Sir Terry Leahy, Tesco's chief executive, urged the Government yesterday to cut business rates, reduce red tape and secure an urgent reduction in wholesale energy costs to help British businesses to survive the economic downturn.

In a rare public push for change, Sir Terry said that while he welcomed last week's “brave” cut in interest rates, Gordon Brown had to do more. “Make no mistake, we are all facing considerable challenge in the months ahead as we batten down the hatches,” he said.

“We need government to be on the side of all business - small and large - so that we can continue to create jobs and invest. People have tended to focus on small business. That's understandable, they are very importan, but significant investment and thousands of jobs depend on helping businesses of all sizes and kinds in the economy.”

Sir Terry's call came as industry figures showed that Tesco had suffered the slowest sales growth of the Big Four supermarkets of late, despite the high-profile launch of a new discount range. TNS, the market research specialist, said that sales at Tesco had risen by 4.2 per cent in the four weeks to November 2, compared with 6 per cent at

J Sainsbury, 8.2 per cent at Wm Morrison and 9.2 per cent at Asda. Marks & Spencer suffered a 6.7per cent fall. Sales growth at Aldi, the discounter, was 27.5 per cent.

Ed Garner, director of research at TNS Worldpanel, said: “Retailers with a strong price positioning are continuing to benefit, whereas the premium end of the market is clearly under increasing pressure.”

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