Alistair Darling sought to bolster the Government’s battered image in the City yesterday by announcing a task force aimed at keeping the UK’s corporate tax regime competitive.

The move to appoint executives from the private sector comes after the Government caused uproar this year with the introduction of tax measures that critics said detracted from London’s status as the preeminent place to do business.

Mr Darling said that the working group would have a remit to ensure that competitiveness remained at the heart of any future reforms to the tax system.

“I am determined that we do what is necessary to remain one of the world’s best places to do business, and, critically, to ensure that we maintain our strong and resilient economy and our position as the world’s leading financial centre,” he said at a conference at Chatham House in London.

He added that the group would discuss ways in which the tax system could provide the long-term certainty that multinational companies need in the face of increased competitiveness and other global challenges facing both business and government.

Gordon Brown, the Prime Minister, and Mr Darling are desperate to restore their tarnished images in the City after widespread criticism in the wake of their clampdown on capital gains tax and foreigners working in Britain. There are growing fears about the taxation of multinational companies — in particular reforms of the way in which HM Revenue & Customs taxes profits generated overseas.

It emerged that WPP, the British media group, was considering moving its tax domicile to the Republic of Ireland, which has a much friendlier corporate tax regime. Sir Martin Sorrell, WPP’s founder and chief executive, said that the move could cut the group’s £200 million tax bill by tens of millions of pounds a year.

WPP’s focus has become increasingly international, with emerging markets such as Asia, Latin America and Eastern Europe booming. Britain is its slowest-growing market. WPP pays tax in more than 100 countries. It emerged over the weekend that United Business Media, another British media group, would be relocating its tax base to Ireland, as the group said that 85 per cent of its profits come from outside of the UK. UBM’s move comes after a similar move from Shire, the British drugs company.

Mr Darling said that the corporation tax rate in Britain was one of the lowest in the G7 group of leading economies. “Tax is one element of the strong business environment which makes the UK competitive at a global level,” he said.

Membership of the new task force will be by invitation and will include up to ten senior representatives of multinational companies, although none was named yesterday. It will be chaired by Jane Kennedy, Financial Secretary to the Treasury.

Richard Lambert, the CBI Director-General, said: “This is welcome and business will be encouraged that the Government wants to provide certainty and consistency for the long-term.”

However, Brendan Barber, the TUC General Secretary, said that the tax group could allow large companies to lobby privately for lower taxes.