THE CBI has dropped plans to register as a supporter of a No vote in the indyref in a humiliating climbdown.

Britain's big business lobby, citing legal advice, has formally withdrawn its application to the Electoral Commission to be officially considered part of the pro-UK movement.

Its dramatic u-turn comes after a huge backlash by some of the Scottish firms and bodies it represents.

Several, including STV, have quit. The BBC yesterday said it would suspend its membership during the Scottish referendum campaign.

John Cridland, its director-general, said: "The CBI is politically independent and impartial.

"Although the decision to register with the Electoral Commission was taken in good faith, in order to carry out normal activities during the referendum period, it has inadvertently given the impression that the CBI is a political entity - we are not and never will be.

"We have always said that the referendum is a decision for the Scottish people and we're not telling people how to vote.

"However, we do have a legitimate role as the UK's biggest business group in raising important questions on the big issues affecting businesses, jobs and growth, which we will continue to do.

"Registration has raised a question as to whether we have changed the CBI's role - we have not and that was never the purpose of registering."

The CBI board, after advice from its lawyers and an independent QC, came to the view that it should never have made the application in the first place.

Mr Cridland added: "We are working closely with the Electoral Commission and have asked them to accept our legal team's advice and nullify our application with immediate effect.

"We have also given a firm assurance to the Commission that during the regulated period the CBI will not carry out any activities that fall within the terms of the regulations. This includes campaign broadcasts, sending unsolicited material to voters or holding any referendum-specific press conferences.

"As businesses work hard to secure the economic recovery, the CBI has a job to do on behalf of CBI members and their employees to help create the right conditions for the UK to grow and prosper - and we will continue to do that without fear or favour."

An Electoral Commission spokesperson said: "We have received representations from the CBI to de-register.

"We are currently considering whether this is possible under the relevant legislation and will make our reasoning public when we have reached a conclusion and informed the CBI of our decision."