Gordon Brown's plans to reform the banking system by taxing transactions has been rejected by the US.

Speaking at today's G20 summit in St Andrews, Scotland, Brown called for a 'social contract' in global banking and proposed an international levy on transactions to prevent taxpayers money being used in future bailouts.

Chancellor Alistair Darling later told fellow finance minsters that the measures were being considered by the International Monetary Fund.

However US Treasury Secretary Timothy Geithner has flatly rejected the idea of a transaction tax.

In an interview with Sky News after the summit he said: “That’s not something that we’re prepared to support.

"I think we all share a basic interest in trying to make sure we build a system where taxpayers aren't exposed in the future and where the financiers are bearing the consequences of their mistakes - that they are responsible for the risks they take.

"We proposed in the United States a way to achieve that, by making sure that if ... the government is exposed to any risk of loss, that we recoup that loss by assessing a fee on the liabilities of banks.

"Now we think that approach helps reduce the risk of moral hazard, it's fair to the tax payer and it doesn't put us in the position where retail investors and pension funds are the ones bearing the burdens of that cost."

The Canadian Treasury has also rejected a taxation on transactions.

Brown admitted he needed global support to push forward with the 'Tobin Tax' and may be forced to abandon the proposals in light of the US treasury's opposition.

The prime minister's calls for continued fiscal stimulus were better received, with G20 ministers agreeing that it was too early to withdraw support.

The communiqué from today's summit said that global economic recovery was “uneven” and remained dependent on policy support, with high unemployment still a “major concern”.

Chancellor Darling said: “We are saying quite clearly while there are signs of improvement and growing confidence, we are not out of the woods yet and we need to maintain the measures we have taken.”

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