He dismissed concerns that London could face an exodus of bankers over the tax, reiterating that the levy would be for one year only.

"London is still a good place to do business, and it's important that it remains a good place to do business," he told the Financial Times in an interview.

"I think we have a critical mass here that you can't find in other parts of the world, and I'm determined that it remains that way."

He said it was important that changes in banking regulation designed to prevent a repeat of the global financial crisis did not adversely affect London.

"We have a lot to gain if we get this right, and I think, I am determined to be at the forefront of the efforts to make sure that we protect and enhance London's reputation," he said.

"I want London to remain the world's leading financial centre ... everybody knows that we need to make changes, but we need to make sure that the changes actually work."

He said he was concerned that some banks outside Britain had yet to fully take account of "toxic assets" in their balance sheets.

"I'm not going to name names of institutions, but you still get every now and again banks in different parts of the world suddenly realising they haven't quite got the provision they might do."

"One of the many lessons from all this is that if you've got a problem, it won't go away by ignoring it."