Business leaders claimed signs of movement but failed to secure a U-turn as they showed up in force to urge Alistair Darling to change his controversial plans on capital gains tax yesterday.

The heads of the main business organisations were positive after their hour-long encounter with the Chancellor, despite his insistence that he would not back down on his plan to simplify capital gains tax with a single rate at 18 per cent. Mr Darling appeared to have placated them by suggesting that although he could not drop a proposal that was central to his Pre-Budget Report, he would consider plans to boost enterprise by making other changes to the tax system.

Treasury sources said that the Chancellor would not alter his plan to end taper relief, under which assets held for more than two years are taxed at only 10 per cent on sale. But the business leaders came away with the firm belief that their message that he was damaging small firms had hit home, and that they expect measures from Mr Darling to alleviate their concerns.

Richard Lambert, the Director-General of the CBI, said: “Mr Darling said he would be happy to work with the four business groups to develop measures to stimulate enterprise in the UK, and that he would listen to the group’s proposals for a way forward on capital gains tax.

“We believe the pre-Budget proposals represent a significant step in the wrong direction for the UK economy, and we will continue to press the case for them to be changed. As things stand, they will hold back vital investment in businesses of all sizes and send out totally the wrong message about the Government’s attitude to enterprise.”

Business groups had reacted with fury to Mr Darling’s Pre-Budget Report this month. While some people such as stock speculators and buy-to-let investors will have their tax cut from 40 per cent to 18 per cent, those who have held business assets for many years are facing a tough choice between selling up before April or facing an increase in their bill of up to 80 per cent.

George Osborne, the Shadow Chancellor, said: “It’s time Alistair Darling faced up to the fact that his PBR was badly thought-through, and was damaging to business.”

Andy Burnham, the Chief Secretary to the Treasury, said: “Rates of capital gains tax in 1997 were considerably higher than they are today, and higher than they will be after revisions are made.”