Mr Ahmed launched a blistering attack on the quality of business advice in Yorkshire during his keynote speech at the Venturefest Yorkshire event, which was held at York Racecourse.

He said bodies like Business Link should adopt the brutally honest approach used by the panel on BBC TV's Dragons' Den to ensure time wasters were shown the door.

Representatives of Business Link rejected Mr Ahmed's criticism and said they would only help businesses which had a strong chance of becoming viable.

Mr Ahmed, from Huddersfield, said "The generic advice provided by public sector funded bodies about VAT and accounts is not a problem. The problem is we are still giving advice to people with poor ideas.

"We need to stop funding and supporting people with poor ideas because it seems the kindest thing to do. Just like the X Factor I get to meet people who think they have come up with the next big thing, the problem is they have asked the wrong people.

"They have asked maybe their friends or their parents, but they need to ask people who don't have a stake in their business and are independent.

"The public bodies, instead of telling them that they haven't got what it takes, they build up false hopes. Then when it comes to generating the revenue, they find they have wasted their time and by then it is too late.

"If you want a solution, look at how they do it on Dragons' Den or the X Factor. They (public sector funded advice bodies) will indulge people with poor ideas and that's the problem. They build up false hopes and you shouldn't do that. We need to focus our efforts on the businesses that are going to succeed. There are success stories out there, unfortunately there's painfully little in the way of big success out there in Yorkshire.

"They once again (public sector funded advice bodies) may be measure how many people they have helped, not how many people have succeeded. They are probably using the wrong measures."

John Fox, the marketing and communications manager at Business Link for York and North Yorkshire, responded: "If you speak to advisers dealing with start-ups, you find they turn away 30 per cent of applicants purely after looking at the initial idea.

"We have to drive the pre-start-up economy, but we want businesses to start that are sustainable. All Business Link advisers will be honest and fair. They don't want people to put their homes at risk, just so they can tick some boxes."

Simon Hill, Executive Director of Business at Yorkshire Forward, said: "I agree with Ajaz that publicly funded business support should focus on those businesses that offer the greatest opportunities for growth. That is why the new support service, that comes online this April, will focus on six key areas that have most impact on success."