The Government has been urged to extend its furlough scheme for at least another three months or face large-scale redundancies.

That is the view of the Chartered Institute of Personnel and Development which also called on Chancellor Rishi Sunak to allow staff furloughed under the Coronavirus Job Retention Scheme to work reduced hours.

The scheme, announced in the initial wave of government measures during the coronavirus pandemic last month, has been extended until the end of June.

But the CIPD, the trade body for human resources, believes it should run until at least the end of September to prevent many furloughed workers being laid off.

And in a survey of 1,000 companies across the country, seven in 10 said up to half of employees could work reduced hour if the scheme allowed them.

CIPD chief executive Peter Cheese said an extension of the scheme would help remove the risk to furloughed workers of a "cliff-edge exit" into redundancy.

He said: "Urgent decisions must now be taken to make it more flexible and to extend it so employers can continue to protect jobs."

A survey of members by the British Chambers of Commerce said 76 per cent of them had furloughed staff with very few redundancies.

Director general Adam Marshall said: "While the furlough scheme cannot be indefinite, it will need to run well beyond June 30 in some form to help businesses transition toward a new normal as the lockdown is eased."

The Chancellor told Parliament on Monday that gradual refinements to support were included in government plans to relax lockdown restrictions.

The Resolution Foundation says extending the scheme, which pays 80 per cent of workers' wages up to £2,500 a month, would cost £12billion for each additional month.

Last week Punchline warned that thousands of Gloucestershire businesses may fail  without further government help.

Punchline-Gloucester.com editor Mark Owen said: "We have spoken to a large number of businesses across many sectors who have already offloaded interns and apprenticeships and are now considering axing members of staff once the furlough period is over.

"Small retailers, small business owners all work together and support each other, they tend to use the local accountant, solicitor, printer, graphic designer and so on - when one goes down the affect is felt badly but if hundreds go down it will be devastating.

"The Government has done an amazing job introducing support packages, but it has got to go much further or there will be no way back for some firms. Many are feeling scared and looking down the barrel of a gun."

A survey by Business West, which represent's the region's Chambers of Commerce, showed only 16 per cent of respondents would be able to ride out a six-month lockdown.

Business West's Gloucestershire director Ian Mean said: "These are critical weeks for the economy and for the fate of many firms.

"We are hearing from the coal face stories of firms, built up by individuals over decades, now looking into the abyss.

"Firms falling through cracks in support packages for a few weeks can be managed, but when these weeks start to become months, they cannot be left unsupported."