Chancellor George Osborne is in Brussels determined to renegotiate the European Parliament's proposals to curb bankers' bonuses.
But EU finance ministers in the Economic and Financial Affairs Council (Ecofin) are expected to approve last week's proposals.
They include limiting bonuses to 100% of a banker's annual salary, or to 200% if shareholders approve.
The City of London fears the rules will drive away talent and restrict growth.
Mayor of London Boris Johnson has dismissed the idea as "self-defeating". London is the EU's largest financial centre.
On Monday, a spokesman for Prime Minister David Cameron said: "We continue to have real concerns on the proposals. We are in discussions with other member states."
Mr Osborne is concerned that the bonus cap could push banking business, and its brightest talent, away from Europe and its largest financial centre, the City of London.
So the UK is calling for flexibility, but it is struggling to find allies. Countries that often agree with the British position on financial services - countries like Sweden, the Netherlands and Germany - support this deal.
Tuesday's discussion will be followed by a formal vote in the European Parliament in May, and the cap on bankers' bonuses looks set to become law next year.
That would mark an extremely rare defeat for the UK on financial legislation in Europe, a real break with how things have traditionally been done.
But Mr Osborne's bargaining power may be weakened further by Switzerland's recent decision to cap bonuses paid to bankers and give shareholders binding powers over executive pay.
Some EU ministers have looked with approval on the Swiss move, made in a national referendum on Sunday.
"The Swiss often show the way and personally I think we should take inspiration," said French Prime Minister Jean-Marc Ayrault.
Speaking just before he went into the meeting, Irish Finance Minister Michael Noonan said there seemed little prospect of Mr Osborne winning over his eurozone counterparts.
"There is very little further that we can do for them (the British)... There isn't really any more room left," he said.
Late on Monday, France's Finance Minister Pierre Moscovici said the deal would not be renegotiated.
"Everyone must live with what is on the table," he told reporters after a meeting of eurozone finance ministers in Brussels. "I told George Osborne, when I was in London, these moral rules apply to everyone, even the City."
'Unintended consequences'Simon Lewis, chief executive of the lobby group the Association for Financial Markets in Europe, said the proposed measures were not just a threat to the City of London, but to Europe's competitive position in financial services.
He told the BBC: "If this goes ahead, you will see the law of unintended consequences. Salaries will go up, there will be less flexibility, and the banks will be less competitive."
Last week the Federation of European Employers questioned whether restrictions on bankers' pay exceeded EU powers.
There has been speculation that the UK may try to invoke a little-used "national interest" defence to block attempts to curb bonuses.
The so-called "Luxembourg Compromise" allows a member state to block a majority decision being taken if an issue is deemed to seriously affect "a very important national interest".
Some banks have reportedly taken legal advice on whether the EU's proposals are within the law, according to the The Financial Times on Tuesday. One bank had already received legal opinion that the bonus measures contravened European law, the FT said.
Mr Lewis told the BBC that he "was sure" lawyers would be looking at whether the proposals were lawful, but added that "these are early days".
The European Commission has said that it is confident the proposals are legally watertight.
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