London Mayor Boris Johnson has vehemently denounced "deluded" and "self-defeating" EU plans to cap bankers' bonuses.
At talks in Brussels last night between the European Parliament, the Commission and representatives of the member state governments, it was agreed that bonuses should be limited to one year's base salary.
The deal - which must now be approved by EU ministers - was seen as a defeat for Britain, which had strongly opposed the cap.
Johnson warned that it would simply play into the hands of the City of London's overseas rivals, while undermining support for the EU in Britain.
"People will wonder why we stay in the EU if it persists in such transparently self-defeating policies," he said.
"Brussels cannot control the global market for banking talent. Brussels cannot set pay for bankers around the world.
"The most this measure can hope to achieve is a boost for Zurich and Singapore and New York at the expense of a struggling EU.
"This is possibly the most deluded measure to come from Europe since Diocletian tried to fix the price of groceries across the Roman Empire."
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