The Business Rates Supplements Bill has already received a hard time in the Commons (see earlier story) and the amendments were introduced in the House of Lords to introduce an element of control by the levy payers. The Bill will allow local authorities to levy supplementary taxes on companies to pay for infrastructure projects to benefit local economies.

The Confederation of British Industry had backed the amendments making a vote mandatory, saying that extra levies on firms could hurt companies during the recession, but the government has declined to adopt them.

John Cridland, deputy director-general of the CBI, said: "The rejection of these amendments pokes a finger in the eye of British businesses at a difficult time.