Ministers on Monday backtracked on suggestions the government would delay plans to extend flexible working rights to 4.5m parents, under proposals to help small businesses launched by Gordon Brown on Tuesday.

Lord Mandelson, the new business secretary, faced a furious backlash from unions and political opponents after it was reported that he intended to postpone the new rights indefinitely. Cabinet colleagues played down the suggestion of a U-turn, while Downing Street stressed Lord Mandelson had only recently started in his post.