hold back improvements in productivity and economic growth.

"But it is also imperative that Mr Brown does nothing to harm macro-economic stability.

"While tax cuts of more than £2 billion are clearly affordable, in my judgement they would not be advisable."

The CBI said more firms should be allowed to negotiate discounts on the forthcoming climate change levy.

The business group also argued in its Budget submission that modest tax reductions and further cuts in interest rates were the best ways of responding to fears of a global economic slowdown.