UK-listed brokerage firm ICAP will leave the European Union if a financial transactions tax proposed by Germany and France takes effect across the bloc, the company's chief executive has told the Independent on Sunday newspaper.

"Companies like ICAP will simply move elsewhere outside the EU if Nicolas Sarkozy and Angela Merkel push ahead with this silly tax," ICAP chief executive Michael Spencer said.

The French and German leaders had proposed a transactions tax last week as part of measures designed to shore up the eurozone. The tax is sometimes known as a “Tobin tax” as it is named after James Tobin, the economist, who had proposed such an idea. Opponents say banks and other institutions will merely pass on the costs to end-consumers in the form of lower savings interest, higher charges and rising borrowing costs.

Spencer, who has been a major donor to Britain's ruling Conservative Party, said that financial firms would relocate to New York and Singapore if such a tax came into being.

"This is another cynical threat by Sarkozy who knows this tax would overwhelmingly hit London as this is where trillions of dollars are traded each day," he said. "It could only work if adopted globally,” he said.