Britain will not sign up to more stringent European banking regulations due to the fact they are fundamentally flawed.
Chancellor George Osborne has rejected the idea that the UK will be part of the forthcoming Basel III rules on the grounds they will not achieve greater stability in financial markets.
Under the terms of these regulations - which will come into force from January next year - banks will have to increase their core tier 1 capital ratios to seven per cent from 2019.
This measure is intended to make sure financiers' balance sheets will always be healthy enough to avoid the possibility of them needing bailouts, even if another financial crisis was to occur.
However, during a meeting with fellow senior ministers from across the continent, Mr Osborne - who is also MP for Tatton - dismissed this idea as "idiotic" and insisted it will be rejected by banks.
"We are not implementing the Basel agreement as anyone who will look at this text will be able to tell you," he noted.
By Claire Archer