Business welcomed yesterday's shake-up of the muchcriticised planning system.
It needs to be more flexible and responsive, a Treasury-commissioned report from Bank of England Monetary Policy Committee member Kate Barker said.
In her interim response, immediately criticised by environmentalists, she argued the need to reflect the changing global economy.
Chancellor Gordon Brown has said that he wants to introduce legislation by the end of the year.
Businesses argue that bureaucratic delays in getting planning permission for new projects are holding them back from making new investments despite past government attempts to speed up the process.
New gas storage facilities continue to be blocked by local planning authorities, while the difficulties in getting approval for new nuclear power stations threaten to make their cost prohibitive.
Pfizer, the world's largest pharmaceuticals group, is said to have abandoned a plan to locate its European headquarters in Britain because of planning constraints, opting for Germany instead.
Director general of the British Retail Consortium Kevin Hawkins said: "Property development and redevelopment is vital to future retail jobs, growth and innovation.
"While proposals for minor alterations may be dealt with within eight weeks, regeneration projects that offer huge social and economic beneifts can disappear into the planning black hole for years, held up by appeals, delays and inquiries.
"Kate Barker rightly recognises this restrictive regime has made UK retail property the most expensive in the world. It has already forced many retailers out of business."
Richard Lambert, CBI director-general, said: "Kate Barker has held the planning system up to the light and found it wanting.
"A clear, fair and democratically-accountable planning framework is vital in creating sustainable communities on a small and crowded island. But the current planning regime is serving neither the economy nor the nation as well as it should.
"For many businesses seeking to expand or locate in the UK, planning is still far too complex and slow. Appeals take too long and there is concern that sometimes applications are rejected simply to meet Government targets.
"Under the current regime big, complicated projects can be very difficult to get off the ground. Where there are major projects essential to the future of the UK, such as power stations and transport infrastructure, there must be a better balance between local interests and national need.
"For the majority of applications, business does not want the Government to scrap the whole system and start again."