The CBI has called the Labour's party's plans to nationalise privatised utility industries and all private finance initiative (PFI) contracts as "the wrong plan at the wrong time".

At the party's annual conference on Monday, Shadow Chancellor John McDonnell announced Labour will bring existing PFI deals back under public control if it wins the next general election.

He said: "We have already pledged that there will be no new PFI deals signed by us. But we will go further. I can tell you today, it's what you've been calling for. We'll bring existing PFI contracts back in-house."

Mr McDonnell also pledged to boost spending on infrastructure outside London.

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He continued: "We'll build Crossrail for the north, connecting our great northern cities from west coast to east, and extend HS2 into Scotland.

"We'll deliver the funding for Midlands Connect, overhauling transport across the Midlands. And we'll overturn decades of neglect and lack of investment in the South-West.

"We'll electrify railway lines from Cornwall right through to London."

However, CBI Director-General Carolyn Fairbairn said forced nationalisation of large parts of British industry "will send investors running for the hills, and puts misplaced nostalgia ahead of progressive vision".

"Business and politicians share a determination to create a fairer society in which everyone benefits," she said.

"But the trickle of stalled investments caused by Brexit uncertainty could become a flood if these plans were to become reality. This would threaten the living standards of the very people that need help, from pensioners to students.

"Where Labour has engaged with business – from Brexit and skills to infrastructure and innovation – solutions have been found to deliver an economy that is both more prosperous and fairer.

"The CBI looks forward to urgent discussion with the Labour leadership to find better solutions to the shared challenges we face."

(LM/MH)