The risk of litigation is seriously undermining New York's competitiveness as an international financial centre compared with London and it could reach a "tipping point", says one of the top corporate lawyers in the US.

Rodgin Cohen, chairman of Sullivan & Cromwell, one of the leading mergers-and-acquistions law firms, said the UK government had done "a splendid job" making sure London was first the financial centre of Europe "and now looking towards becoming the financial centre of the world".