Vince Cable is a "socialist" who has blocked action to liberalise employment laws that could give a £50bn boost to the economy, according to a Tory donor who wrote a controversial report on cutting red tape.

In a sign of some Tories' deep frustrations with the coalition, Adrian Beecroft also accused the Liberal Democrat leader and deputy prime minister, Nick Clegg, of blocking reforms by issuing a "hollow threat" to "go nuclear" and bring down the government.

Beecroft, a venture capitalist, who also comes close to accusing the prime minister of withdrawing support for his departing policy guru Steve Hilton, hit out in interviews with the Daily Mail and Daily Telegraph.

His intervention came after Clegg said he had never supported Beecroft's proposal to allow no-fault dismissals, to boost business. Government sources indicated that David Cameron would quietly shelve the plans which Beecroft said would promote economic growth by encouraging companies to hire more staff.

Beecroft claimed that Cable, the business secretary, who described Beecroft's plans as "bonkers", objected to his proposals on "ideological not economic" grounds. He told the Telegraph: "I think he is a socialist who found a home in the Lib Dems, so he's one of the left. I think people find it very odd that he's in charge of business and yet appears to do very little to support business."

Clegg said on Tuesday that he had always opposed no-fault dismissals because it would be wrong to create "industrial-level insecurity".

"Nick Clegg is always threatening to go nuclear and dissolve the whole thing if he doesn't get his way with this, that and the other," Beecroft said. "Which you'd think actually must be a hollow threat. Therefore, why can't the government be more robust? I don't know what the answer is. But it is disappointing."

Beecroft criticised Cameron for having "given up" on his proposals after senior Tory sources indicated that the prime minister hoped to shelve the plans quietly. "I do think it is disappointing that they appear to have given up on unfair dismissal," he told the Daily Mail.

He told the Mail employers experience "endless frustration" in dealing with underperforming employees, and indicated that Cameron has let down his policy guru who is embarking on a year long sabbatical to the US. He said some Tories have been very supportive of his plans.

Beecroft, who said a failure to introduce his plans could hold back economic growth by £50bn, told the Telegraph: "I'm talking about Steve Hilton, that group and they assured me that David Cameron wanted to do the whole thing. Whether that's right or not I'm not sure but that was the strong impression I got. I've been in meetings with Oliver Letwin and Ed Davey, where Oliver Letwin was all for and Ed Davey was totally against."

He added that his plans prompted a row at the highest levels of the coalition. "There was a large argument which I'm told ended up in the 'quad' [the group composed of Cameron, George Osborne, Nick Clegg and Danny Alexander] when they're sort of trading off one policy against the other."

Clegg also found himself accused of being leftwing when public school headteacher Tim Hands accused him of adopting "old-style communist" tactics in his drive to improve social mobility.

Tim Hands, master of the private Magdalen College School in Oxford and chair elect of the Headmasters and Headmistresses's Conference, which represents elite private schools, accused the deputy prime minister of an "old-style communist creation of a closed market, to try to deal with the problem after the event".