Business Secretary John Hutton is to push for an exemption of small firms employing less than 20 people from future European legislation in a bid to reduce red tape from Brussels.

Hutton will ask the European Parliament for the exemption to be written into the European Small Business Act, which is currently being drafted.

Hutton is expected to argue that where an exemption is not possible, small companies will be permitted to take a "tailor made" approach to implementing the rules, including simpler enforcement and more effective guidance.

His proposals were included in a letter to Gunter Verheugen, EU enterprise commissioner, who will publish a proposed legal framework to help small firms this year.