According to research from Barclays, the stock of small businesses in England and Wales look likely to drop by as much as 150,000 by early 2010. The bank says this is due to tighter credit and tougher trading conditions.

Richard Roberts, head of small and medium-sized enterprise analysis at Barclays believes that the stock will fall by up to 150,000 “in the course of the downswing”.

“Growth has already stopped – closures have been higher than start-ups for some time,” he added

Mr Roberst forecast covers venture large enough to have business bank accounts. These have risen in number to about 2.85m in response to steady growth and interest rates. The prediction, which Barclays will make at an enterprise conference today, is more bad news for Gordon Brown, a long time champion of the entrepreneur.

Kat Callo, founder of Rosetta Consulting, a specialist property company, said: “Many young people and corporate employees who were thinking of establishing their own business are deciding not to. It is a sobering time.”

Start-ups are losing some of its glamour as high profile businesses crack under financial pressure. An example of this is one of Management Today’s top 35 young businesswomen to watch in 2006, Pepita Diamand. An ex-fashion journalist, her company Wrapit, went in to administration recently, leaving couples without gifts and guests out of pocket.

Mr Roberts does admit there will be less business failures than in the recession in the early 1990s. Company liquidations jumped by almost 15,000 to 24,000 between 1989 and 1992 as economic growth faltered. He said: “In the early nineties there was a larger number of new companies with heavy debts, which were often overdrafts repayable on demand.”

Harry Rich, chief executive of Enterprise In-sight, which co-ordinates Enterprise Week, an annual national festival, thinks that enterprise is “more important than ever in tough economic times,

“All the external drivers, such as the need to move away from an old-style manufacturing-based economy, are still there.”