The Chancellor has warned that the move could harm the UK's financial sector.
His failure to persuade other EU countries comes as David Cameron prepares to make a keynote speech on the economy tomorrow, less than a fortnight after the UK lost its coveted AAA credit rating.
His official spokesman said that the Prime Minister would set out how the UK could win in the global economic race.
But the Coalition now faces what it believes is a serious setback, as a cap on bankers' bonuses could be approved within weeks.
Under the plans, payments would be limited to no more than a year's salary.
The UK Government warns such a cap could drive talent to move to other financial centres to work.
At a meeting in Brussels yesterday, Mr Osborne set out his concerns to other EU finance ministers.
But he was told that the broad majority of EU countries backed the EU proposals.
Last night, Labour described Mr Osborne as weak and accused him of having no influence in Europe.
Advocates say the cap will help to reduce risk in the banking sector, making it more stable and reducing the chances of another financial crash.
But critics warn that the move could backfire, driving up salaries which, unlike bonuses, cannot be clawed back.
If passed, a cap could be in place by the start of next year, in time for the traditional bankers' bonus season. Under EU rules the UK Government has no power to veto the proposals.
Instead, the decision will be decided by qualified majority voting.
However, there has been speculation the UK could try to invoke a little-used national interest defence to block a majority agreement, the so-called "Luxembourg Compromise".
Treasury officials said EU ministers were warned of the "perverse effects" a cap could create, such as pushing up basic salary levels.
Shadow chancellor Ed Balls said it was no wonder Mr Osborne found himself outnumbered in Brussels on sensible proposals to rein in bankers' bonuses.
Meanwhile, the UK Government's cabinet has heard details of plans for efficiency savings on major projects.
Last night Business Secretary Vince Cable also attacked what he said was chronic under-representation of women in engineering.".
