Two think tanks have said the financial reforms discussed by Gordon Brown at a summit of world leaders this weekend will hit Britain worse than any other country in Europe.

An analysis of the G20 meeting in Washington by the Royal United Services Institute and the Centre for the Study of Financial Innovation said the City of London would feel the brunt of reform harder than other European financial centres.

"If Prime Minister Gordon Brown is in full support of the EU's agreed position going into the G20 summit, it is not clear that the implications of these radical proposals for the City and for the UK's position in the international financial system have been thought through very carefully," they concluded.

If the tighter rules were accepted, the world would be "going a long way down a new road of regulation without presently any clarity as to the implications of such measures", it said.

The experts said that although the UK's political reputation was "riding high" after leading much of the discussion of the need for reform, "there are also a number of pitfalls and potential dangers.

"The current crisis could well result in a trade war or, at the very least, a freeze on the process of trade liberalisation. That will not be in Britain's interests."

It went on: "Talk about financial regulation is perfectly understandable but the City of London is more likely to be affected by it than any other European financial centre.

"Britain has far more to lose than any of its partners from onerous financial regulations."

The think tanks said the chances of agreement in Washington were slim, with the talks likely to "go in a number of disparate directions".

They also criticised the Prime Minister for suggesting what was needed was an up-to-date version of the Bretton Woods agreement - the global financial system set up in 1944.

Dubbing it an "unfortunate soundbite", they concluded: "Gordon Brown has opened a Pandora's Box which contains the ingredients for a very strong case that Britain and Western Europe wield too much power in the Bretton Woods institutions which still exist and that the emerging economies and poorer countries wield too little."

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