Finance sector paid £63 billion in taxes in 2011 - PwC

LONDON (Reuters) - The financial services sector contributed an estimated 63 billion pounds in taxes this year, up 18 percent, PricewaterhouseCoopers (PwC) said in a report for the City of London Corporation.

The report comes as Prime Minister David Cameron faces continued criticism for leaving Britain isolated within the European Union last week by refusing to allow treaty changes to entrench fiscal discipline in the euro zone without measures to protect Britain's finance industry.

Cameron, whose demands were rejected, defended the move by saying the finance industry was vital to the economy. Critics have accused him of trying to protect the industry, known as the City of London, the business district where much of it is based, to the detriment of other sectors, such as manufacturing.

The PwC survey for the City of London Corporation said the increase in the sector's tax contribution was due to a rise in the levels of corporation tax, Value Added Tax (VAT) and employment tax.

The one-off bank payroll tax, charged on 2009 bonuses, was paid in this year, totalling 3.4 billion pounds. However, the bank levy was introduced after the study period closed, and the VAT rise to 20 percent did not take full effect in the period.

"At a time when the City's value is being questioned, both in the UK and in Europe, these figures highlight the huge fiscal contribution it continues to make, even in this extremely challenging economic environment," said Stuart Fraser, policy chairman for the City of London Corporation.

Public anger at banks has remained high around the world, with many blaming them for causing the global financial crisis and resulting economic slowdown.

Earlier this week, official figures showed that the number of Britons out of work had risen in October to the highest level in more than 17 years.

(Reporting by Sudip Kar-Gupta; Editing by Will Waterman)