More than 1,700 jobs could be lost costing the economy £38.7 million because of a shortage of office space.

Sussex Enterprise, the largest organisation that represents and helps businesses in Sussex, has predicted the whole of the country will suffer but has singled out Mid Sussex as one of the worst affected areas, with 40 per cent of all job opportunities expected to be lost across Sussex arising in the district.

The forecast comes as a result of a report commissioned by Sussex Enterprise predicting the consequences of low investment in sites and premises.

Research found 20 per cent of the county's businesses felt inadequate premises were preventing them from expanding.

Chief Executive Ken Caldwell said "Our members employ over half the working population of Sussex between them and they will be wishing for a New Year with no new employment legislation and no new unnecessary government red tape.

"Following our report, which identified a potential shortfall of 90,000sqm of office space over the next five years, we would like all the local councils in Sussex to take a fresh look at their maps and see if they can find some new space for business development.

"We need to keep growing businesses in Sussex and attract new investment into our area."

Mr Caldwell said they would be looking at the Government's study into transport links along the South Coast and called for a transport system to meet the modern day needs of businesses in Mid Sussex. He also emphasised the importance of Gatwick, which has been struggling since September 11.

Bill Hatton, chief executive of Mid Sussex District Council said he was keen to discuss the problem with Sussex Enterprise.

He said the council had to match the needs of the business community with planning constraints and strike a balance.

He added the last thing he wanted was for jobs to be lost in Mid Sussex.