Small firms in Sussex have come out strongly against the Government's plans to extend family-friendly work policies.

They see the introduction of new regulations as costly and unreasonable.

Business organisation Yell said the policy could cost firms in the UK as much as £130 a year.

More than half of small firms said giving working fathers the statutory right to two weeks' paid paternity leave from April 2003 would damage their business.

It would place an extra financial burden on them in the planning, management and administrative cost of compliance.

Fifty-seven per cent said the decision to extend paid maternity leave from 18 to 26 weeks would have a similar damaging effect.

Government figures estimate the cost to business in covering paternity would be at least £42 million. In addition, extended maternity leave would cost £10 million a year, plus a further £10 million in one-off costs.

Most firms in Sussex believed extending unpaid maternity leave by three months, allowing mothers to stay home for up to a year after the birth of a baby, would put unnecessary pressures and costs on already- stretched business.

The increase in statutory maternity allowance, from £60.20 to £100 a week would have a negative effect on business.

The increase will be introduced in two stages, a rise from £60.20 to £75 per week from next April and to £100 per week from April 2003.

The absence of staff and the difficulties of arranging cover when needed were quoted as major business drawbacks. The majority of firms regarded the management of maternity cover as a moderate to substantial cost. The Department of Trade and Industry estimates the cost to business from covering long-term absence with temporary recruitment at £77 million.

John Condron, chief executive of Yell, said: "We are committed to supporting small businesses and research of this kind helps identify issues that affect their success.

"Our research clearly demonstrates how small businesses are concerned about the rising financial and administrative costs of supporting working parents and the potential damage this could do."

The British Chamber of Commerce is pressing the Government to take greater account of the impact of new regulation small firms.

Head of policy Ian Fletcher said: "This research amplifies our own studies, which have shown small firms are already working closely with employees to offer the flexibility and commitment needed to improve the work-

family life balance.

"Regulating small companies in this area is a classic case of using a sledgehammer to crack a nut."