The country is not keeping pace with others that have cut business taxes, spent more on infrastructure and improved their schools and universities to drive growth at a time of increased competition and worries about global output, IAG Chief Executive Willie Walsh said on Thursday.

"We don't have a single plan for growth. We have one every other week," Walsh said in a speech to the annual conference of the British Chambers of Commerce, a business lobby group. "The words are always warm, but they go cold waiting for action."

Britain's GDP contracted by 0.2 percent in the last quarter of 2011 and the government is facing calls to do more to boost growth in its budget announcement next week. Fitch warned on Wednesday that its top credit rating is at risk due to weak growth and high public borrowing.

Walsh and his IAG group (ICAG.L), which also owns Spain's Iberia, has been lobbying the British government to support the expansion of the UK's airport capacity.

Prime Minister David Cameron's coalition government said in 2010 that it would not allow a third runway at London's Heathrow Airport. There has been a long debate over how to expand the country's airports in the face of fierce opposition from green groups and people living near the sites.

Walsh said Britain's aviation policy was in an "unholy mess". Heathrow is full and Gatwick, south of the capital, is operating at full capacity at peak times. London Mayor Boris Johnson's idea for an airport in the River Thames estuary, east of London, is unlikely to ever see the light of day, he added.

"If we do not have a hub airport that links us directly to world growth, we will suffer for it," Walsh said. "Britain is confronting this prospect without boldness, courage or clarity."

Walsh said the government must do more to encourage better aviation links with fast-growing China and cut the cost of visas for Chinese visitors to Britain.

"We only connect to three cities in China from Heathrow," he said. "It is as if China were standing still. This will show up on the balance sheet of this country very soon."

(Reporting by Peter Griffiths; Editing by Erica Billingham)

• A Permanent Economic Emergency