In a report commissioned by Downing Street, Lord Heseltine warns “continuing as we are is not an acceptable option. The world will not stand still – and nor must we.”

He will add: “The message I keep hearing is that the UK does not have a strategy for growth and wealth creation”.

A key element of Heseltine’s report centres on the prospect of de-regulation.

He is set to reject both de-regulation and tax cuts as ways to put the UK back on a sure economic footing. “The principal void in today’s investment climate is confidence – and tax changes will have only a limited effect on that.”

“I reject the notion that regulation in itself hinders growth. Good, well-designed regulation can stop the abuse of market power and improve the way markets work to the benefit of business employees and consumers.”

Deciding whether or not to build extra airport runways in and around London is key to Britain’s future recovery, he will say.

He has made a number of radical proposals for economic growth, including pooling £50bn of public money currently spread across Whitehall into a single pot so that it can be bidded for by “city states” and regions; and making it easier for businesses to to hire foreign graduates, especially engineers.

Rachel Reeves, Labour’s shadow chief secretary to the Treasury, said: “[This report] is a damning indictment of this government that, halfway through this parliament, a former Conservative cabinet minister is still calling for a plan for growth.”