The government is revising plans to launch a loan insurance package for up to £20 billion for small businesses, it has been announced.

If proposals go ahead, sufficient funding will be provided by banks to help small businesses to survive the economic crisis.

However, the proposal has raised many concerns that £20bn may not be an adequate amount as it restricts banks to lend sufficient amounts for businesses that may require larger sums.

Martin Weale at the Institute of Economic and Social Research told the BBC that: "It's been clear for months that something like this is needed. I'm not sure it is on an adequate scale.”

Jon Moulton, managing partner of private equity firm Alchemy Partners also believes that £20bn is not enough.

He said: "Twenty billion pounds is not a very large number in the context of the problem. I would be a lot happier if the scheme was a lot larger."

According to Gordon Brown the measures would provide "real help now to deal with specific problems".

Yet the Conservatives believe that ministers should underwrite loans of up to £50bn.

Alan Duncan, shadow secretary of state for business, said the measures are "Too little, too late, too complicated... a small bandage on a massive wound."