Europe's three largest economies - France, Germany and the UK - have joined forces to implement 'binding rules' on bankers' bonuses.

In a joint letter, UK prime minister Gordon Brown, German chancellor Angela Merkel and French president Nicolas Sarkozy said they would consider ways to cap bonuses.

According to the BBC, the letter says: "We should explore ways to limit total variable remuneration in a bank either to a certain proportion of total compensation or the bank's revenues and/or profits."

Last month Sarkozy unveiled measures to limit bankers' bonuses deferring them over a three-year period with a third paid out in shares. Sarkozy urged the UK to follow suit, claiming the French Government would not do deals with banks that would not adopt similar rules.

The news comes as G20 finance ministers gather in Pittsburg to discuss, among other things, a strategy for bankers' bonuses.