The CBI said the cumulative tax bill faced by firms was on track to hit �54bn by 2005/06.

That means the total annual levy on businesses will be some �7.6bn higher in 2006 than it was when the Labour government first took office in 1997.

CBI director-general Digby Jones said: "The UK is not as good as it thinks it is on tax competitiveness, and it's certainly not as good as it should be."

According to CBI calculations, the UK's business taxes, including taxes on profits, employers' National Insurance contributions, and business rates accounted for 9.9% of gross domestic product (GDP).

Business alarm

That was on a par with Germany at 10.1% and the Netherlands at 9.7%, but above America's 7.3% and Ireland's 7.2%.

Only France was significantly worse at 14.4%.

Mr Jones added: "This report illustrates why so many business leaders are increasingly alarmed by the worsening situation and why the Government's indifference is so frustrating.

"These are the people who make the decisions about where to put investment or whether to move to a more competitive tax environment."

There's no doubt [the tax burden] has gone up for business under this Government. CBI chief Digby Jones

The group said that other business taxes and tax-related costs were also increasing, with stamp duty and environmental levies tripling as a share of GDP since 1995.

Higher pension costs had also exacerbated the firm's tax burden, the CBI added.

Shadow Chancellor Michael Howard backed the CBI's findings.

"This is more evidence that this Government is taxing, spending and failing," he said.

"This makes it incredibly hard for British businesses to win orders and create jobs."

"Our competitive advantage over the rest of Europe has been undermined and it is little wonder that business investment fell more sharply last year than it has over a decade."

Figures 'obsolete'

The latest CBI attack on the government's tax record comes ahead of Chancellor Gordon Brown's pre-budget report, expected in December, which will outline tax and spending priorities for the next financial year.

But the Treasury rejected the CBI's allegations, saying its estimate of business taxes as a proportion of GDP was three years out of date.

It said business taxes now accounted for just 8.9% of GDP - well below the UK's main competitors.

A spokesman said: "Even on their own figures, the business tax take as a proportion of GDP is lower now than in the mid-1990s.

"And in the last three years, their own figures show that the business tax take has been falling not rising."