Britain has been warned by a senior ally of German Chancellor Angela Merkel that it would not "get away with" looking after its own interests at the expense of Europe.

Volker Kauder criticised the coalition government's opposition to a financial transaction tax, insisting the UK had the responsibility for "making Europe a success."

His comments will ratchet up tensions between London and Berlin ahead of a meeting between Prime Minister David Cameron and Merkel on Friday.

Chancellor of the Exchequer George Osborne warned yesterday that a Europe-only financial transaction tax -- also known as a Tobin tax or Robin Hood tax -- would be "a bullet aimed at the heart of London."

He said it would be "economic suicide" for the EU to impose the tax unilaterally, giving a massive advantage to rivals like the U.S. and China.

"I can understand that the British don't want that when they generate almost 30 per cent of their gross domestic product from financial-market business in the City of London," Kauder responded. "Britain also carries responsibility for making Europe a success. Only being after their own benefit and refusing to contribute is not the message we're letting the British get away with."

Kauder, parliamentary leader of Merkel's conservative Christian Democrats, was addressing a party's congress.

He also said Europe was falling in with Germany's approach as it tackled the economic crisis.

"Now all of a sudden, Europe is speaking German. Not as a language, but in its acceptance of the instruments for which Angela Merkel has fought so hard, and with success in the end," Kauder declared.

Cameron was hit by a rebellion of 81 Tory MPs demanding a referendum on British membership of the EU last month.

A financial transaction tax has been proposed by the European Commission to help raise money for a eurozone bailout. Brussels believes it could raise up to £35 billion.

But, according to the Evening Standard, Osborne said: "The idea of a tax on mobile financial transactions that did not include America or China would be economic suicide for Britain and for Europe. The EU should be coming forward with new ideas to promote growth, not undermine it."

China London