The government has confirmed that it will introduce a new one-in one-out system for any new business regulations.

From next month ministers will have to identify an existing piece of regulation to be removed for every new rule proposed and a panel of business experts will scrutinise all new legislation before it is introduced.

"By ensuring regulation becomes a last resort, we will create an environment that frees business from the burden of red tape, helping to create the right conditions for recovery and growth in the UK economy," said Business Secretary Vince Cable.

It has been claimed that regulations cost UK companies £88bn lasy year. However, the new ruling will only apply to UK laws and will thus not affect EU legislation.