Jeremy Corbyn has staged an embarrassing climbdown after his call for a maximum pay cap for high earners was branded "totally idiotic" by a former top economic adviser.

The Labour leader said salaries paid to some company bosses and top footballers were "utterly ridiculous" and that he would like to see a cap to counter the soaring levels of income inequality.

Read more: Jeremy Corbyn pay cap calls interesting, says Scottish Labour

But after business leaders warned the proposal was a "non-starter", a spokesman said he "misspoke" after being asked about a "cap" during a radio interview.

Mr Corbyn later said a better way of curbing executive pay was by controlling the pay ratio between the highest and lowest earners in a company.

The Labour leader initially raised the idea of a maximum pay cap during a series of broadcast interviews ahead of his first major speech of the year focusing on Britain's future after Brexit.

Read more: Jeremy Corbyn pay cap calls interesting, says Scottish Labour

"If we want to live in a more egalitarian society and fund our public services, we cannot go on creating worse levels of inequality," he told BBC Radio 4's Today programme.

"I would like to see a maximum earnings limit, quite honestly, because I think that would be a fairer thing to do.

"We cannot set ourselves up as being a sort of grossly unequal, bargain-basement economy on the shores of Europe."

His comments were met with widespread derision.

Danny Blanchflower, a former adviser to the Labour leader and ex-Bank of England Monetary Policy Committee member, said the idea was "totally unworkable".

"Corbyn max wage lunatic idea would generate a huge brain drain as smart people move abroad shows how out of touch he is," he wrote on Twitter.

"If I was still an adviser I would have told him it's a totally idiotic unworkable idea."

Read more: Jeremy Corbyn pay cap calls interesting, says Scottish Labour

Oliver Parry, the head of corporate governance at the Institute of Directors, said that while big companies needed to address public concerns about executive pay, a maximum earning cap was a "non-starter".

"Politicians simply do not know the right level of pay for the heads of multinational companies, and no successful economy operates with this level of intervention by government," he said.

Later, during a question and answer session following his speech in Peterborough, Mr Corbyn indicated that there were better ways of curbing executive pay.

"You could set a limit on top pay. I think it is probably better to look at the ratio issue because that would then indeed encourage wage rises lower down and ensure a better sharing of the resources and profits in an organisation," he said.

"We are looking at this as a consultation proposal. Whether we could use it in company law, whether we could use it in statutory law or whether it's something we could ensure is introduced voluntarily."

Read more: Jeremy Corbyn pay cap calls interesting, says Scottish Labour

In the speech, Mr Corbyn said there were "many options" for dealing with the issue.

They could include a government-backed Kitemark for companies with agreed pay ratios between the highest and lowest earners or a requirement for executive pay to be signed off by remuneration committees on which workers had a majority.

Other proposals were a lower rate of corporation tax for firms that do not pay any more than a set multiple of the lowest earner, or a new top rate of tax for those on the highest 5% or 1% of incomes.

"This is not about limiting aspiration or penalising success, it's about recognising that success is a collective effort and rewards must be shared," he said.

"We cannot have the CEO paying less tax than the cleaner and pretending they are worth thousands times more than the lowest paid staff."

Conservative Party chairman Sir Patrick McLoughlin said: "Jeremy Corbyn's day has gone from bad to worse - with his relaunch descending further into chaos.

"Today he showed that Labour simply will not take control over immigration, by saying that he doesn't rule out keeping freedom of movement.

"He suggested a new 100% tax rate, which he U-turned on within hours.

"And he told hard-pressed commuters affected by strikes that he would stand on the picket lines with the union bosses making their lives a misery.

Read more: Jeremy Corbyn pay cap calls interesting, says Scottish Labour

"Labour simply could not be more out of touch with ordinary working people."

Mr Corbyn's predecessor as Labour leader, Ed Miliband, said in a tweet: "Whatever precise mechanism, Jeremy Corbyn is totally right to be setting agenda on the crucial issue of obscene pay differentials today."