FINANCIAL chiefs at the region's largest companies have strengthened their support for Britain staying in the EU with Brexit seen as a major risk, new findings show.

Three quarters of financial bosses favour the UK remaining in the EU, against 62 per cent in final quarter of 2015. Only eight per cent say the UK would benefit by leaving the EU, compared with six per cent in the previous survey.

Chief financial officers surveyed by Deloitte say the business environment has become more challenging, with uncertainty up sharply and risk appetite at a three year low.

Plans for hiring staff and capital spending have dipped and CFOs are prioritising defensive strategies, the survey shows.

Of those supporting staying in the EU, 89 per cent said membership has helped the UK's export performance, 86 per cent said it has attracted foreign direct investment, 71 per cent said membership has contributed to the success of UK financial services and 68 per cent believe it has boosted the UK's influence and connections with the rest of the world.

Free movement of people has benefitted the UK according to 78 per cent of financial chiefs, down from 87 per cent a year ago.

Financial chiefs ranked the EU referendum as the biggest risk facing their businesses , ahead of economic weakness in the euro area , weak demand in the UK and the prospect of higher interest rates in the UK .

Around a quarter said their company has made, or is in the process of making contingency plans for a possible British exit of the EU, but more than half have made no such plans.

Martin Jenkins, practice senior partner at Deloitte in Yorkshire and the North East, said:

"These results show a high level of support among chief financial officers for the UK remaining a member of the European Union.

"CFOs see significant benefits in UK membership, particularly in terms of helping UK exports, attracting investment and strengthening the UK's influence and connections with the wider world.

"However, we are already seeing the unsettling effect of the referendum on business sentiment. Our survey shows declining risk appetite among CFOs, with the referendum rated as the top risk their business faces, and we have seen a marked slowdown in M&A activity as businesses put plans on hold for now.

"While voices on both sides of the debate argue about the potential economic impact of a 'leave' vote, the referendum appears to already be contributing to a slowdown."