WYRE Forest business leaders fear a hitch in a £300 million economic development grant earmarked for the West Midlands will stifle small enterprise growth in the district.

The chairman of Wyre Forest Business Forum described the referral of the British Government's regional capital fund cash to Brussels as a "major embarrassment" for the Secretary of State for Trade and Industry, Stephen Byers.

The European Union could prevent the cash injection going ahead if it considers it to be anti-competitive.

Members of the forum, together with representatives of the Chamber of Commerce Herefordshire and Worcestershire, will have an opportunity to put their concerns and views to Mr Byers when he visits Wyre Forest in March.

Stephen Hodge, the forum's chairman, said: "Many businesses are planning to expand, based on promises of money they will not receive, either in total or at, perhaps, a date not earlier than 18 months."

He added: "With the textile industry being in decline and carpet being manufactured abroad, it's very important that we create new types of industry, where entrepreneurs want to invest and grow their businesses."

Mr Hodge said a ban on funding such as the £300 million would deter both inward investment to areas like Wyre Forest and growth of existing companies.

He went on: "We need new employment land and we need the Government to foster an area where entrepreneurs can invest, to get new types of industry that will be relevant in 10 to 20 years' time; that is in high-tech industry."

The timetable for Mr Byers's visit to Wyre Forest, on Friday, March 16, has still to be finalised. It is likely to include tours of local companies and a breakfast or lunch where local business people can question him or put their views.