European finance ministers are to meet on Tuesday to vote on a new directive regulating hedge funds and venture capitalists.
The European Commission wants new rules to overcome what it sees as gaps and inconsistencies in existing, national regulatory frameworks.
London-based fund managers have said the proposals will make it impossible for funds based outside the EU to raise money within Europe.
The US government has argued the plans are protectionist.
Britain's new government wants to delay Tuesday's vote, but a report suggests it has been unsuccessful.
The BBC reports hedge funds use sophisticated, complex investment strategies to make returns, and often make money when markets are falling.
They are more important to Britain than almost anywhere else in Europe.
It is estimated that 80% of Europe's hedge funds are based in London, and about a quarter of the world's such businesses.
London Mayor Boris Johnson has said in the past that EU plans to regulate the funds could "strangle" London as a financial centre.