The Government is to review the use of controversial “zero-hours” contracts under which employees are put on standby and not guaranteed a minimum amount of work.

Vince Cable, the Business Secretary, has expressed concern that some companies are abusing the contracts and has ordered a review the growth of the contracts in both the private and public sectors. Although he is unlikely to ban them, they could be restricted or workers on them given more protection.

Mr Cable, told The Independent newspaper: “In the past decade, there has been a steady rise in the number of zero-hour contracts. For some these can be the right sort of employment contract, giving workers a choice of working patterns. However, for a contract that is now more widely used, we know relatively little about its effect on employers and employees. There has been anecdotal evidence of abuse by certain employers – including in the public sector – of some vulnerable workers at the margins of the labour market.”

The Business Secretary added: “While it’s important our workforce remains flexible, it is equally important that it is treated fairly. This is why I have asked my officials to undertake some work to better understand how this type of contract is working in practice today.”

The TUC and Labour MPs have called for the contracts to be outlawed, a move that Labour is considering during its wholesale policy rethink. Mr Cable’s officials will consult business groups and unions during the review.

The Conservatives would not support a ban and Mr Cable will not propose one on the basis that some workers prefer to be on call and to work only occasionally. He is prepared to look at safeguards, for example how people employed in this way are treated by the benefits system. One option could be higher tax credits to compensate for periods when they are not called in to work.

According to the Office for National Statistics, the number of “zero-hours workers” has risen from 131,000 to 200,000 since 2007 but the figures may be an underestimate. Initially, they were introduced in shops, restaurants and hotels but have spread to public services in recent years as public-spending cuts bite. The number in the NHS has risen by a quarter in two years to almost 100,000.