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The head of Britain's largest business organisation has claimed the government's tax reform plans have damaged its relationship with industry.

Richard Lambert, director general of the Confederation of British Industry (CBI), reportedly made the comments in one of a series of interviews ahead of the lobby organisation's annual conference next week.

The CBI and other business groups are disgruntled at the chancellor's plans to reform the current capital gains tax regime.

Mr Lambert stressed the proposals, which business groups claim will discourage long-term investment and risk-taking, had caused more controversy among CBI members than any other issue had done for several years.

Meanwhile in a separate interview, the enterprise leader told the Independent newspaper the business vote was "definitely up for grabs" and the matter had caused "terrific unrest" within the business community.

Under proposals announced in the chancellor's pre-Budget speech to parliament last month, different rates of relief for different kinds of investment would be replaced by a single flat-rate of capital gains tax of 18 per cent, with the change set to come into force from April next year.

In a joint letter subsequently sent to Alistair Darling over the issue, the CBI and three other leading business groups claimed the plans would put the government's pro-enterprise agenda "into reverse gear".

However Mr Darling, who has since met with business leaders over their concerns, has previously stressed the move is intended to simplify the tax regime.

The chancellor is due to address the CBI conference on Tuesday, with Mr Darling already facing pressure over his handling of the recent Northern Rock crisis and the revelation that the personal details of 25 million people have been lost by HM Revenue and Customs (HMRC).