Gordon Brown has been told by Britain’s leading business lobby not to weaken the standing of the DTI in the Whitehall overhaul that is expected in the next few days as the new prime minister takes control.

The CBI is concerned about speculation that the DTI could be downgraded by the loss of some its responsibilities – although plans to dismantle the department are understood to be on the backburner.

John Cridland, deputy director-general of the CBI, said: “While CBI members aren’t fussed about the name on the brass plaque, they do regard a strong and distinct Cabinet champion for business as nonnegotiable.”

Under proposals prepared for Mr Brown, the DTI’s energy remit would be combined with the environmental brief of Defra, beefing up the Department for Environment, Food and Rural Affairs or creating a new Ministry of Energy.

Mr Cridland said that the department in charge of energy must have competitiveness as its core focus: “Simply breaking the DTI up and scattering its fragments across Whitehall would not serve the long-term interests of the economy.”

An early draft of the proposals suggested that the DTI could be further broken up, with the department’s science remit, which includes the promotion of innovation and sharing of knowledge, taken on by the Department for Education and Skills. UK Trade and Investment, the branch of the DTI responsible for investment by British companies abroad and overseas companies in the UK, could be folded into the Foreign and Commonwealth Office, while regional economic development activities could be handled by regional development agencies.

However, it is thought that Mr Brown’s camp has moved away from these proposals and there is an expectation that the DTI will be reinvented, covering enterprise and science, and possibly financial services, if Ed Balls, the new prime minister’s protégé, is given the job of running the department.

Peter Luff, the Labour chairman of the Trade and Industry Select Committee, said he believed that it was more likely that the DTI would remain a significant force in Whitehall, rather than being seriously downgraded.

Conservative policy is to retain the DTI, in the belief that Whitehall needs a business lobby group – a point that Mr Brown is not thought to have found convincing.

“It would be lunacy to abolish the DTI. You need a voice of business in Whitehall,” Alan Duncan, the Shadow Trade, Industry and Energy Secretary, said.

Susan Kramer, the Liberal Democrats’ trade and industry spokeswoman, said that the separation of energy and environment briefs was one of the reasons that the UK has been slow to deliver renewable energy capacity. “This constant overlap is incredibly inefficient . . . We think it’s a department we could do without,” she said.

Combining responsibility for energy and environment would also prove unpopular among some energy producers, who fear that a concentration on environmental needs could overshadow the economic importance of the industry in “keeping the lights on”.

Proposals

Breaking up the DTI: where the parts could go

Energy: Expected to be combined with the environment brief of Defra (Environment, Food and Rural Affairs) to form a Minstry of Energy

Science and innovation: Likely to form core of the new department, focused on science and enterprise, under latest thinking

Trade and investment: Move to Foreign and Commonwealth Office drawn up, but now likely to be central to the recast ministry

Regional Economic Development: Proposal to split off and combine with the separate regional development agencies, but no longer expected

Small Business Service: Had been earmarked for outsourcing, now not thought likely

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