By Mary Gahan BBC News Online business reporter at the CBI conference

Firefighters' demands for a big pay increase have been described as selfish by the leader of the employers' organisation the CBI.

Digby Jones, the director-general, said the government should "definitely, definitely tough it out," in the current dispute with the country's firefighters.

This is a big wake-up call to the government

Digby Jones, CBI director-general

He warned that any substantial pay increase that was not linked to productivity and changes in working practices would damage the UK's economic stability.

His support for the government's stance came as the CBI's annual conference got underway in Manchester.

But at the same time he warned that business was growing more and more frustrated with the way it was being taxed and regulated by government.

'Situation will get worse'

A Mori survey, commissioned by the CBI found that the UK's reputation as a good place to do business was slipping away.

More than half of the executives who were interviewed said they still saw the UK as an attractive place to invest.

But two-thirds said conditions were worse than five years ago.

And 58% said they expected the situation to get worse still.

Business will look abroad

The research also found that an increasing number of company leaders thought the government was becoming less business friendly.

Two-thirds thought it was less friendly to business than five years ago and 60% thought this would get worse.

And 70% said they thought government had only a poor or partial understanding of business.

Mr Jones warned that further tax increases would persuade some businesses to move overseas rather than continue to invest in the UK.

Warning to chancellor

"This is a big wake-up call to the government," the director-general said.

The survey was based on telephone interviews with 256 chairmen, chief executives and other senior directors of UK companies.

The Chancellor Gordon Brown is due to address the conference on Monday and he has been warned by the CBI's director-general to expect a rough ride.

Mr Jones said the chancellor should listen to what businesses were saying and give their views some serious thought.

Both the director-general and the CBI President Sir John Egan agreed that big pay rises for business bosses could send out the wrong message.

"We do expect our members to be sensitive," said Sir John, adding that big rewards were merited only where there was great success.

Anti-war demo

The CBI conference attracted demonstrators for the first time.

Up to 100 anti-war protesters broke past a handful of security men and rushed into the building with placards saying 'No blood for oil'.

A window was broken during the scuffle, but the demonstrators were moved back outside the conference centre.

They said they wanted to highlight the link between big business and war.

Equal pay

Earlier the union Amicus held a protest about attitudes to equal pay.

It wants companies to carry out regular 'equal pay audits' to make sure that women receive equal pay.

But the CBI is against the audits because it argues they would increase the burden on business.