European business leaders warned yesterday that French rejection of the constitutional treaty could hamper the EU's efforts to become more competitive.

Ernest-Antoine Seilliere, president of Medef, the French employers' federation, said the ballot result would make it less certain that the EU would realise its "Lisbon agenda" of improving productivity to compete with the US and emerging economies.

Unice, Europe's biggest employers' body which includes Ibec, described the "No" vote as a setback for the continent in its bid to compete in the global economy and insisted the EU push on with its business strategy.

"I call on all the decision makers at EU and national level to find solutions to this important setback and in the meantime to make sure that the work continues on implementation of the growth and jobs strategy," said Jurgen Strube, president of Unice, which represents 20 million companies, employing more than 120 million European workers.

Arcelor, the world's largest steelmaker, said it was "disappointed" but not "surprised" at the decision and urged politicians not to give up in their efforts to broker a new constitution.

Maria Livanos Cattaui, secretary general of the International Chamber of Commerce, identified a divergence between attitudes in the older, established powers and some of the new entrants from eastern Europe.

"What you see in Germany and you see in France is not necessarily indicative of what you see everywhere. People in some parts of Europe are fed up with some of the status quo and the entrenched way of doing things in some of the larger areas. It is going to be interesting to see which vision of Europe triumphs," she said.

Jurgen Thumann, chairman of the Federation of German Industry, yesterday called for "swift, convincing steps" to prevent the EU becoming "politically and economically" paralysed.

"The completion of the single market, which will benefit all European citizens, must remain a priority. This is particularly true of the opening of the market for services," Mr Thumann said.

Anton Borner, head of the Federation of German Wholesalers and Exporters, warned of the long-term impact of the French "No" vote, saying that it had "raised doubts about the viability of the European model".

"Decisions, for instance concerning the long-term financing of the EU budget, and particularly in the domain of liberalisation and employment, should become even more difficult," Mr Borner said.