Rishi Sunak has told world finance leaders that the world cannot “continue to rely on a tax system that was largely designed in the 1920s”.

Speaking at the first in-person G7 finance meeting since the start of the pandemic in London on Friday, the Chancellor said the world had “high expectations” for what could be agreed over the two-day summit.

And he said it was clear that taxation had to change in a “complex global digital economy”.

Ahead of the meeting, Mr Sunak said he was aiming to secure a “fair deal” on digital taxation during the talks with ministers from the US, Japan, France, Canada, Germany and Italy at Lancaster House.

On the agenda were measures to tackle climate change as well as efforts to secure an international agreement on how digital companies are taxed.

In a briefing after Friday’s meeting, a Treasury spokesman said: “(Rishi) Sunak was clear that large digital firms should pay an appropriate level of tax where they operate so countries can raise revenue and invest in their public services – a priority for the Government – and highlighted that ‘opportunities to make truly lasting reforms like this do not come along very often’.”

Opening the session, Mr Sunak had said: “The G7 is a hugely important grouping and it’s an honour to be welcoming my counterparts to London with a renewed spirit of multilateral co-operation.

“Even before holding the G7 presidency we’ve been clear on our priorities – protecting jobs, ensuring a green and global recovery and supporting the world’s most vulnerable countries.

“Securing a global agreement on digital taxation has also been a key priority this year – we want companies to pay the right amount of tax in the right place, and I hope we can reach a fair deal with our partners.

“I’m determined we work together and unite to tackle the world’s most pressing economic challenges – and I’m hugely optimistic that we will deliver some concrete outcomes this weekend.

“Together we can make a real change and help steer the international community through the next stage of our recovery.”

It is not expected that any agreements will be made until Saturday.