BRUSSELS (AP) -- The European Union's top court dismissed Wednesday a British challenge to the introduction of a tax on financial transactions by 11 European nations as premature.
The court ruled that it could not make a decision on something that hasn't been fully introduced.
Even though the EU's largest economies like Germany and France are pushing for the levy, the British government sought to challenge it because the City of London is the continent's biggest financial hub and the measure could undermine the global competitiveness of its banks.
"This is grave news and further justification for our campaign for the three Rs in Europe -- reform, renegotiation and an in-out referendum," said Syed Kamall, leader of Prime Minister David Cameron's Conservative grouping in the European Parliament.
The ruling by the European Court of Justice was immediately seized upon by UKIP, a Euroskeptic party which opinion polls suggest will make big gains in the May 22-25 elections to the Parliament.
UKIP leader Nigel Farage said the ruling "shows that the U.K. cannot act to protect the U.K.'s biggest interest" and that it is "impotent and at the mercy of an antagonistic federalist court."
Under European law, the tax system is pursued under the EU's "enhanced cooperation" provision which allows some countries to press ahead with more integration if an overall deal is not possible. The British government has argued though that even such a partial agreement would have grave consequences on countries that do not go along.
Britain could still challenge the tax at a later stage.
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