The CBI has praised the government for refusing to give in to pressure from EU member states to scrap the opt-out to the Working Time Directive (WTD).
On Friday it emerged that EU ministers had again failed to agree on a WTD deal after long talks in Luxembourg.
Under the current directive, employees cannot work more than an average of 48 hours per week - unless they agree to opt out, a clause secured by the UK government.
The Austrian presidency had pledged to break the stalemate on the drawn-out saga, following failed attempts by three consecutive EU presidencies.
The UK has resisted attempts to remove the opt-out from the directive, while members such as France and Sweden pressed for it to be scrapped.
CBI director general, Sir Digby Jones, said that scrapping the opt-out would lead to economic stagnation in Europe.
“This issue will come back to the table and the government needs to hold its nerve. It must not risk allowing so many caveats and conditions to be added to the opt-out that it is rendered useless and the principle surrendered in all but name,” he said.