As a result, important projects such as Kai Tak, West Kowloon and Tamar were being stalled and investors discouraged.

Mr Cheng's criticism comes two weeks after New World and partner Sun Hung Kai Properties abandoned plans to convert flats in the controversial Hunghom Peninsula estate into luxury apartments, saying the premium was too high.

His remarks also come amid pledges by Chief Executive Donald Tsang Yam-kuen of 'strong governance' and a determination to press ahead with plans to move government headquarters to Tamar in the face of public opposition.

Mr Cheng also cited what he said was government rigidity in approving commercial makeovers, such as the establishment of restaurants and shops at New World's ferry piers in Central.

'We don't see why government officials take such a long time to approve the plans when there is already a Star Ferry terminal as a showcase example,' he said.

The lack of a development plan for the former Kai Tak site eight years after the airport closed was a 'waste of resources'.

'Many [investors] reckon today's investment climate is souring,' he said. 'That will hit the entire investment climate.'

On property, Mr Cheng said the local market still lacked strong momentum because of the uncertain interest rate outlook.

'Until there is a clear picture on interest rates, homebuyers are likely to be cautious about jumping into the market,' he said.

Mr Cheng's comments come amid a weakened primary market. Sales of new projects over the weekend fell to about 30 units, from 57 the weekend before.

Sales in the secondary market also dropped, with the number of transactions in the top 35 housing estates falling 11 per cent to 154, after 173 the previous weekend, according to figures from Midland Realty.

Residential prices rose 2.15 per cent in the first three months of this year, according to the Centa-City Leading Index.