Under the scheme, employees would be sent home on an ATR on pay of double the rate of the Job Seekers Allowance for a period of up to six months, with both the government and the employer paying the standard rate.

After the period of ATR, the employer could either take the employee back or make that person redundant.

CBI deputy director general John Cridland said: "We considered various forms of wage subsidy and support for short-time working, but this approach is better.

"Businesses will be more able to cope with sharp drops in demand and prepare for recovery, while workers benefit from improved financial support and a door that is kept open for six months."

The idea is one of a series of initiative proposed by the CBI, including a review of the length of consultation on redundancies and a delay in the increase in National Insurance contributions scheduled for 2011.

For more, see this week's PrintWeek.