Theresa May was told to commit to a Brexit divorce settlement within a fortnight or face a collapse in economic confidence in Britain, according to European business leaders at a confrontational Downing Street summit on Monday.

“We told them that they’ve lost a year because nothing happened. Now you have two weeks in which you have to be very clear,” said Emma Marcegaglia, president of BusinessEurope, which organised the 14-strong delegation.

“We appreciated the [prime minister’s] Florence speech but now you have to go from kind words to concrete, clear proposals,” she added, after more than an hour spent presenting their concerns to senior ministers in Downing Street.

May and her colleagues were told of specific concerns about the future of the automotive, aerospace and pharmaceuticals industries if high tariff barriers followed a hard Brexit and were presented with a CBI survey showing up to 60% of UK businesses would be forced to make contingency plans by this March.

“This is very, very bad,” said Marcegaglia, who was previously head of the Italian business lobby Confindustria. “If [businesses] don’t have certainty, they will simply go away.”

This is very urgent now,” added the CBI director general, Carolyn Fairbairn. “Firms will soon have no choice but to assume the worst in terms of planning for no deal.”

Downing Street said business leaders were told that progress was being made in the Brexit negotiations and that it shared their desire for a transition phase.

“The prime minister reassured the group that Brexit meant the UK was leaving the EU, not Europe, and reiterated her ambition for free and frictionless trade with the EU27 once the UK departs,” said a Downing Street spokesperson. “She also expressed her commitment to giving businesses the certainty they need by agreeing a time-limited implementation period as soon as possible.”

But those present at the meeting said participants were frustrated at the apparent lack of urgency.

Danny McCoy, the chief executive officer of Ibec, Ireland’s equivalent of the CBI, said its message to May was clear: “Business is increasingly frustrated and concerned at the lack of progress in negotiations. To move past the first phase of talks, which covers Ireland, the financial settlement and citizens’ rights, we need practical solutions and firm commitments, not just rhetoric.”

Speaking after the meeting, McCoy urged the government to stop treating Brexit like an opportunity for short-term gain and to focus on the long-term consequences.

“The polarised and fraught nature of the British debate is not conducive to the sophisticated compromises needed to steer the country away from a divisive, damaging divorce.”

Marcegaglia also said she saw little sign of movement by the British government, which did not mention the divorce bill and called instead for more movement from EU governments to clarify what they want.

“I am naturally optimistic otherwise I wouldn’t be a businesswoman but I didn’t really see any signal that they will change,” said the president of BusinessEurope.

Fairbairn said: “With UK-EU trade worth more than €600bn (£534bn) each year, business groups from across Europe used today’s meeting with the prime minister as a welcome opportunity to highlight the mutual importance of seeing real progress before Christmas.

“All business organisations present reiterated the damage a ‘no-deal’ scenario would do to trade,” she added. “While businesses welcomed the prime minister’s Florence speech, we now need to move beyond warm words if jobs, investment and living standards are to be protected.”

Business leaders also said they were concerned that any transition phase needed be longer than UK was proposing.

“One of the main concerns of the business community was to clarify the importance of a transitional phase for the continuity of business relations,” said Joachim Lang, the chief executive of Germany’s BDI. “Businesses’ idea of a transitional period differs from that of the British government. Two years is not enough to create the necessary legal framework.”

Ulrich Hoppe, the managing director of the German-British Chamber of Industry and Trade, said bosses had made clear to May their feelings about the prospect of a no-deal.

“To have an end without a deal would be fatal for the economy,” Hoppe said. The car and chemical industries would be most badly hit, Hoppe said, as well as any other industries which export to Britain. Hoppe described the Downing Street meeting as May “taking the bull by the horns”.

Martin Wansleben, the CEO of DIHK, the German chamber of trade and commerce, said a Brexit without an agreement would have “grave consequences for German industry”.

“Brussels is now really putting the pressure on by giving Britain an ultimatum because the sixth Brexit negotiating round has come to an end once again with no really discernible progress having been made,” Wansleben added.

Wansleben told Die Welt German industry faced considerable customs tariffs mounting to billions of euros a year if trade between Britain and the UK were to take place under WTO guidelines.

“In the motor industry sector alone the export of motor vehicles will cost €2.35bn extra in tariffs,” he said. Last year Germany exported cars to the value of €20.8bn to Britain. The chemicals and pharmaceutical fields would accrue more than €11bn of tariffs on the €200bn of goods it exports to the UK every year.

“The figures serve to underline the importance of a common single market as well as the free traffic of goods for the German economy,” Wansleben said. “What we need are quick solutions, because the UK cannot be allowed to cherry pick.”