Companies will be forced by law to disclose how much they pay men compared with women in a surprise government move to narrow the pay gap.

Compulsory “gender pay audits” will seek to shame employers who routinely pay women less, and spur more women to demand pay rises.

The measure, to be announced on Monday in the Equalities Bill, comes almost 40 years after the first Equal Pay Act became law. That has failed to close the divide, which still stands at 17.1 per cent.

Last night business leaders said that they were shocked to learn that the idea would be included in the Bill.They had been reassured that they would face no new regulations during the recession so they could focus on retaining staff and preparing for the recovery.

“On Wednesday the Chancellor positioned business at the heart of the economic recovery in the Budget and said all actions were to help to reinforce that position,” said David Frost, director-general of the British Chambers of Commerce.

“Yet 24 hours later they are announcing that they are to be burdened with a requirement to carry out gender pay audits. Clearly some sections of this Government just don’t get it, that business is critical to the recovery.”

Mr Frost added that, alongside the new 50 per cent tax rate for high earners, pay audits would make overseas investors think twice about coming to the UK.

The new law will apply to companies with 250 or more staff, who will be given until 2013 to comply. After that they will face civil or criminal prosecution. It will also apply to public sector bodies with 150 staff or more.

Ministers would like to see a simple comparison of average hourly earnings of men and women, across the whole company, published in the annual report. They have asked the Equality and Human Rights Commission to draw up a formula with the CBI and the TUC this summer which may allow for some room for grade differentiation. But they have made clear that bonuses will have to be included, not just salaries. Recent research from the commission found that city bonuses paid to women were 79 per cent lower than those paid to men.

Ministers behind the Bill, including Harriet Harman, the Equalities Minister, believe that pay audits will shift the onus on to companies to show that they are being fair to their female staff, rather than leave it to individual women to take their employer to a tribunal for discrimination.

The new law will also ban secrecy clauses that prevent colleagues comparing their salaries. Almost a quarter of companies have these.

The pay gap between men and women fell from 21 per cent in 1997, largely thanks to the introduction of the minimum wage. However, progress has stalled and in the private sector the gap has started to widen again, currently standing at 22 per cent.

Although ministers recognise that career choices made by women, who often still favour low-paid professions, account for part of the pay difference, they believe that companies are still paying men more than women for similar work, in the belief that that no one will discuss their salary level so they will not be caught breaking the law.

Last year 44,000 equal pay claims were brought before the courts, more than double the number in 2005.

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