The Conservatives have unveiled plans to cut the burden of red tape on British industry.

Under the new policy companies will win the right to compensation for the heavy handed implementation of European Union laws.

Shadow trade secretary Stephen O'Brien said the policy would act as an incentive to prevent ministers and civil servants "gold plating" EU regulations.

Business would be free to apply to the courts to have the offending provisions deleted from UK legislation.

However, the policy would only apply to future, rather than existing, regulations.

Other proposals would see the party push for greater deregulation at EU level.

O'Brien said member states should be required to prove they can comply with EU legislation before signing up to it, while "sunset reviews" would examine whether, in practice, the benefits of the rules outweigh the costs.

And under a "red card" scheme, directives should be scrapped if half or more of national parliaments express their dissatisfaction.

The Tory spokesman said that current government  policies were "marked by confusion and capitulation".

"Businesses large and small have made it abundantly clear that the tide of regulation is moving in the wrong way," O'Brien said

"It is estimated that red tape costs since 1998 have been £30 billion. This is a major deterrent to business investment and economic growth."

'Gold plating'

The Conservatives said that between 1997 and 2003 the government passed 23,322 regulations.

And with an estimated 60 per cent of new rules stemming from EU directives, O'Brien said ministers were guilty of making them unnecessarily complicated.

Calling for the minimum possible implementation of European rules, he said Whitehall had developed a "gold plating culture".

The Abattoirs Directive left the European Commission as a 12 page document but was 96 pages long by the time it was implemented in the UK.

And parts of a 2003 directive dealing with directors' communication were expanded from four paragraphs to 132 pages, said O'Brien.

"Good regulation can facilitate and boost markets," he said.

"Bad and excessive regulation, however, retards and distorts markets, undermining innovation and wealth creation alike."