That dubious distinction belonged to Tokyo last year but it has slipped into third place behind London and Paris, a survey by Zagat restaurant guides revealed.
An average meal, including a drink, tax and service for London diners runs to £39.09 up 2.9% from last year.
A roughly equivalent meal would cost £35.37 in Paris and £35.10 in Tokyo.
Eating out in the United States is a relative bargain, leaving New York City diners only 19.30 pounds out of pocket. In Los Angeles, people could expect to pay 15.63 pounds for the same.
"It's astonishing to see how expensive the London dining scene has become," said Tim Zagat, CEO of Zagat Survey, which published its 2008 London Restaurants guide on Wednesday.
"But as indicated by this survey, the city still offers many great values, both in terms of quality and price," he added.
London residents are less likely to eat out, visiting restaurants 2.5 times per week, compared to 3.6 times for those in Tokyo or 3.4 times in New York. Zagat suggested that London's high costs could explain the difference.
Restaurant inflation at the upper end of the spectrum has been especially severe in London. An average meal at the city's 20 most expensive restaurants hits diners to the tune of £87.90, 6.1% higher than last year.
But these first-class venues were still cheaper than their peers in Tokyo and Paris, where meals cost on average £102.86 and £101.08 respectively.
The findings come from about 300 000 surveyors working in 80 cities around the world. They rate restaurants for their food, decor, service and estimated cost.