Deal lawyers are coming under pressure to revise their international strategy as research confirms the growing challenge from London to New York's status as the world's leading financial centre.

PricewaterhouseCoopers'(PwC's) IPO review for 2005, released last month, found the number of European floats increased from 433 in 2004 to 603 in 2005, with the amount of money raised almost doubling to €51bn (£35bn) as companies fled tougher listing requirements in the US.

The findings – the first time European listings have exceeded the US in value – have major implications for lawyers on both sides of the Atlantic and support claims that the Sarbanes-Oxley Act is driving issuers from full US listings.

The biggest floats in Europe both came from France where Electricite de France, advised by Shearman & Sterling, completed a €7bn (£4.8bn) placing. The deal was rivalled by Gaz de France's €3.5bn (£2.4bn) offering, which generated roles for Cleary Gottlieb Steen & Hamilton and Linklaters.

However, London dominated the 2005 rankings, generating 354 offerings valued at €19bn (£13bn), a figure that was boosted by foreign issuers such as Russian companies Kazakhmys and Sistema. In contrast, US exchanges have seen a slowdown in IPO activity, dropping in value from €37bn (£26bn) in 2004 to €27bn (£19bn).

Some lawyers argue the dearth of fully-registered deals from foreign issuers is playing into the hands of UK firms which in recent years have built up their capability to handle 144a institutional placings.

Such deals, which were previously the preserve of US advisers, allow foreign issuers to tap the US capital markets without the burden of a full regulatory listing.

Jonathan Coppin, UK corporate partner at Shearman & Sterling, which has de-registered more than 10 companies from US markets in the past year, said: "It is down to a couple of factors: the general resurgence in business confidence and the deterrent effect of Sarbanes-Oxley. It is also pushing people to de-register from the US."

Ashurst US securities partner Daniel Bushner said: "There has been a trend for companies listing outside the US and there have been some big Russian and Middle Eastern transactions, which have come to London rather than New York. The $64m question is: will the US address the issue?"

Claims of a power shift towards London have been heightened by the current political pressure in the US to block 'risky' foreign takeovers – an issue that sparked controversy during DP World's prolonged takeover of P&O.

A group of chief executives at top Wall Street banks, including Morgan Stanley's John Mack and Merrill Lynch head Stan O'Neal, wrote to the US Senate banking committee last week to protest at proposed laws which would clamp down further on foreign takeovers.

Richard Weaver, head of PwC's London capital markets group, said: "For the first time, we are seeing US companies coming to the UK markets, rather than defaulting to the US. I do not see any reason for this trend not to continue."