A number of meetings are believed to have recently taken place between Mr Sarkozy and banking chiefs, where the French leader has offered tax incentives to encourage organisations to leave the UK.
The tax breaks offered to leading banks are believed to be as long as 20 years in return for the relocation of their business base.
An unnamed banking head told the Sunday Times: âFinance ministers from a number of big European countries have made it clear that we can have whatever we want, whatever it would take to get us to move our headquarters.â
The news follows reports of many leading banks being unhappy at a series of taxes the UK authorities have levied.
Alistair Darling, the previous chancellor of the exchequer, introduced a one-off 50 per cent tax on banker bonuses above Â£25,000.
The current government has launched a consultation on the implementation of a further tax on the balance sheets of financial institutions.
By Jim Ottewill