A Kent politician has predicted that small, family-run businesses already bitten by the credit crunch could be about to face another huge challenge.

Laura Sandys, the Conservative parliamentary candidate for South Thanet, believes a five per cent hike in business rates planned for April could mark the end of the road for many independent retailers.

The government announced the increase in response to September's unusually high rate of inflation but the British Retail Consortium claims the move will cost British businesses around £250 million.

Ms Sandys said: "It will drastically affect those shopkeepers who aren't making much of a profit but are making a living nonetheless, particularly since the increase will bring no benefits for local people.

"We’re squeezing the energy out of small business owners and they’re literally giving up because there is too much regulation and too much taxation.

"We need to liberate these small businesses and allow their prosperity to bring our high streets back to life before they lose their soul altogether."

The Confederation of British Industry last month called for business rates to be frozen this year to help companies through the economic downturn.

Its director of business environment policy, Dr Neil Bentley, called the increase "unnecessary" and said retailers would be hit hard "at a time when they need all the help we can give them".

He added: "This threat to jobs, investment and the survival of viable businesses can still be avoided if the government takes action."