Confederation of British Industry chief executive Digby Jones said the supplementary business rates, put forward in last year's local government finance green paper, would cost firms£750m.
'Companies see supplementary business rates as nothing more than extra taxes that will damage competitiveness and deter investment. Government - at central and local level - has to show by actions, not just words, that they understand how globally mobile businesses are,' he said.
LGA finance director Neil Kinghan said the government should go ahead with its plans and eventually progress to full localisation. 'The LGA has been consistently arguing for full localisation of business rates. If that's not an option, supplementary rates will be worth having.'
The DETR said any change would be unlikely before the end of the year.