The CBI has warned Tony Blair he has a "persuasion job to do" if he is to retain business confidence during Labour's third term.

Director general Sir Digby Jones said the prime minister had got off to a bad start with his refocusing of the Department of Trade and Industry on Friday as the Department for Productivity, Energy and Industry.

Sir Digby said the move "smacked of old-fashioned corporatism, of 1960s trades unionism".