Firebrand MEP Manfred Weber, who is head of the powerful European People's Party (EPP) grouping in the EU Parliament, expressed outrage at Theresa May's pledge to cut corporate tax rates if Brussels does not offer the UK a good deal.
And he said the bloc would fight fire with fire by pulling the rug from under London's thriving financial services industry, revoking its status as the world's leading centre for clearing operations for the euro currency.
Manfred Weber threatened the City of London over Brexit
Mr Weber, an MEP for the southern German region of Bavaria, tore into the prime minister's speech yesterday and said it did not provide "real clarity" on Britain's future relationship with the EU.
He mocked her proposal to strike a new free trade agreement with Europe and even claimed that the UK may want to rejoin the struggling bloc in the future despite Mrs May's pledge she will oversee a clean Brexit.
Guy Verhofstadt said there can be no 'cherry picking' during the Brexit talks
Donald Tusk said the EU is ready to start divorce proceedings
Addressing a debate at the European Parliament in Strasbourg he raged: "The EU is first and foremost a common market, so there is a desire to leave thecCommon market but in order to subsequently negotiate a trade agreement which would entail rejoining in some way.
"So I'm not clear as to whether we are really talking about leaving or not. You could talk about a future accession to the EU but simply because it's branded the EU it might be rejected."
He insisted that "nobody wants to punish Britain" in Brussels, but then ranted on: "We are not going to accept that the euro will be managed largely in the City of London if London no longer belongs to the European Union.
"We talk about not wishing to punish Britain but apparently this does not exclude the possibility of threats coming from the United Kingdom.
"There are talks of a new taxation model making the country more competitive and attracting more investment, there's talk of leaving the G8 where we have taxation agreements and agreements on avoiding dumping, so I wonder who will pay for all this?
"It will be ordinary people paying the price and capital will be left unscathed. This is what will happen if you adopt this new taxation model.
"I think if we could set aside all talk of threatening language and punishment then we would be moving forward to much more constructive talks."
We are not going to accept that the euro will be managed largely in the City of London if London no longer belongs to the European Union.
German MEP Manfred Weber
In her speech yesterday Mrs May backed up previous comments by the Chancellor, Philip Hammond, that Britain will respond to any attempt on Brussels' part to punish Brexit by slashing corporation tax to attract new business from the continent.
Also speaking during the debate the liberal leader Guy Verhofstadt, who is the EU parliament's Brexit negotiator, insisted that there can be "no cherry picking at all" by Britain in the upcoming negotiations.
He blasted: "We shall never accept that you can say 'I want to leave the union the, European judicial court, I want to leave the customs union'.
"You cannot say at the same time then say 'oh, and that little piece that interests me and that is something that I like'.
"No way, it's a fair agreement what we're looking for not a status where outside the European Union is more interesting to be than inside as a member state."
May's Brexit speech: Europe reacts
Tue, January 17, 2017
Politicians and celebrities tweet their reaction as Theresa May unveils her 12 point plan for Britain leaving the EU.
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The British Prime Minister Delivers Her Brexit Speech
His comments echoed those of the EU Council president, Donald Tusk, who warned Mrs May not to attempt divide and conquer tactics during the negotiations, but also praised her warm message to the rest of the Brussels bloc to stick together.
He said: "Yesterday's speech by prime minister May proves that the unified position of 27 member states on the true indivisibility of the single market was finally understood and accepted by London.
"It would be good if our partners also understood that there will be no place for pick and choose tactics in our future negotiations.
"At the same time I want to underline that we took note of the warm and balanced words of prime minister Theresa May on European integration, which were much closer to the narrative of Winston Churchill than to that of the American president-elect Trump."