The European Parliament's decision to scrap the opt-out clause on the Working Time Directive has been universally slammed by the recruitment industry.

Now UK businesses are worried that the government will drop its opposition to the European Agency Workers Directive in return for Britain retaining its working time opt-out clause.

UK recruitment trade body the REC has urged the government to stand firm against the proposed directive, which calls for equal pay and conditions for temps.

The working time changes are not yet law, as they must be approved by the European Union's Council of Ministers.

If the legislation is passed, individuals would no longer have the choice to opt out of working a 48-hour maximum week, which would heavily affect industries such as construction and hospitality.

The directive also guarantees workers 11 hours of rest per day and regular breaks, a minimum annual holiday of four weeks and limited night working.

Chris Herrmannsen, managing director of The Hotgroup's consulting division, said the impact of the new laws may have been overhyped.

Britain losing the opt-out of the working time directive will simply mean that employers could not force employees to work more than 48 hours a week, but staff could still have the option of working longer hours if they so choose.

He added: "This is another example of how continental Europe is a great place for a holiday but a lousy place to do business."

Recruitment firm Huntress IT aired its opposition to the decision to 3m French TV viewers.

Steven Stott, European contracts director, told channel France2: "Many large IT projects demand extensive working hours at key stages.

"Reducing this flexibility would affect companies in their ability to compete on a global stage."

Miles Templeman, director general of the Institute of Directors (IoD), believes that the decision could have a dramatic effect on the UK's competitiveness.

He said: "Business is trying to face up to the problems of the 21st century, but MEPs have voted for a policy straight out of the 1970s."

The British Retail Consortium is also concerned the decision could affect the retail sector's competitiveness and productivity.