The future of the controversial Employment Agencies Act is hanging in the balance, according to a DTI spokesman.

The source told Professional Recruiter that employment relations minister Alan Johnson has yet to decide whether to push forward with the regulations in the draft document, or revise them.

The spokesman said that if major changes were made to the Act, then the regulations would be redrafted and ratified during the next parliament.

If ministers opt to make only minor changes to the Act, then it will be laid before parliament before the summer recess later this month.

Although the spokesman would not be drawn as to when ministers would make an announcement, industry sources believe it could be announced this week.

It is also believed that a National Audit Office investigation into the impact of the Act will not alter the regulations, even if they cause upheaval. Earlier reports had hinted that the investigation could overturn the proposals in the document.

Adrian Marlowe of legal consultancy Lawspeed said the investigation was a whitewash: ‘We have checked with the National Audit Office, and they have stated to us that they are doing a study that is not designed to be critical. The issue of concern to us is that it will have no impact on the Act at all.’

Marlowe claimed that Patricia Hewitt’s appointment at the DTI would have no impact on the outcome of the negotiations.

He said: ‘The minister in charge of the EAA before the election was Alan Johnson, and the minister in charge after the election was Alan Johnson.’