Under the Home Computer Initiative (HCI), money for a PC could be taken directly from workers' pay packets before tax. More than half a million people have taken advantage of the scheme during the two years it has been running.

But the initiative will end on 6 April, Gordon Brown announced in the Budget. He says it will recoup around £150 million for the Treasury by 2008/9.

Sir Digby-Jones, director-general of the CBI, says he has been bombarded with letters from angry firms that had spent money setting up the HCI for employees.

He said:

"This flies in the face of everything the country is trying to achieve on skills. 75% of people affected by this change are lower-rate taxpayers. They will want to know why the Government has deprived them, and their families, of this opportunity; and firms will want to know why they have only been given two weeks to work out what to do with their schemes. Computer literacy has to be a given in a globally competitive economy."