Britain's so-called "patent box" scheme, which offers a reduced rate of corporation tax on income derived from patents, has been hailed by GSK, its biggest drugmaker, for transforming the country as a place to invest.

Last year GSK announced it was building its first new factory in Britain for 40 years as a result of the scheme. The latest move will help it ramp up output of new lung drug Relvar, produce the long-established antibiotic Augmentin and develop innovative technologies for medicine production.

Britain's health minister, Jeremy Hunt, welcomed the new investment. But not all Britain's European partners are as enthusiastic about such patent box arrangements.

In July Germany called for a ban on these schemes, saying they created unfair competition. Patent boxes also operate in the Netherlands and some other European Union member states.

(Reporting by Ben Hirschler; Editing by Greg Mahlich)