World governments should consider urgently a levy on banks to fund future bailouts, British Prime Minister Gordon Brown said on Saturday, departing from London's longstanding resistance to a global tax.

France and Germany have led the way in Europe on seeking to force the financial sector to return some of the billions of public dollars plowed into banks over a year of financial crisis.

London to date had resisted, mindful of the interests of its powerful financial services industry, which generates a large proportion of Britain's tax revenues, growth and jobs.

We should discuss whether we need a better economic and social contract to reflect the global responsibilities of financial institutions to society, Brown told a meeting of financial policymakers from the G20 group of countries in Scotland.

There have been proposals for an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global transaction levy, he said.

Brown's government this week forked out another 30 billion pounds (50 billion pounds) on bailing out two of its biggest banks for the second time, and opinion polls all show him heading for a hammering by the opposition conservatives in next year's election.

Brown said the International Monetary Fund would review the possibility of a global transaction tax and report back in April next year -- signaling the G20 had agreed as a group to take up the matter more seriously.

I do not in any way underestimate the enormous and difficult practical and technical issues that will need to be overcome that a globally cohesive system requires and raises.

But I do not think these issues should prevent us from considering with urgency the legitimate issues I have discussed.

Britain has repeatedly rejected a long-standing idea for a so-called Tobin Tax on foreign exchange transactions.

G20 officials said the levy mentioned by Brown would be broader and could be on all financial transactions or bank earnings. The levy would be small, perhaps around 0.005 percent be much lower than a Tobin Tax.

Officials at the G20 meeting said a levy and the funds raised could be used not only to pay for future bank bailouts but also to fund development and other areas.

Brown said any measure would have to be global in nature and implemented by all the world's main financial centers in the United States, European Union, Asia, Middle East and Switzerland.

A levy must also not result in avoidance or reductions on capital flows, he said. It must also be fair, measured and enable financial services to make their necessary contribution to future economic growth.

The idea of a global fund was aired this week by Deutsche Bank Chairman, Josef Ackermann, who said it would avoid the midnight scramble for funds before the Tokyo market opens -- referring to how bank rescues are typically put together hastily late at night in time for a reopening of trading.

But Ackermann said such as fund could be a partnership between governments and the financial sector rather than relying purely on banks.

(Editing by Patrick Graham)

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