LORD Mandelson last night called for an overhaul of M&A rules in light of the Cadbury takeover.
He said laws needed to be in place to ensure the long-term future of British companies.
In his Mansion House speech to London financiers he said: “We need directors equipped to be stewards rather than just auctioneers.”
He suggested raising the voting threshold for securing a change of ownership to two thirds, lowering the requirement for disclosure of share ownership during a bid from one per cent to 0.5 per cent and giving bidders less time to table offers to help prevent “phoney” takeover bids.
But he said he was “very cautious” about introducing a public interest test, arguing it could lead to protectionism.
The business secretary also gave a rousing defence of the City, saying it should be recognised as the “heart of our economic life”.
He added: “One of the biggest risks following the banking crisis is the development of an unhealthy attitude towards business and open markets in general. To jump to the conclusion that the whole market economy has failed us is a dead end.”