Government regulations due out today could severely limit the ability of recruitment agencies to charge temp to perm fees.

The employment law firm Tarlo Lyons has warned that the rules on the conduct of employment agencies could affect the fees, which clients pay to agencies if they want to offer a temp full time employment.

A spokesman added: "It remains top be seen whether all the problems identified by us in previous briefings have been resolved.

"In particular we are very interested in seeing whether they will apply to workers supplying services via personal service companies or umbrella companies."

The latest draft of the regulations is due to be laid before Parliament today.