Jean-Pierre Garnier, the outgoing chief executive of GlaxoSmithKline (GSK), issued a veiled warning to the Government over proposed changes to its tax regime yesterday.

He told The Times: “We value our roots in the UK, but the business environment has to be realistic and favourable so that it doesn't impair our ability to compete globally.”

Mr Garnier, who serves on the Prime Minister's International Business Advisory Council, said that GSK, the world's second-biggest pharmaceuticals company, would be looking closely at any proposed changes to the tax system.

“Any tax change in a country has to take into account the fact that other countries are trying to attract our best jobs and I am confident that the Government will do what's right for the country,” Mr Garnier said.

“I am convinced that this Government is listening hard to business and I know Mr Brown is very conscious of the need to compete globally.”

Shire, Britain's third-biggest pharmaceutical company, said last week that it would incorporate its new holding company in Jersey and would hold all board meetings in Dublin to limit its tax bills.

Profits at GSK fell by 5 per cent in the first quarter of this year, hit by a health scare over Avandia, the diabetes drug, and competition from generic versions of the company's drugs.

Sales of Avandia fell by 56 per cent from the same time last year after a report last May linked it to an increased risk of heart attack.

However, GSK's earnings per share of 25.6p were ahead of the consensus forecast of 24.7p and better than analysts had feared.

David Seemungal, an analyst at ING, said: “Despite the generic attrition and the fallout from Avandia, they still managed to maintain the top-line performance, which is testament to the resilience of their broad product portfolio.”

Mr Garnier leaves GSK next month. He will be replaced by Andrew Witty, previously head of the group's European pharmaceuticals operation.

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