City bosses stunned observers yesterday by calling for a higher threshold for workers’ national insurance contributions and government-funded free childcare in yet another sign that the wheels are falling off the Con-Dem austerity plan.

The revelations came as debate at the Confederation of British Industry (CBI) conference centred on the issue of EU membership, with bosses’ lackeys saying that four in five big companies wanted to stay in.

As Britain’s political Establishment lined up to schmooze the fat cats, the CBI claimed that its proposals to kick-start economic growth “could have come from a trade union.”

Last week, the lobby group was fuming after trade unionists won a massive victory on holiday pay.

CBI director general John Cridland told an audience of the elite that the threshold for national insurance employee contributions should be raised to £10,500 a year, saying that it would increase workers’ take-home pay by £363 a year.

“The financial crisis and the slow recovery have hit people’s finances hard. Living standards will gradually improve as the economy does but growth on its own will not be the miracle cure,” he said.

His deputy Katja Hall called for 15 hours’ free childcare to be extended from three and four-year-olds to all children aged one and two, and urged ministers to extend maternity pay from 39 to 52 weeks.

Policy Research in Macroeconomics director Ann Pettifor said: “While all the parties are currying favour with the CBI, there can be no doubt its director is trashing the coalition’s policies for lowering wages via austerity and increasing insecurity and inequality.

“Clearly, big business is losing patience with this government. The question remains: is it endorsing Labour?”

Floundering Prime Minister David Cameron struggled to suck up to the bosses without enraging his own backbenchers.

“I agree with what the CBI has said — we should be looking for a reformed European Union,” he said.

“Now I am the politician who has the plan for that reform, who wants to see the single market safeguarded and not have us ordered around by the single currency countries.”

But CBI president Michael Rake said: “Do not be fooled — by withdrawing from Europe, we do not somehow become more open to trade elsewhere. Instead we turn inwards, going against the grain of an increasingly connected world.”

And Labour leader Ed Miliband said: “If I am Prime Minister I will never risk your businesses, British jobs, British prosperity by playing political games with our membership of the European Union.”

Eurosceptic Labour MP Austin Mitchell slammed Mr Miliband for jumping on the big-business bandwagon. “Miliband to win business support by telling CBI how much Labour loves the EU,” he wrote on Twitter. “PS, we’ll also invade Iraq if they want us to.”

Mr Miliband also defended Labour’s support for the 50p tax rate and the mansion tax on houses worth more than £2 million.