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The Financial Services Authority (FSA) plans to charge firms an extra £117 million a year as it tightens regulatory control of the sector.

The City watchdog has been criticised for its part in the banking crisis for failing to stop the risky practices that led to the bailout of several high street lenders.

In its business plan for 2009/2010, the FSA said it needed the extra cash to help modernise the global regulatory framework, help consumers cope during the downturn and overhaul its supervisory process.

However, the Association of Independent Financial Advisers (AIFA) has criticised the proposed increase in regulatory fees that will hit the IFA sector.

Chris Cummings, director general of AIFA, said: "Every firm in the UK is facing great difficulty and trying to find ways of cutting costs. At this time FSA is doing the opposite by asking good firms for an increase in costs which will result in consumers being charged more for advice.

"Why are good firms being penalised for the actions of the bad, when the intermediary community does not pose a systemic risk nor did they cause the banking crisis? These proposals amount to a tax on success."

Hector Sants, chief executive of the FSA, said: "We will need additional financial resources to meet these demanding priorities for the coming year.

"This will mean higher fees for regulated firms, although we have been careful to ensure, as far as possible, that firms requiring the most regulatory work and engagement pay proportionately. There will be no increase in fees for the smallest firms, and many of them will actually experience a fee reduction."