Businesses in Wales will be devastated by any return to a localised business rate, according to CBI Wales director David Rosser.

Commenting on the release of local government reform proposals by the National Assembly, Mr Rosser said: "It cannot have escaped anyone's notice that business in Wales is facing some extremely challenging trading conditions.

"I have been impressed by the response of Welsh business to the challenges but they must be supported. This is not the time to be bringing forward proposals which would remove certainty in terms of companies' fixed costs."

He said localisation has already been abandoned in England and Scotland, and its imposition here would be a huge blow to Welsh competitiveness and a bar to attracting inward investment. Wales must not be put at such a disadvantage.

"The Assembly must see that greater enterprise and job creation are crucial to the success of local economies and will be jeopardised by increasing tax uncertainty for businesses," he said. "It will have a damaging effect on jobs and wealth creation in Wales.

"This measure sends out a negative message about what the government in Wales thinks of business and understands about its needs. If the Assembly insists on pressing ahead with this, it risks undoing much of the good work it is doing in other areas of business support and enterprise development.

"We would support the other option outlined in this consultation for Welsh-styled business improvement districts. We believe these can create genuine partnerships between local government and business and deliver genuine benefit to local communities. This must be the way forward."