A Brighton businessman has slammed a Government trade initiative as an ill thought-out scheme that could cost British jobs.

Brian Owen, managing director of engineering company Precision Products, says a trade mission to the Czech Republic, could result in British manufacturers sourcing products in the low labour-cost economy and dumping traditional UK suppliers.

Mr Owen, who has run his company with his father since 1974 and employs 90 people on three Sussex sites, said the mission was handing over business to firms in eastern Europe.

The row is over a Department of Trade and Industry initiative, Total Package, to take a delegation of UK companies to the region to establish links with engineering firms. This will be preceded by Czech and Slovak firms coming to the UK in the hope of gaining contracts.

Mr Owen said he was invited by the DTI to join the delegation but felt unfavourable exchange rates and higher overheads, including rent and electricity, meant UK firms could not compete with foreign manufacturers and introducing his customers to the Czech manufacturers would damage his business.

He said: "This project could be a disaster for firms like ours. It is using British taxpayer's money to export British jobs. Skilled workers in Eastern Europe are paid £5,000 a year, in this country they pay more than that in income tax.

"I thought the DTI was here to encourage British industry, not to encourage foreign companies to take our customers."

The British Turned Parts Manufacturers' Association is backing Mr Owen and will meet DTI officials shortly. Its spokesman David Norman said the DTI appeared to be encouraging UK suppliers to source turned parts in eastern Europe.

Peter Guy, managing director of metal stamping company Die Tech, asked: "Why is the Government actively working against British manufacturing companies by introducing Czech and Slovak automotive manufacturers as alternative sites for production?"

Foreign-owned British plants were often more likely to face closure in hard times because it was easier and cheaper to make a British worker redundant.

Eddie Thorning, of the Total Package, denied he was suggesting eastern European companies come to the UK to sell their components. He was inviting them to set up partnerships with UK manufacturers.