Plans to extend paid maternity leave to 20 weeks have been blocked by EU employment ministers, who deemed them impractical in the post-recession economic climate.

The proposals, which were backed by a vote of the European parliament in October, were dismissed by a majority of the trading bloc's member states. Belgium – which currently holds the EU presidency – will suggest a new scheme in three weeks.

British Chambers of Commerce (BCC) European representation head Kieran O'Keeffe told the Daily Telegraph: "Yesterday's discussion was good progress. But I'd be reluctant to say … nothing is going to happen."

The Institute of Directors welcomed the announcement, describing the legislation as "terrible" and called on the European Commission to scrap the idea altogether to avoid lumbering businesses with extra costs.

Earlier this week, the BCC warned that giving pregnant women 20 weeks' leave on full pay would deprive UK firms of around £3 billion each year.

Posted by Cameron Thomson