THE UK's biggest manufacturer of expanded polystyrene manufacturer has appealed to Chancellor Gordon Brown to scrap an energy tax.

In letters to MPs in nine constituencies, including North West Durham MP Hilary Armstrong, Styropack UK managing director John Yeoman has expressed opposition to the Climate Change Levy (CCL).

The CCL was introduced last April as a tax on energy use in industry, commerce, agriculture and the public sector, including the consumption of electricity, gas, coal and liquified petroleum gas.

Mr Yeoman, who has a factory at Harelaw, near Stanley, County Durham, said that the charge was damaging his business.

He said it should be replaced with a voluntary agreement for energy reduction.

He wrote: "My greatest fear is that the levy could be increased in the budget.

"This would be severely damaging for industry and widen the growing rift between business and the political world."

Mr Yeoman said the CCL was a stealth tax which already cost Aberdeen-based Styropack almost £250,000 a year, even after the reduction in employers' National Insurance contributions which the Government said would help to offset the charge.

He said: "Ministers still refer to the levy as being revenue neutral in the face of massive evidence to the contrary for individual firms."

Styropack employs 450 staff in the UK and its products are used to protect an array of goods for companies such as Sony, Rover, Jaguar and Philips.

Ms Armstrong could not be reached for comment last night