“The best way to tax international companies is through international agreements but the time for talking is coming to an end and the stalling has to stop,” Hammond told the Conservative Party conference in the English city of Birmingham.

“If we cannot reach agreement, the UK will go it alone with a Digital Services Tax of its own,” he said.

Britain has previously said it was considering taxing the revenues of internet firms such as Facebook and Google until international tax rules are changed to cope with digital firms that can shift sales and profits between jurisdictions.

Speaking at a later event, Hammond said the tax would only apply to firms above a “quite substantial” size threshold and would involve putting a value on the content and data of British consumers as a share of the firms’ overall value and calculating what proportion of the business is based in the UK.

He said talks at an international level had been stalled by U.S. tax reforms aimed at ensuring internet firms pay their taxes there.

“I have to say my prognosis is that it is quite unlikely that we will be able to achieve international agreement in anything like a sensible time scale because the U.S. isn’t frankly onside with this agenda,” he said.

Hammond said Britain was also looking at ways to update its competition policy in response to the power of major companies.

“The expansion of the global tech giants and digital platforms, while of course bringing huge benefits to consumers, raises new questions about whether too much power is being concentrated in too few global technology businesses,” he said.

Hammond has appointed President Barack Obama’s former chief economist, Jason Furman, to lead a review of Britain’s competition regime, to ensure it is fit for the digital era.

The Confederation of British Industry warned that any tax moves should not damage the UK’s global competitiveness.

“All businesses are increasingly digital. Any new approach must be built on evidence from enterprise or it risks being blunt and counterproductive,” Carolyn Fairbairn, the CBI’s Director-General, said in a statement.