Britain will reject plans announced in Brussels this week to combat industrial-scale tax avoidance by the world’s biggest multinationals, the Treasury minister responsible for tax policy has said.

David Gauke, financial secretary to the Treasury, told representatives from the European parliament that Britain would not adopt the measures to introduce certain common tax rules. “He was very clear that the UK is insisting on tax competition,” said German MEP Michael Theurer, who met with the UK treasury minister on Thursday. “It was really a shock from the minister.”

Theurer is part of a committee of MEPs set up to examine how multinationals are avoiding tax in the EU and what can be done about it. The committee was set up in response to the LuxLeaks revelations of tax avoidance in Luxembourg and its members strongly support the reform plans announced on Wednesday by European commissioner for tax Pierre Moscovici.

Moscovici’s proposals seek to resurrect a longstanding tax harmonisation policy, which has been blocked by hostile member states since 2011.

Known as the common consolidated corporate tax base, or CCCTB, the policy would see countries adopt a common set of rules on where company profits arise – removing many of the national differences that multinationals have been able to exploit to lower their tax bill.

Aware of previous resistance, Moscovici has in recent weeks taken extensive soundings from EU members, prompting him to water down key elements of the CCCTB in an effort to make it more palatable. His calculations, however, appeared to have been wide of the mark as the UK Treasury signalled an emphatic rebuff.

In the first phase of the European commission’s plan at least, the common framework would not allow companies to consolidate profits across Europe and file a single tax return. Moscovici had hoped removing the “consolidation” element of the CCCTB would make it acceptable to the likes of the UK and Ireland.

Last month Gauke told the FT: “The CCCTB has been around a very long time. It is a proposal still looking for a justification.”

His opposition does not seem to have softened, though it is understood that the Treasury might not object to other EU member states developing a CCCTB alone.

George Osborne has set great store by Britain’s tax competitiveness, slashing the headline corporate tax rate from 28% to 20%. But it is not just on the rate that Osborne has competed hard: new favourable tax regimes for multinationals with offshore financing subsidiaries as well as new tax breaks for patent-owning companies have also been central to aggressive tax competition policy.

These and other measures have seen a wave of companies shifting their European headquarters or research and development arms to the UK – much to the anger of other member states. The UK has seen an influx of multinationals – among them Aon, Fiat Industrial, and Starbucks’s European operations – looking to gain tax advantages through the optimal location of the often small number of headquarters staff.

Last month the US seed and agrochemicals group Monsanto announced that, should it succeed in taking over Swiss firm Syngenta, it planned to move its headquarters to the UK.

A mandatory common approach to setting the tax base for companies, as proposed by Moscovici, would remove many of these central elements to Osborne’s tax competition strategy. “The current rules for corporate taxation no longer fit the modern context,” Moscovici’s plan claims, “as corporate tax planning has become more sophisticated and competitive forces between member states have increased, the tools for ensuring fair tax competition within the EU have reached their limits.”

The Treasury declined to comment on reasons for the UK’s prompt rejection of Moscovici’s tax reform proposals. It said: “Direct taxation is a matter for EU countries, and any direct taxation matters require unanimity across all EU countries. We’re fully involved in international discussions on tax issues and have consistently supported global measures, through the EU, G20 and OECD, which will strengthen international rules to prevent corporate tax avoidance.”