A City of London delegation will head to Brussels this week to press for a free-trade deal on financial services following Brexit.

The team will be led by former Conservative City minister Mark Hoban, according to the Financial Times.

City leaders are nervous that the March 2019 deadline for the UK's departure from the European Union (EU), will badly hit Britain's status as a European financial centre unless it secures an additional deal.

The plan is based on the principle of "mutual access" – allowing financial groups from the UK and the remaining 27 members of the EU to operate in each other's markets without barriers if the UK leaves the single market.

It would also involve shared regulatory supervision and joint dispute resolution.

The City currently provides three-quarters of EU hedging activities and foreign exchange, and half its lending and securities transactions.

But last month, the EU revealed a draft law to give it the power to move the lucrative euro-clearing business out of London and keep it in the EU after the UK leaves in 2019.

Banks in particular fear they may have to move thousands of staff to financial centres such as Frankfurt and Dublin.

Financial services firms currently based in the UK will face €15bn of restructuring expenses and up to €40bn of extra tier one capital requirements, according to research for the Association of Financial Markets in Europe.

Michel Barnier, the EU's chief negotiator, has said there should be specific arrangements made with the City, but Brussels is unwilling to discuss the future relationship with the UK until "sufficient" progress is made over the divorce settlement between Britain and the bloc.

The Gherkin, London
A City of London delegation will head to Brussels this week to press for its own free-trade deal after BrexitiStock