Chief executives of City of London banks are under pressure to make their opposition known to Chancellor Gordon Brown over the proposed Regulation of Investigatory Powers bill.
The Bill, which brings the law on Web tapping into line with existing interception laws, has been criticised over likely costs to Internet service providers, and onus on defendants to prove they have lost an encryption key if they cannot hand it over to the police.
Now MPs have suggested only CEO-level pressure applied to the Chancellor or Prime Minister Tony Blair, can stop the Bill, leaving City institutions to accept the Bill's influence, or consider basing their operations abroad. Two City banks are said to have based their e-commerce operations abroad following the debate over last year's Electronic Communications Bill.
Jim Norton, e-commerce expert at the Institute of Directors, said Home Office problems with the Bill are to blame. "If they could turn it around to make the burden of proof lie with the prosecution rather than the individual, that will solve problems."
Steve Thomas, head of security banking group Apacs said there was no evidence to support claims that banks were ready to base their IT or e-commerce operations abroad.
A string of UK banks have already signed up to a major business-to-business scheme for e-commerce payments launched by Apacs.