The country's new chancellor George Osborne is in Brussels to debate the measures, which will require hedge funds to hold more capital and adhere to EU rules if they are operating inside the bloc's boundaries.
But it is unlikely he will be able to defeat the plans, which officials from Germany, France and Spain are determined to push through, reports the Guardian.
It is hoped that the legislation, which would probably come into force from around October 2010, would stop a repeat of the situation in Greece, where speculators have contributed to a worsening of its financial crisis by betting against its economic viability.
Elena Salgado, Spain's finance minister said: "We will approve regulation on hedge funds â I think this will all contribute to more stability."
US Treasury secretary Timothy Geithner has protested against the proposals in the past few months, stating that there should be a global consensus on hedge fund regulation rather than it being done on a regional basis.
By Asim Shah