The chancellor’s proposed tax on bankers’ bonuses could infringe workers’ human rights.
But the attorney general Baroness Scotland is said to have told the Treasury team that if a case was brought against the new tax, the government would lose.
Some senior bankers have said they are consulting lawyers to see whether there was potential for a legal challenge against the tax, the Times reported.
Treasury lawyers decided to exclude guaranteed bonus payments from the tax to lessen the human rights challenge and to avoid accusations that the government was undermining contract law.
Up to 20,000 financiers will be caught by the levy, which takes immediate effect.