It wants to see the process genuinely based on economics and says the current system appears to be an attempt to balance the conflicting bids from businesses and unions.

The BRC was responding to a report - 'The National Minimum Wage: Towards a Predictable Framework' - which it commissioned from Oxford University. It found the NMW had increased by 46% since 1999, well above any of the economic indicators that should be considered.

A spokesman said:

"Taken together, the erratic increases of the past have outstripped all the economic indicators that should have guided them.

"This is now undermining many retailers' ability to create jobs while the uncertainty over future costs disrupts attempts to plan investment, recruitment and pay settlements."