A row has broken out between two of Gordon Brown’s most senior ministers about plans to promote equality in the private sector.

Alistair Darling, chancellor, is resisting pressure from Harriet Harman, the deputy Labour leader and minister for equality, to change procurement rules to improve gender and racial equality in the 30 per cent of companies that sell goods and services to the state.

The proposals would allow the public sector to require any company to disclose its gender pay gap and the number of ethnic minority and disabled people it employs. This information could determine which company would win a contract in cases where the competing tenders appear to offer equal value for money.

But the chancellor is opposing the guidelines amid Treasury concerns they run counter to government efforts to cut regulation and make it easier for smaller firms to win government business. Mr Darling is also worried the proposal could fall foul of European laws banning state bodies from setting “disproportionate” requirements in tenders.

“Value for money is our key procurement objective,” a Treasury insider told the Financial Times. “We don’t want to be putting on regulatory burdens and increasing costs in all this, and we don’t want to discourage small businesses.”

Ms Harman says the government is committed to narrowing the gender gap: “Eighty per cent of employees work in the private sector and there’s double the [gender pay] gap that’s in the public sector.” She stressed the requirements were already being developed. “This does not need to wait for specific legislation.”

Mark Fox, chief executive of the Business Services Association, the trade body for companies providing outsourced services, said Ms Harman’s aim “may be laudable” but it could cost taxpayers more and damage the efficient service delivery.