Europe's plan for a financial transaction tax is "a bullet aimed at the heart of London", Chancellor George Osborne warns today.
In his most outspoken rejection yet of the plan, he said it would be "economic suicide" for European countries to allow rivals such as China and the United States to undercut them.
"Europe certainly shouldn't be creating new burdens," he writes exclusively in today's Evening Standard. "Proposals for a Europe-only Financial Transactions Tax are a bullet aimed at the heart of London. Even the European Commission admit that it would cost hundreds of thousands of jobs."
The FTT has been proposed formally by Brussels to help raise money for a eurozone bailout, backed by France and Germany. A study by the commission claimed it would raise up to £35 billion in revenues and cut derivatives trading.
However, no other major economic zones plans to adopt the idea and Mr Osborne went on: "The ideas of a tax on mobile financial transactions that did not include America or China would be economic suicide for Britain and for Europe. The EU should be coming forward with new ideas to promote growth, not undermine it."
The Chancellor also criticised the 17 single currency country leaders for failing to decide how their bailout fund will work, saying that "some progress but not enough" had become "the recurring pattern of this crisis". He said the 17 must surrender "a big loss of national sovereignty" to achieve stability in future.
The controversy comes two weeks ahead of the Chancellor's new growth strategy which, his article confirms, will contain plans to lever "billions of pounds of private sector investment into vital infrastructure projects" in a bid to create jobs.
This could amount to a £50 billion housing and road-building boom, plus power stations and super-fast broadband. Mr Osborne also revealed he will unveil new to housing and small business lending. However, he said what the economy really needs is "a resolution of the eurozone crisis".
There was relative calm in the markets today as Italy began forming its new government under former European commissioner Mario "Super Mario" Monti.
