Politicians should do more to secure London's position as a world class place in which to do business, the CBI has said.

The warning came as a poll for the business body found that 87 per cent of firms believe the Capital is a good place to be based, but 89 per cent say it is more expensive than other major cities.

Respondents said that being in London boosts their image and helps networking and marketing.

But poor transport, skills shortages and crime were said to be having a damaging impact on the Capital's prospects.

More than a third are considering, or already have, relocated activities elsewhere in the UK or abroad.

"It's clear business people make some finely balanced judgements when they assess whether the plusses of being in London outweigh the minuses," said CBI director general Sir Digby Jones.

"For many that balance remains in London's favour but no-one should be complacent about its continuing attractiveness as a place to invest and do business.

"Politicians must work at securing London's place as a world business city not add to the burdens that will tip that balance the wrong way."

He called for transport improvements, action on skills shortages and a "drastic simplification... in the confusing array of bodies attempting to provide skills initiatives".

"And, having been promised bonfires of damaging regulation so many times before, will politicians local and national actually deliver reductions in red tape, to allow companies to get on with running their businesses?" Sir Digby asked.