BUSINESS leaders fear that new parental leave allowances could create an administrative nightmare for North-East companies.

The Work and Families Bill extends paid maternity leave from six to nine months, but fathers rather than mothers could take the last three months.

The planned laws could also give flexible working rights to people caring for adult relatives.

At present, the rules entitle working mothers to six months' paid leave, followed by six months' unpaid time off.

The new Bill would extend the paid period to nine months.

It would also allow fathers to take the second six months of leave instead of mothers, with the remaining three months' money - £106 a week - being transferred to them.

The Government is expecting about 9,000 fathers to take up the offer from 2007.

It said it was planning to extend paid leave further - from nine to 12 months - by the next General Election.

That means fathers could receive a full six months' statutory pay.

The North East Chamber of Commerce (NECC) is concerned that could lead to the owners of companies having to police the period during which their staff are allowed to care for their baby.

The system would also give smaller companies problems filling the skills gap left when employees are on leave.

George Cowcher, NECC chief executive, said: "Bosses face the prospect of playing policeman, clerk and co-ordinator of a system that could become a complete minefield.

"Businesses are sympathetic to the needs of the modern family, but they are fearful of further red tape that places a greater burden on their shoulders."

Small business bodies, such as the Federation of Small Businesses, are also unhappy about the extra unpaid leave, fearing that companies could lose staff for months at a time.

They are hoping for some support from the Government if staff are away on paternity or maternity leave.

At present, new fathers recieve two weeks, paternity leave and new mothers get six months.

British Chambers of Commerce director general David Frost said: "While employers want to actively support flexible working, the Government must realise that extending parental leave at such an unprecedented rate will add more confusion and pressure to firms who are already struggling to compete."

The Government believes that having more women in work would help the economy, and also help fathers play a more active role in their child's life.

Where a woman's career was more important to a household, it should be possible for her to return to work while the man looked after childcare.

However, CBI deputy director-general John Cridland said the "inevitable administrative burden" had to be shared.

He said the bill left employers guessing at whether they could hand back to the Government the burden of administering maternity pay.