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President Sarkozy yesterday threatened to wreck the London summit if France’s demands for tougher financial regulation are not met.

France will not accept a G20 that produces a “false success with language that sounds good but contains no commitments”, his advisers said.

Asked if this meant a possible walk-out, Xavier Musca, Mr Sarkozy’s deputy chief of staff for economic affairs, said: “A basic rule with nuclear deterrence is that you do not say at what point you will use the weapon.”

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The French threat dramatically raised the temperature hours before President Obama arrives in London today. If carried through, it would ruin a summit for which Mr Brown and Mr Obama have high ambitions, believing it vital to international recovery.

Mr Sarkozy, who blames the “Anglo-Saxons” for causing the economic crisis, told his ministers last week that he would leave Mr Brown’s summit “if it does not work out”.

A deal to tighten regulation will be one of the key features of the G20 accord but France wants a global financial regulator, an idea fiercely opposed by the United States and Britain. Mr Brown has described the notion as ridiculous.

Germany and other nations are reported to be against a global regulator and sources said that President Sarkozy must know that the proposal would not make progress.

Instead, countries will agree that their national regulators should cooperate more. So-called colleges of supervisors are likely to be established to monitor the activities of companies that operate in several countries.

British officials said it looked as if Mr Sarkozy was picking a fight he could present as a victory back home.

Mr Sarkozy’s threat underlines the emerging splits between world leaders. Germany and France have led opposition to plans to coordinate public spending, championed by the Administration of President Obama.

The importance of action to ease the economic decline will be underlined today by a report from the OECD, the umbrella group for Western democracies. It now expects the economies of its 30 member nations to slump by 4.3 per cent this year, against the 0.4 per cent drop that it forecast last November.

The group also warns that unemployment will reach 10 per cent by next year in most developed nations.

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