NOW EU WANTS TO GRAB CONTROL OF BRITISH BANKS

DAVID Cameron was facing a new showdown with the European Union last night after ambitious plans for Brussels to seize control of Britain’s banks were revealed.

European Commission President Jose Manuel Barroso called for all 27 EU nations to join a Europe-wide “banking union” with powers to ­regulate the financial institutions.

It could see British taxpayers’ cash used to help guarantee bank deposits across the EU, while a swingeing new finance tax could hammer the City of London.

And Mr Barroso called for the EU to take “a very big step” towards ­further integration without holding referendums in member states.

The move to give the Brussels bureaucracy more power outraged Eurosceptics and City chiefs yesterday, while Downing Street officials made clear that the Prime Minister would resist any attempt to include the UK in the new banking bloc.

“Britain will not be involved,” said a Number 10 spokeswoman.

In an interview, Mr Barroso said: “There is now a much clearer awareness among European member states about the need to go further in terms of integration, especially in the euro area. This is one of the ­lessons of the crisis.”

His proposals included an EU-wide deposit guarantee scheme to prevent bank runs. This could see British taxpayers liable for banking crises anywhere in Europe. He also wants a supervisor with powers to wind down banks and impose losses on bondholders without the approval of national authorities, plus a bank rescue pot funded by a levy on financial institutions.

Senior Tory MP Peter Bone said: “The political elite of Europe are completely barking and out of touch with ordinary citizens. The sooner the euro collapses and the European Union breaks up, the better.” At least Mr Barroso was “being honest,” said Mr Bone.

“He wants a European super state. He wants an economic government and a centralised financial system run by Brussels. He is now being open about something many of us have been warning about for years.” Angela Knight, chief executive of the British Bankers’ Association, said the proposal would be “received with some concern” in the City.