Small and medium-sized businesses have been warned that draft legislation has been passed by the European Parliament to extend maternity leave across Europe to 20 weeks on full pay.

Under the current European rules women receive 14 weeks leave fully paid. In the UK, women get a year off, with the first six weeks on 90% pay, followed by 33 weeks on Statutory Maternity Pay. The rest is unpaid. If the new law makes it through the European Parliament it could be active within 18 months.

"We already have a generous system which is better than many European Union countries and works well, balancing the needs of businesses and workers," said Dr Adam Marshall of the British Chambers of Commerce.

"A substantial increase in maternity leave paid at full or near-full pay risks undermining this delicate balance at a time when economies across the EU can least afford it."