British Prime Minister David Cameron was partly joking when he said French President Francois Hollande's tax policies would force French companies to re-locate to Britain, a spokesman said Tuesday.

But Cameron was also making a serious point about his desire to attract foreign businesses to Britain, the Downing Street spokesman told reporters in parliament in London.

"The PM was answering a question partly in jest, but there's also a serious point to what he said in terms of competitive tax policy," he said.

"We're very keen for business to come here in order to grow the economy."

Cameron told business leaders at the G20 summit in the Mexican resort of Los Cabos that Britain was ready to welcome an exodus of French high-earners if Hollande goes ahead with an election pledge to impose a 75 percent tax on any annual income above one million euros ($1.26 million).

"When France sets a 75 percent top income tax rate we will roll out the red carpet and we will welcome more French businesses which will pay their taxes in Britain. That will pay for our public services and our schools," he said.

Hollande, who is attending his first G20 summit, reacted coolly to the taunt, saying "everyone should take responsibility for what he says".

"At a time when European solidarity should be strong, I will do nothing to breach it," the president told reporters in a terse response.

London is already home to an estimated 400,000 French people, including many wealthy French citizens who work in the capital's huge financial centre.