The head of the CBI has warned that a flood of companies could leave Britain to set up headquarters abroad unless Chancellor Gordon Brown cuts taxes.

CBI director-general Richard Lambert's comments were made just weeks after Lloyd's insurers Hiscox and Omega announced they were to redomicile to Bermuda because of its 0% corporation tax.

HSBC has also warned it could quit the UK to save tax.

Lloyd's chairman Lord Levene met senior financial services figures yesterday to discuss making London more competitive.

The group, chaired by Brown and made up of 32 high-profile members of the City's financial sector, met for the first time to set out plans designed to maintain the City's position as a world leading financial centre.

The level of UK corporation tax was high on the agenda.

Levene said: "I cannot promise what the result will be, but what I can promise is that the case will be fully argued."

Andrew Green, tax partner at financial adviser Mazars warned that the Treasury was unlikely to heed calls to reduce corporation tax ahead of the pre-Budget report, expected in November or December.

The Treasury has insisted that the UK has "one of the most competitive business climates in the world".