Business leaders have urged the Government to do more to help stem the tide of job losses, including a scheme aimed at providing an alternative to redundancy.

The CBI warned that unemployment will rise to 3.03 million by next summer unless action was taken now to save jobs and businesses.

The group complained that levels of employment regulation had reached a "tipping point", having added £70 billion to business costs since 1998, shortly after Labour came to power.

An "alternative to redundancy" scheme should be adopted by the Government, under which workers would be paid an allowance twice the rate of Jobseekers Allowance, for six months if they were laid off, financed jointly by the Government and employers, said the CBI.

Ministers were also urged to review the current 90 day consultation where 100 or more employees face redundancy because it "prolonged uncertainty" for staff.

The CBI report, published with engineering firm Siemens, voiced concern about the increase in unemployment among young people, especially 16- to 18-year-olds not in education, employment or training.

John Cridland, deputy director general of the CBI said: "The worst of the recession may be over, but businesses still face a long convalescence and the dole queues will continue to grow. The alternative to redundancy scheme could save jobs by giving businesses more leeway as the economy recovers.

"We considered various forms of wage subsidy and support for short-time working, but this approach is better. Businesses will be more able to cope with sharp drops in demand and prepare for recovery, while workers benefit from improved financial support and a door that is kept open for six months.

"This is not about businesses ducking their redundancy responsibility - in fact if a scheme runs for six months and a redundancy is still made then the business will end up paying more.

"Businesses also feel that the sheer volume of workplace legislation in the UK has reached a tipping point. The costs of new regulations are almost equal to a quarter of a million jobs."

• 

  Lenny Henry: 'Maybe one day we can have a black Doctor Who'

  As he wins the outstanding newcomer prize at the Evening Standard theatre awards for his role as Othello, Lenny Henry has come a long way from black and white minstrels

  ---

• 

  Spread of the Jedhead

  Jedward, voted off the X-Factor this weekend, are the most obvious proponents of the sticky-uppy look - but the style crosses boundaries of age, gender, sexuality and taste, says Nick Curtis

  ---

Sky in plot to hire students on the cheap

Sky News is currently recruiting students as reporters for its coverage of next year's general election. However, the opportunity doesn't quite seem so appealing

All stories