The body that regulates gangmasters has warned that the way supermarkets squeeze suppliers could be putting workers in danger - and has called for an ombudsman to be appointed to curb their power.

The Gangmasters Licensing Authority has written to the Competition Commission's groceries inquiry team setting out concerns that the "immense pressure" retail buyers put on suppliers to reduce costs was filtering down to those who supplied labour to farmers, packers and processors.

This could "inhibit a safe and fair working environment", it said, and lead to "non-compliance with the national minimum wage".

The GLA called for the Supermarkets Code of Practice to be strengthened, the introduction of an ombudsman and "meaningful penalties" for non-compliance.

"The obvious variable cost is labour," GLA chairman Paul Whitehouse stated in the letter. "Suppliers therefore constantly seek cost reductions from their labour provider.

"This presents a significant public policy risk that suppliers and labour providers will agree charge rates below the level which ensures all statutory requirements are met."

The GLA told the commission its research found many suppliers believed retailers' ethical trading initiatives conflicted with the targets they set for buyers and supply chain managers.

"Supermarkets have

very clear codes, but at the same time they put substantial pressure on

buyers, so are buyers

occasionally transgressing the rules?" Whitehouse said this week.

"Retailers need to monitor their buyers. All retailers should have in their auditing the question 'What are you paying your workers?' and tell us if it arouses suspicion."

Supermarket chains could not take it for granted that if a gangmaster was licensed, good practice was guaranteed, he warned.

"Some gangmasters straighten themselves up for inspection and return to normal when we're gone. We need the people who deal with them day to day to let us know."