The study found that 56% of companies planned to pay a seasonal bonus, up from 49% last year.

Of those doing so, 81% said it would be at least as much as last year, with only 6% saying that staff would collect a smaller bonus than they did in 1996.

The chamber's chief executive, Simon Sperryn, said: "For many companies, especially in London, paying a decent Christmas bonus is simply one essential component of any successful staff retention strategy.

"It seems that many firms now recognise this as they seek not to lose top staff to competitors.

"It is no surprise that those paying higher bonuses will often be the larger finance companies who have done so well this year.

"If anything, these results underestimate the bonus culture in the City because some firms pay bonuses at other times of the year, so we are only recording those who pay their bonuses at Christmas."

He said that many firms found it increasingly important to hold on to skilled staff, such as computer personnel, as they prepared for the introduction of the single currency and the 'millennium timebomb'.

"Firms' generosity this year is yet further evidence of the labour market tightening," he said.

London Chamber questioned 140 businesses for its survey.