Robin Hood tax: What is the Tobin tax?
17 November 2011 Last updated at 00:42 GMT
The British government has been accused by the Germans of the heinous crime of trying to look after British interests.
A senior ally of the German chancellor said they would not get away with it.
The bone of contention is the idea of putting a tax on all financial transactions in Europe, to bail out the eurozone.
Britain, home to Europe's biggest financial centre, would bear the brunt but opposition to the tax is un-European, say the Germans.
The comments will ratchet up tensions between London and Berlin ahead of a meeting between Prime Minister David Cameron and Mrs Merkel on Friday.
Andrew Verity reports for Newsnight.