West Midland business leaders have given a mixed reaction to Gordon Brown's handling of the economy amid claims that his £2.7 billion tax cut plan flouts the tight controls he introduced when he was in charge at the Treasury.

Mr Brown, who yesterday said he hoped there would be a further cut in interest rates, defended his handling of the economy by saying the problems affecting the country were international in origin.

The former chancellor, whose leadership has been questioned in recent weeks following Labour's disastrous performance in this month's local elections, denied the tax cut flouted fiscal policy and steadfastly maintained he was the best person to lead both his party and the country during the difficulties.

Finding allies in the West Midlands proved difficult, but the president of the Black Country Chamber of Commerce and Industry, Peter Mathews, said the Prime Minister still enjoyed his support.

Mr Mathews said: "He is not without his problems - the 10p tax plan has come in for a lot of criticism - but the situation has not been entirely of his own making.

"He is an experienced politician and changing horses mid-course will not do anyone any good. We are going to need his experience over the next few months as the tightening of cash flows continues to restrict investment."

John Lamb, spokesman for Birmingham Chamber of Commerce and Industry, was more harsh.

He said the Prime Minister needed to offer more help to entrepreneurs if he was to continue enjoying the support of businesses in the West Midlands.

"The government had promised to be more business-friendly but at the moment, they aren't delivering the policies that will achieve this," he said.

"Its indecisive handling of the economy is causing problems and issues like the 10p tax plan are making things worse.

"We want to see policies that will encourage businesses to thrive but changes to capital gains tax, corporation tax and the decision to give temporary workers the same rights as permanent ones are not helping."

"We will be looking for a big improvement over the next few months," he added.

Peter O'Grady, head of representation at EEF West Midlands, was another who believed the government's performance was mixed.

"We very much welcome the Prime Minister's focus on the skills agenda and raising the profile of apprenticeships. The lack of skills is one of the biggest problems facing companies in our region," he said.

"However, the government has got itself in a mess over taxation. The UK's tax position is heading in the wrong direction and businesses are struggling to compete.

"The lack of consultation over changes to CGT and the increase in the lower rate of corporation tax have hit smaller businesses disproportionately.

The government urgently needs to set out a more coherent and comprehensive strategy to develop a competitive business tax regime," he added.

Meanwhile, the chairman of the Institute of Directors in the West Midlands said the region's businesses needed less legislation, not more.

Richard Boot, responding to the measures outlined in the government's draft legislative programme, said the IoD supported the principle of flexible working but felt the amount of red tape tied up with its implementation would be counter productive.

On temporary workers, he said: "We remain opposed to any changes that will damage the flexibility of the UK's labour market."

Elsewhere, the British Chambers of Commerce said the government's planned 2p fuel duty rise was unjustified.

BCC director general David Frost said: "The rising cost of petrol is hitting everybody hard, not just businesses.

"With the Treasury estimates on what it would bring in on fuel tax woefully out of line with reality, this £505 million windfall in less than two months must surely rule out the 2p rise scheduled for October. It is simply unjustifiable."