But the EC still aims to reach agreement this year on its plans to bring in a Europe-wide savings tax. At an informal meeting of finance ministers in Finland yesterday, the Commission said that a long-awaited paper drafted by the Chancellor that spelt out the proposed tax exemption for the UK's Eurobond market "cannot be accepted as such".
But Mario Monti, outgoing Commissioner for the Internal Market, highlighted a commitment made by the 15 finance ministers to reach a deal by the Helsinki summit in December.
Mr Monti argued that the paper now presented a valuable document on which to negotiate. He added that this had "re-launched the process because of the input and clarity of the paper".
The UK is determined to get an exemption from the proposed "witholding tax", a 20 per cent Europe-wide tax on non-resident savings. The new tax is aimed at ending a tax dodge that allows the well-off to move cash about between different European countries without paying any capital gains tax.
But any move to impose this tax would jeopardise the Eurobond market. City estimates suggest up to 11,000 jobs could be lost, and the market would almost certainly move outside the EU, probably to Switzerland. They are mindful of what happened in New York, which dominated the Eurobond market until a new tax regime there drove most of the dealers to London.
The meeting was dominated by the Eurobond issue. Mr Brown faced acute criticism from fellow finance ministers - first for the delay in tabling his document, then over the extent of the exemptions the UK is demanding.
Mr Brown's document, the product of several months' negotiation with the City, was devoted to defining ways of exempting the "wholesale" market in Eurobonds, which finance ministers believe should be protected in principle .
The Treasury last night made it clear it will negotiate on the technical detail but not the general principle. Gordon Brown said: "We will not back down on the proposition that the Eurobond market must be protected. We are winning the argument."