By Simon Miller

Germany and France have written to the European Council President Herman Van Rompuy calling for a Tobin tax.

In a move that will increase domestic political pressure for UK Prime Minister David Cameron, the German Chancellor Angela Merkel and French President Nicolas Sarkozy went beyond the proposed treaty changes announced on Monday.

They called for a new EU fast track for progress on creating a financial transaction tax, a common corporate tax base and labour market regulations.

In addition, the framework should also cover financial regulation, growth supporting policies and more efficient use of European funds in the euro area.

The letter said: "A new common legal framework, fully consistent with the internal market, should be established to allowing for faster progress in specific areas."

The letter will increase pressure on Cameron who has so far said there was no need for a referendum in the UK as no powers had been taken from the UK.

However, the blatent stepping over UK "lines in the sand" will make it harder on the Prime Minister who had threatened to veto the treaty changes in an article in The Times this morning.

Cameron is not only facing pressure from backbenchers but also from his own cabinet where Secretary of State for Work and Pensions Ian Duncan Smith and Northern Ireland secretary Owen Patterson have both said a referendum was unavoidable.

In addition, the London Mayor Boris Johnson has also echoed their calls saying that Europe had long been jealous of the City's financial status.

He told Radio 4's World at One programme: "It's absolutely clear to me that if there's a new treaty at 27, a new EU treaty, that creates a kind of fiscal union... then we'd have absolutely no choice either to veto it or put it to a referendum.

"The real problem we've got now is that everybody is desperately scrabbling around to try and patch this thing together and to keep the euro in its current form whole and entire, and not to let anybody escape, not to let anybody devalue and to use the rather graphic phrase of someone the other day, I think we're in danger of saving the cancer and not the patient."

Van Rompuy will be chairing a meeting of the 27 EU leaders on Friday following talks with the 17 eurozone members.

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