European finance ministers are struggling to agree on new plans to regulate hedge funds and venture capital investment.
Voting on a new directive has been delayed to give politicians more time to reach an agreement over the legislation.
France and Germany are pushing for tougher regulations, but fund managers in the UK have expressed concern over the proposals, claiming they are protectionist and discriminatory.
Around three quarters of the hedge fund industry is based in London.
"Hedge funds are off the agenda to allow more time for us to obtain the maximum level of support possible," said a spokeswoman for the EU's Spanish presidency.
"It will come back in during a later meeting of finance ministers," she confirmed.
Meanwhile, Deutsche Bank has predicted that investors around the world will put as much as $222 billion (£145 billion) into hedge funds in 2010.
This means that for the first time since 2007, they will invest more than they withdraw.