Brussels is to curb bankers' bonuses from next year in a major blow to the City and the government.
Britain was the only EU member to oppose the plan, supported enthusiastically by France, which is likely to give a competitive edge to New York and Hong Kong over the Square Mile, the Times reports.
It also creates a political headache for David Cameron and his Chancellor, George Osborne, who risk unpopularity if they are seen to defend multi-million-pound payouts for bankers so soon after the financial crash.
