Treasury Minister warns the EU could block moves to impose an 'Amazon tax'

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EU rules could block moves to impose an 'Amazon tax' - amid mounting fears online giants are killing Britain's high streets.

There are growing demands to introduce a new 'online sales tax' after it emerged Amazon paid a meagre £1.7m - despite profits hitting nearly £2billion. 

The 20 per cent tax would be slapped on companies which make at least 20 per cent of its sales on the internet. 

It comes as many of Britain's high streets have been turned into ghost towns as businesses close - squeezed between falling footfall and rising business rates.

But Treasury Minister Mel Stride has warned that strict Brussels' rules on state aid could block attempts to impose the new tax.

In a letter to the Treasury select committee, he said: 'The government considers there is a high risk that such a tax would be found to be a state aid.'

He said the EU could deem the tax unfair because it would penalise a retailer which sold 21 per cent of its goods online - while letting one that sold 19 per cent on the internet avoid the new tax.

He warned: 'This could distort competition. The extent of this would need to be judged on the basis of a detailed proposal.' 

Britain's high streets have been plunged into turmoil as many of the country's leading retailers have closed down.

House of Fraser was on the verge of heading into administration but was rescued at the eleventh hour by Sports Direct owner Mike Ashley. 

But the well-known department store chain has shut down many of its shops as it

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