The French president has abandoned plans to visit London to make amends after describing Britain as the "losers" in the distribution of new jobs in the European Commission.

A planned bilateral meeting in No 10 has been downgraded to a meeting in the margins of next weeks's European Council, but Downing Street played down speculation about a rift and blamed a "diary clash".

The prime minister's spokesman said Gordon Brown had spent "some good face time" with Sarkozy when they meet at the Commonwealth heads of government meeting in Trinidad and Tobago last weekend.

London was irritated when Sarkozy mocked Britain over the distribution of jobs in the new commission. He was delighted when France secured the powerful internal market portfolio.

Michel Barnier, a former agriculture minister, will take charge of new financial regulation that will have an impact on the City of London. The French president told Le Monde: "The English are the big losers in this business."

Paris, which said both leaders had decided to delay tomorrow's talks, embarked on a charm offensive. Barnier said he would work with all sides. "There is no reason for this controversy as the rules of the game are clear," Barnier told Reuters. "I plan to work with everybody. I'm not an ideologist. I'm very practical. Everybody needs to calm down.".

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