A survey by the London Chamber of Commerce and Industry found that London is still a key location for firms wishing to conduct international business.

Telecommunications infrastructure, depth of financial markets, availability of a skilled workforce and political stability were the most important factors when determining a foreign bank's location, according to the survey.

The LCCI report, based on a poll of 100 foreign banks in the City of London, revealed that concern over the UK's level of involvement in monetary union ranked way down the list of importance.

Currency warning

However, 42% of staff who took part in the survey said that if the UK stayed out of the single currency forever it would eventually detract from London's competitiveness.

Simon Sperryn, chief executive of the London Chamber of Commerce, said: "London's inherent strengths are more than sufficient to overcome any problems caused by the UK's non-participation in the single currency.

"However we are not complacent about London's position as Europe's leading financial centre.

"There is fierce international competition for the number one position in global finance and we need constantly to be aware of those factors which those investing in London tell us need improvement."

Potential drawbacks to locating in London were office rental levels, labour costs, over-regulation, poor road and rail links and underinvestment in local transport.

But according the LCCI that has not deterred the 585 foreign banks currently operating in the City - 200 of which have opened in the last two years.