Robin Hood Tax campaign urges UK to back levy on financial transactions to discourage speculation and raise €200bn a year

A €200bn (£172bn) a year financial transactions tax should be levied on banks to discourage speculative trading, according to European lawmakers who voted on Tuesday to support the introduction of the so-called Robin Hood tax.

Campaigners for the tax – who describe it as a "tiny tax that could make a big difference" – urged the UK chancellor to endorse the vote, which was passed by 529 to 127 in a vote in the European parliament. The vote, however, is non-binding.

David Hillman, a spokesman for the Robin Hood Tax campaign, said: "The pieces are now falling into place for a Europe-wide bank tax.

"The German and French governments are both pushing this; Austria and Spain are in support and today the European parliament threw its weight behind a tiny tax on financial transactions that could help us fulfil our commitments to tackling poverty and climate change, and help prevent such huge cuts in public spending.

"It's time the UK stopped dragging its heels and joined the rest of Europe in ensuring the financial sector pays its fair share," he said.

The European politicians voted on resolutions that concluded that if imposing the financial transaction tax worldwide was too difficult, then the EU should press ahead and impose it at a European level.

Martin Schulz, leader of the Progressive Alliance of Socialists and Democrats group of MEPS, told the parliament: "We want to send out an institutional signal saying that the private sector bears its part of the responsibility for the crisis."

The parliament backed a tax that would be levied at 0.05% on financial transactions, which would raise up to €200bn,

George Osborne has not been a supporter of such a tax, saying in the past that it was difficult to see how it could work in practice. However, he has said that he is prepared to consider a financial activities tax – if other countries do the same – that is levied on profits and pay.

Osborne will face pressure from union leaders , such as the TUC general secretary, Brendan Barber, and other campaigners to change his view. "European governments – including David Cameron's – now need to listen up and turn this parliamentary vote into a European agreement, so that the banks start paying for the crisis they caused, rather than ordinary people in Britain and abroad," Barber said.

But others will urge him to hold his ground. Nigel Farage, UK Independence party leader, said that to introduce the tax would be "an act of kamikaze economics".