TOURISM has fallen "victim" to a Government obsession with bailing out failing industries like manufacturing, warns the head of British Tourism Week.

Bernard Donoghue, who is also head of Government affairs at VisitBritain, said ministers should reverse cuts to the agency's budget or risk not reaping the estimated £2.1 billion benefits of the London Olympics in 2012.

In the Saturday Interview, he says tourism as the fifth largest industry is "significantly more important than some of the manufacturing or agriculture or retail that we have in this country".

Click here to read Matt Chorley's latest blog

But he says too often Whitehall "only ever usually bails out failing industries, it doesn't invest in successful ones".

"We think we have been a victim of that kind of thinking. We would still claim that actually if you want to propel yourself out of recession, you should invest in tourism to create jobs rather than cut back."

This week, Business Secretary Lord Mandelson announced that the Government would provide £360 million in loan guarantees to American car giant Ford and £20.7 million backing Nissan's plans for an electric car.

The Government has also been urged to intervene in the closure of Cadbury's plants after the takeover by US firm Kraft, in the latest call for ministers to block jobs being lost overseas.

But Mr Donoghue tells the Western Morning News: "Tourism, unlike manufacturing or IT or hedge funds or banking or even now Cadbury's, cannot be outsourced and it can't be off-shored.

"The Lost Gardens of Heligan or the Eden Project are not going to be outsourced to Singapore or Bangladesh any time soon.

"So tourism is therefore one of our most sustainable industries, in both sense of the word – it is both green and also permanent."

According to research into VisitBritain's work, every £1 it spends is worth £14 to the British economy in attracting foreign tourists and persuading Brits to holiday at home.

However, the Department for Culture, Media and Sport has overseen a 20 per cent in the agency's budget since 2007.

Instead, investment in the industry, including a major marketing drive to capitalise on the global exposure of the Olympics, could bring almost instant benefits, particularly to tourism-dependant areas like the Westcountry.

"In areas like Devon and Cornwall, tourism can create jobs at all skill levels in all parts of the counties quicker than any other part of the economy," says Mr Donoghue. "Because it immediately responds to consumer demand and therefore, as long as you inspire people to travel to the Westcountry, jobs can be created pretty much almost instantly."

Mr Donoghue calls for a "single one-off pot purely for the promotion of the Olympics and Paralympics" to be created by the Government, which would be match-funded by the private sector.

Labour ministers have played down calls for more investment to capitalise on the Olympics.

But in a speech last week, Shadow Chancellor George Osborne pledged to "establish a fund to market London and British tourism around the world".

"Our aim must be to seize this once-in-a generation chance to inspire people across the world to visit not just London, but the whole of the country," he said.

- Read the Saturday Interview only in today's Western Morning News