Fine Gael Leader Enda Kenny has launched a 'rescue plan' for small businesses in the run up to this week's elections.

The Party's Enterprise Spokesman Leo Varadkar said the Fine Gael measures could save an average small business around €50,000 a year.

The measures include plans to support small businesses, tackle business costs such as rent, a freeze on Government charges, and concrete steps the Government can take to protect jobs.

Mr Varadkar said: "Small businesses are the backbone of the Irish economy. There has been a silent haemorrhaging of jobs from small & medium enterprises across the country. Yet the Government has failed to produce any concrete measures to support SMEs and stem the tide of rising unemployment.

Last week, the Irish Small and Medium Enterprises Association (ISME) blasted the Government for what it called "undue pressure" on small and medium firms to reduce their prices on existing contracts with the state.

The Association claimed it had seen a letter from junior minister Martin Mansergh to government departments including a template letter to suppliers requesting an immediate reduction.

The association said the letter calls for a reduction in prices and stated: "Should a reduction not be secured, then to consider other options such as 'notice of termination or to reducing the level of purchases'.

ISME Chief Executive, Mark Fielding said: "It is ironic that the public sector, which has increased employment numbers and continues to harbour inefficiencies, is forcing smaller suppliers to reduce the price of goods and services.

"While ISME agrees wholeheartedly with cost reduction, and the fact that all future contracts must take into account the changed economic circumstances, we strongly disagree with the current bully-boy tactics."

(DW/BMcc)