Business and green groups say outgoing chief executive Donald Tsang has failed to address a problem that costs an estimated $6 billion each year, according to health experts, with air quality in the former British colony now among the worst in Asia.

Newspaper vendor Chung Tang, 74, knows just how bad it can be, working all day at a bus stop in Sheung Wan, a busy neighbourhood next to the Central business district where pollution-free trams trundle along metal rails, between the cars and buses, just as they have done for more than 100 years.

"They always say you should turn off the engine when you stop a car," he said as a bus spewed a trail of grey exhaust. "It's all just advertising. Do they implement it? Do they punish people? Not at all."

Tang was referring to a government measure to ban idling engines on streets, especially in densely populated pockets of Hong Kong island, like Sheung Wan, where narrow, poorly ventilated streets help concentrated emissions collect.

Concerns over air quality cropped up long before Tsang came to office in 2005. Five years earlier, legislators and environmentalists had voiced concerns about nightly fireworks at Hong Kong's Disney theme park on the rural outlying island of Lantau adding to the problem.

Halcyon days. Now, a blanket of haze at times shrouds the view even from the hills of leafy Lantau. Sometimes it is almost impossible to see one of the world's most spectacular sights, the concrete, steel and glass jungle of the skyscrapers on Hong Kong island, from just across the harbour in Kowloon.

"The air quality is so poor that I had to change my long-term intentions of working and living here and relocate to a country or city where I can breathe properly again," said a senior executive at a European bank, who developed asthma within weeks of moving to Hong Kong and is now thinking of moving to clean and green Singapore.

"CLEAN AIR FOR A COOL HONG KONG"

The think tank Civic Exchange attributed 7,240 premature deaths and over half a million avoidable hospital bed days from "persistently poor air quality" during Tsang's seven years in office.

Tsang steps down on Sunday, the 15th anniversary of Hong Kong's return to Chinese rule. In 2006, he pledged to bring back blue skies with the quip "Clean Air for a Cool Hong Kong!"

"Under the current administration, the targets have been weak and delayed, and fairly unhelpful in driving change," said Mike Kilburn, an environmental expert at Civic Exchange.

Nearly a quarter of businesses polled by the American Chamber of Commerce say they experienced difficulties in recruiting professionals last year due to environmental concerns.

The pollution comes largely from coal-fired power stations and traffic, though a significant contribution wafts down from the tens of thousands of factories in China's neighbouring manufacturing heartland of the Pearl River Delta.

Roadside nitrogen dioxide hit record levels last year, though regional levels of sulphur dioxide and suspended particulates have been reduced over the past decade.

"(Hong Kong) wants to be a world city, it should not be content being just as good as Chinese cities. It should be on par with London and New York," said Kristian Odebjer, vice chairman of the Swedish Chamber of Commerce in Hong Kong.

Under intense lobbying, the government has been gradually tightening its air-quality objectives and monitoring measures to meet World Health Organisation standards, but these remain far short of global guidelines, green groups say.

Even mainland China, home to some of the world's most polluted cities, released air-quality objectives early this year that were far more stringent than Hong Kong, but it has so far failed spectacularly to solve the problem, even in the capital, Beijing.

With a new airport runway planned at Hong Kong's Chek Lap Kok airport, adjoining Lantau, along with a sea bridge bringing heavy freight and vehicle traffic from Zhuhai and Macau, environmentalists and business chambers say Hong Kong is running out of time.

"In Singapore, when the government makes long-term plans for the economy, environmental performance targets are well defined for each business sector. Contrasting this to Hong Kong, what we really need is policy that is holistic, decisive and long term," said Evan Auyang, environment steering group chairman at the American Chamber of Commerce in Hong Kong.

Hong Kong authorities say measures are in the works including weaning power stations on to cleaner natural gas, replacing old bus engines and tightening standards for new vehicles, tasks which will be a high priority for new leader Leung Chun-ying.

Guangdong province in southern China, Hong Kong and Macau have reaffirmed a commitment to bolster co-operation, monitoring and tackling of pollutants. But critics say the promises are mere words.

"Both China and Hong Kong are involved in too much talking, but it's never enforced with fines to factory owners," said Hak Kan Lai, an environmental expert at the University of Hong Kong.

"There's no reason for us to neglect this problem," said Andrew Lai, a deputy director of the Environmental Protection Department. "We're all living in Hong Kong, we breathe the same air. We're concerned, I'm concerned. There's always room to do more." (Additional reporting Stephen Aldred, Tan Ee Lyn and Clarie Lee in Hong Kong; Editing by James Pomfret and Nick Macfie)

• A Permanent Economic Emergency