Barclays CEO John Varley has attacked Britain's decision to slap a one-off tax levy on bank bonuses saying it could damage the City of London and prevent UK banks from competing on a level playing field.

"I think that London could well be damaged by this. And it is very important to this economy that the financial services industry remains competitive," Varley told the BBC in an interview.

"Banks are competing globally — this bank, Barclays, competes with banks all around the world and we have to be able to compete on a level playing field," he added.

The new supertax on bankers' bonuses will see banks charged a 50 percent tax rate on bonuses they pay their staff above 25,000 pounds until next April, a powerful disincentive for big payouts this Christmas.

Varley said he understood the anxiety among the public over pay in the banking industry but felt UK banks could be disadvantaged in attracting top talent.

"The fact is that this is a global industry and talent is mobile and the fact is that we need a level playing field to make sure that we can compete with the best companies in the world," he said.

France has also announced plans for a special 50 percent tax on bonuses but its proposal is only targeted at traders of financial instruments.