Late settlement of invoices may be a nuisance to big business - but to smaller enterprises it can be a crippling or even fatal.

That was the message from a meeting at the European Parliament in Brussels where MEPs were briefed on the problem.

Anthea McIntyre, Conservative employment spokesman in the European Parliament, said: "As someone who has run a small business for twenty five years, I know only too well that larger companies can be blind to the problems of small and micro businesses, who do not have the cash resources to wait for payment or the human resources to chase late payers."

She was speaking after hearing a presentation from the Federation of Small Businesses, which is calling for a culture change across bigger companies to cut out supply-chain bullying and prioritise prompt payment.

The Federation is proposing a range of measures to address the issue, including a requirement for all FTSE 350 companies to sign up to a Prompt Payment Code and greater powers for the Small Business Commission to challenge culprits.

Miss McIntyre, Conservative MEP for the West Midlands, said:

"We have to realise that in many small businesses the managing director is also the accounts manager, HR manager, health and safety officer and credit controller.

"The real working week is spent finding new customers and delivering goods and services. The admin - including checking who has settled their invoice - has to wait until evenings and weekends."

"The impact of late payment can be absolutely crippling - in terms of both money and time wasted in chasing payment. In the worst cases such cash flow problems can spell the end for a small or fledgling company.

"Bigger concerns need to step up and make sure they look after their smaller suppliers instead of driving them to despair by dawdling over payment."