Executive pay has grown from 60 times that of the average worker to almost 180 times since the 1990s, according to a new report.

The Government was urged to take "radical action" to close the gap, such as requiring firms to cap executive pay at a fixed multiple of their lowest paid employees.

The High Pay Centre think tank said shareholders were still backing executive pay policies despite being given the power to vote them down at annual meetings.

The pay of the average FTSE 100 chief executive increased from £4.1 million to £4.7 million last year, said the report.

The think tank said trust in business was being damaged by the perception that an executive "elite" were reaping all the rewards from economic growth.

High Pay Centre director Deborah Hargreaves said: 'It's time to get serious about tackling the executive pay racket. The Government's tinkering won't bring about a proper change in the UK's pay culture.

"We need to build an economy where people are paid fair and sensible amounts of money for the work that they do and the incomes of the super-rich aren't racing away from everybody else.

"A maximum pay ratio would recognise the important principle that all workers should share in a company's success and that gaps between those at the top and low and middle earners cannot just get wider and wider."

A Business Department spokesman said: "The Government has introduced comprehensive reforms to give shareholders more powers in order to restore the link between top pay and performance, which in recent years has become excessive and increasingly disconnected.

"We've seen chief executive pay increase substantially over the past three decades, with CEOs earning 139 times the average employee in 2011, up from 47 in 1998. It's only in the last few years that we're beginning to see more restraint applied."