by business editor Trevor Sturgess

A Kent boss has warned that unless the budget deficit is slashed quickly, with major cuts in state spending, the state sector will shrink the economy.

Miles Templeman, director general of the Institute of Directors, and chairman of Shepherd Neame, the Faversham brewer and pub owner, called on the three main party leaders to spell out their plans.

Tonight's debate focuses on the economy and is sure to provoke fierce argument, with PM Gordon Brown, hoping to re-assert his authority after yesterday's gaffe in Rochdale, by claiming his record is strong, steering Britain through recession and global financial crisis.

But his opponents David Cameron, the Tory leader, and Nick Clegg, for the Liberal Democrats, are likely to attack Brown for policies which they will claim made the situation worse.

They are likely to clash over the action needed to slash the £167 billion deficit.

Business has tended to side with the Tory view that the deficit should be cut sooner rather than later instead of the more measured Government approach coupled with targeted investment.

Mr Templeman said that business was crying out for political leadership that championed wealth creation.

Like many other business leaders, including several in Kent, he is worried about a hung parliament that could paralyse decision-making.

"If British business is to compete effectively in the 21st century we need a fundamental root and branch reform of the state.

"Government has got to get smaller and better. Unless we shrink the state, the state will shrink the economy."

He added: "While political parties agree that the deficit is a problem, there is little agreement on how it should be tackled," he said.

"So it doesn't surprise me that so many business leaders are worried about a hung parliament.

"The risk is that there will be no agreement on the nature of public spending reductions, and that on this key issue a coalition or minority government will be paralysed."

"We're a week from the General Election but we're still years from bringing the deficit and the size of the Government under control.

"If the truth be told, no political party is advocating the scale of spending and deficit reduction we need, not just for the next few years, but for the next decade."