The head of the German federation of industries has claimed the British are “lost” and has thrown doubt on Berlin’s backing for a short Brexit extension, claiming an “economy can live better with bad conditions than with uncertainty”.

Dieter Kempf, the chairman of the Bundesverbandes der Deutschen Industrie, said the 100,000 companies he represents and their 8 million employees have prepared for a no-deal scenario in March, not in May.

Speaking in the wake of the British prime minister’s suggestion that the UK could request a two-month Brexit delay, Kempf told the Dutch newspaper Het Financieele Dagblad that he felt no relief at the apparent U-turn by Theresa May.

He said: “Everything is better than a chaotic Brexit. But is procrastination good? No. Uncertainty is bad for the economy. If we talk about a period of two and a half weeks, it is good if we avoid a hard Brexit.

“But what will change in three to four weeks? The British House of Commons knows very well what it does not want, but not what it wants. It cannot decide. The British are lost, they can’t find the way to the exit. That makes it difficult for a negotiating partner.”

German companies had been working on a spring deadline for their no-deal plans, Kemp said. “They have increased their storage capacity. They have planned a transition period for the reorganisation of logistics processes without loss of production. Now there would be a delay until May. What do they do then? My experience is that the economy can live better with bad conditions than with uncertainty.”

May has said that she will allow a possible extension of article 50 to be put before parliament should her deal be voted down again on 12 March.

EU leaders, including the French president, Emmanuel Macron, have insisted they will not grant a delay unless there is a clear purpose to it. Any request would require the unanimous agreement of the EU’s 27 heads of state and government.

Kempf said a no-deal Brexit would “probably cost Germany a further 0.4 or 0.5 percentage points of growth”.

But he said the deal already negotiated by the EU and the British government was “the best possible agreement for everyone involved”, adding that he had been encouraged by Jeremy Corbyn’s tentative support for a second referendum.

“Last week there was a bright spot,” he said. “The chance of a new referendum. I do not want to hide the fact that I sighed with relief when the opposition brought forward this option. This idea must come from the UK itself, not from the continent and certainly not from the Germans. That would be counterproductive.”

The Brexit secretary, Stephen Barclay, and the attorney general, Geoffrey Cox, are expected in Brussels on Tuesday.

They will continue their negotiations over a legal add-on to the withdrawal agreement, known as a “joint interpretative instrument”, putting previous written assurances over the temporary nature of the Irish backstop into legally binding language.

But the document will not satisfy the prime minister’s demands for a time-limit or unilateral exit mechanism from the customs union envisaged by the arrangement.