Europe went ahead with landmark proposals to tax the financial sector on Wednesday, ignoring US opposition in a move also sure to provoke a row with London which fears capital flight from the City. On the drawing-board for more than a year, the idea was given fresh impetus last month when given the nod by Europe\'s power couple, French President Nicolas Sarkozy and German Chancellor Angela Merkel. The plan will go before all 27 European Union heads of state and government at an October 17-18 summit, and also be put to a summit of G20 leaders in Cannes on November 3-4. European Commission president Jose Manuel Barroso said the tax could generate around 55 billion euros a year as he lodged the draft legislation with the European Parliament in Strasbourg. \"The tax would be levied on all transactions on financial instruments between financial institutions when at least one party to the transaction is located in the EU,\" a commission statement said. The EU executive stressed that \"house mortgages, bank loans, insurance contracts and other normal financial activities carried out by individuals or small businesses fall outside the scope of the proposal.\" The aim is to ensure that the financial sector \"makes a fair contribution\" after EU governments ploughed 4.6 trillion euros into bailouts mainly for banks caught in a US-triggered property credit meltdown in late 2008, only for taxpayers to suffer as public finances had to be cut as a result. The commission also has another key goal in mind: some of the receipts from the tax, which would not be implemented before 2014, would go directly into the EU\'s budget, giving Brussels more independently-raised resources than under the present system of contributions from national governments. Controversy over where the money will go erupted almost immediately with grassroots activists One, the group co-founded by U2\'s Bono, saying the tax should fund the fight against poverty and efforts to mitigate climate change. \"At least half the revenue of an EU financial transactions tax should be allocated to the fight against extreme poverty and climate change, to help millions of people trapped in misery,\" said Guillaume Grosso of the group\'s French arm. Charity group Oxfam said the commission should \"go further,\" covering \"all financial transactions\" and fixing \"more ambitious rates for derivatives products,\" blamed in part for exacerbating the global financial crisis of the last three years. The parliament\'s socialists and democrats grouping hailed the fact the proposal will target \"the most speculative financial products including transactions carried out off-exchange,\" and bring the date for implementation forward by four years. But the head of an international network of tax advisers, Taxand, said the plans \"will cause severe tension with those countries opposed to the tax.\" Frederic Donnedieu de Vabres also maintained that \"importantly, the proposals currently do little to stop the tax ultimately being passed on to the clients of financial institutions.\" The latest known proposals would slap 0.1 percent on shares and bonds and 0.01 percent on derivatives, although countries wanting higher levels would be free to raise the rate domestically. While Merkel and Sarkozy offered no details on the tax in August, their support helped send shares into an immediate tailspin with financial sector players warning the measure would push business away from Europe. Britain, at the heart of the global financial industry, reiterated demands for any such tax to \"apply globally,\" after a Treasury official argued that \"otherwise the transaction covered would simply relocate.\" The Netherlands are also opposed to it. \"The tax would not be based on where transactions take place but on the parties involved,\" an EU source has argued. Decisions on tax matters, the bedrock of national sovereignty, require unanimity under EU rules.