More than a quarter of UK entrepreneurs have increased their hours to compensate for fears created by the economic downturn, according to a report published by Tenon Forum, an independent think-tank.

Small and medium size business owners have added approximately eight hours to their average week as a direct result of the current crisis, the report claimed.

Redundancies have also risen across the sector. More than a quarter of those questioned said they had already made staff redundant, with a further 24 per cent saying they intend to cut salaries by an average of 9 per cent over the next 12 months.

The issue of staff bonuses remains contentious, with 14 per cent of entrepreneurs saying they will use them to encourage staff retention, but 54 per cent admitting there would be no additional incentive other than the usual pay rise.

Carl Jackson, head of Tenon Recovery, said: "It's no surprise that entrepreneurs are increasing their hours to stay afloat, as we continue to see record numbers of failing businesses and no sign of the recession easing. However, it is encouraging to see small businesses being realistic and taking practical steps to see them through the downturn".