The European Union politician behind controversial legislation to cap bankers' bonus payments dismissed the U.K. government's plans to mount a legal challenge on CNBC Thursday.
The row over banking regulation and bonus caps in the European Union took another turn Wednesday with the U.K. announcing it was taking legislation limiting bonuses to a maximum of twice basic salary to the European Court of Justice.
Philippe Lamberts, a Belgian Member of the European Parliament on its Committee for Economic & Monetary Affairs, told CNBC that it is not for the ECJ to judge the legislation. He argued that opponents are motivated by "self-interest" and that it is "fiction" that bonuses are linked to performance.
Politicians' "unwillingness to tackle too big to fail" made bonus caps necessary, he added.
Banking bonuses have become the focal point for much of the anger around the credit crisis, and are now causing international fallout.
Under the law, bonuses will be limited at a maximum of a banker's base annual salary and will only be allowed to reach twice the pay if a large majority of a bank's shareholders agrees.
(Read more: UK challenging EU in court)
Not only does this new bonus cap affect all of Europe's banks, but it'll also cover European units of foreign banks and EU banks' staff working overseas _ such as in New York
The U.K.'s Chancellor of the Exchequer, George Osborne, argued that the restriction on bonuses would merely lead to increased basic salaries for bankers – and therefore higher fixed costs for banks.
Financial services are key to the U.K. economy, with the banking sector alone contributing £21 billion ($33 billion) to its tax take in the 2010-11 tax year. It has a larger banking sector than any other EU country apart from Germany, and banking bonuses were credited with buoying the housing market and the luxury goods sector during the boom years.
The UK's action is a "significant step," according to Alex Beidas, employee incentives lawyer at Linklaters.