Germany, France and nine other eurozone countries have been given the green light to impose a financial transaction tax, despite warnings from banks and business groups that it will drive share, currency and derivative trading out of Europe.

EU finance ministers gave their approval at a meeting in Brussels, allowing 11 states to pursue a levy on financial transactions. The UK abstained in the vote alongside Luxembourg and the Czech Republic.

Eleven countries won the EU’s backing for a financial transaction tax (FTT), with Germany, France, Italy and Spain adding their names to eurozone neighbours Austria, Portugal, Belgium, Estonia, Greece, Slovakia and Slovenia.

The UK, which already imposes a tax on share trades, could benefit from a shift in banking business if Germany and France tax foreign exchange or derivatives trading in Frankfurt and Paris.

The levy, which could raise as much as €35bn (£29.3bn) a year for the 11 countries, is designed to prevent a repeat of the conditions that stoked the credit crunch by reining in investment banks. Following the decision, the European Commission will put forward a new proposal for the tax, which if agreed on by those states involved, would mean the levy could be introduced within months. Although critics say such a tax cannot work properly unless applied worldwide or at least across Europe, countries such as France are already banking on the extra income from next year.

“We will be able to put it into place quickly,” said Benoit Hamon, a junior minister in the French finance ministry who was at the meeting.

A tax would raise the costs of individual trades, which economists suspect are carried out by banks to extract commissions and fees from fund managers that handle large pension funds.

Opinion is divided over whether banks would continue to trade at current levels and pay the tax or cut back on the number of trades, potentially saving pension schemes millions of pounds.

Algirdas Semeta, the European commissioner in charge of tax policy, said: “This is a major milestone in tax history.”

Under EU rules, a minimum of nine countries can co-operate on legislation using a process called enhanced co-operation as long as a majority of the EU’s 27 countries give their permission.

Germany and France decided to push ahead with a smaller group after efforts to impose a tax across the whole EU and later among just the 17 eurozone states foundered. Sweden, which tried and abandoned its own such tax, has repeatedly cautioned that the levy would push trading elsewhere.

Critics say the levy could open another rift in Europe, where the 17 states using the euro are deepening ties in order to underpin the currency, and there is the growing risk that Britain could even leave the European Union.

The CBI said the tax, based on an idea proposed by US economist James Tobin more than 40 years ago, would place another barrier to growth in the eurozone because the costs would ultimately be passed on to consumers and savers.

Matthew Fell, CBI director for competitive markets, said: “The UK government is right to reject a FTT as damaging for jobs and growth.

“It is disappointing that eurozone economies are pursuing the FTT, whose costs ultimately fall on consumers and businesses, and will be a drag on the eurozone recovery.

“As the UK’s largest single trading partner, a healthy European economy is in everyone’s interests so we urge participating member states to reconsider this tax.”