By Alex Stevenson Follow @alex__stevenson
Britain will have to negotiate with the EU over a range of rules threatening the City in spite of David Cameron's veto, Vince Cable has warned.
The Liberal Democrat business secretary only offered lukewarm support for the "whingeing" City in an article in the Guardian newspaper, however.
He wrote that the voting system for single-market rules was unchanged by Britain's veto on fiscal integration plans - and that current proposals including restrictive solvency rules for institutional investors threatened the UK economy.
"In a calm, un-politicised environment, all of these issues could be negotiated through qualified majority voting, as they have been in the past," Mr Cable wrote.
"It is also unavoidable, since the veto hasn't changed the voting system for single-market rules."
The Lib Dems have been the most hostile party to the City since before the general election and last week made clear their frustration with Mr Cameron's negotiating strategy in the Brussels summit.
Mr Cable appeared to distance himself from Lib Dem hostility over the issue, playing down the significance of the financial transaction tax which prompted Mr Cameron's veto.
He said it had generated "much phony emotion", implicitly criticising the prime minister, before highlighting its impact on Britain and concerns about it.
"It is in reality a cynical raid on UK financial services – or, more likely, the consumers of them – to fund the EU budget. A perverse Robin Hood tax levied on the people of Nottingham to pay King John," he wrote.
"This tax has however never been a serious threat to the City since taxes are governed by unanimity. There is scope for taxing banks more like the bank levy we have introduced."
Mr Cable concluded by calling on politicians to "put the whingeing of the City to one side", instead concentrating on rebalancing the UK economy towards higher education, creative industries, advanced manufacturing and professional services.
"The bankers don't speak for Britain; the coalition will not put their interests above the rest of the country," he concluded.
Yesterday Britain refused to participate in extra IMF funding to bolster the eurozone - the latest in a series of negotiations which will take place throughout next year as the crisis develops.
Shadow chancellor Ed Balls told the Independent newspaper he felt 2012 will be "the most dangerous year in my life", predicting that the short-term attitude of European leaders risked a "massive catastrophe" on the continent.
"This is about leadership. They have got to act and they can't," he said.
"It is existential... when it happens there will probably be a crisis moment that puts things into deep freeze, making it hard to trade and hard to finance... the impact on growth and jobs is really dangerous."
Mr Balls raised eyebrows by saying he would enter into a coalition with Chris Huhne and Mr Cable "tomorrow", in an unusually strong appeal to the Liberal Democrats.
"They have got to decide whether they want to serve in a Lab-Lib Cabinet which is trying to protect the NHS, keep us a robust defender of the national interest in the EU and get unemployment down, or whether they are willing to go along with what they now find themselves bound into," he added.
"As they sit there over Christmas and reflect what they are in politics for, there is a better way than this."