Bermuda's strict 60/40 rule on business ownership will have to be relaxed, Finance Minister Eugene Cox predicted yesterday.

And he warned the Island's future prosperity was at risk if tight rules against overseas domination of Bermuda firms were not loosened.

Mr. Cox said: "This is something we will have to liberalise to some degree.'' He was speaking exclusively to The Royal Gazette after attending a seminar on the global economy at a Paris conference hosted by the Organisation for Economic Cooperation and Development (OECD) and the French Ministry of Finance. Mr. Cox said: "A looser hand on the 60/40 reign would benefit not only international business, but small Island firms as well.'' But he ruled out a wholesale ditching of the 60/40 policy and said Government would adopt a case-by-case approach with the best interests of Bermuda at heart.

He said: "A lot of small businesses wanted it because the investment money they needed isn't available locally.

"That's the kind of liberalisation we have to look at -- I'm not saying tomorrow, but down the way we have to do that.'' And he warned: "If we don't get up to date with it, other countries will be doing the business and we will lose the business.'' Mr. Cox added that powers to wave the 60/40 rule had been in place for years and that they would be used more creatively in the future.

The Minister also revealed that he will make a statement in the House of Assembly next Friday on the controversial, secret annexe to the Island's pledge to co-operate with the OECD in its bid to hammer dodgy off-shore jurisdictions.

Mr. Cox said: "I don't intend to spell out the details, but I want to clarify it.

"Some people have been misrepresenting the facts and saying that, because we haven't spelt out what's in the annexe, we have given away the shop.'' And The Royal Gazette understands from OECD sources that the threat of income tax in Bermuda has not been raised.

60/40 rule may be relaxed Mr. Cox said: "The annexe is a qualifying paper that goes together with our level one commitment letter.

"That states in a broader sense that we reserve the right to retain these powers to do things which will promote Bermuda's interests.

"And the annexe makes it clear that we intend to maintain control of the future growth and development of Bermuda.'' Mr. Cox, who is due to address the conference today on the need to clamp down on harmful tax policies, added that Bermuda's position was looking good.

He said: "There is probably still some misinformation, but I think the fact we have the opportunity in Paris to correct misconceptions will assist.'' Mr. Cox added that when the OECD probe into so called tax havens began two years ago, the instinct was to go for a `one size fits all' approach to off-shore finance, but that line had been modified.

He added that nearly 30 non-OECD members were invited to the Paris conference, including small countries with big financial centres -- almost half the total participants.

Mr. Cox said: "People said it was good to have non-members participating because much of what the OECD is doing is impacting on them.

"People have said if they had only had non-members involved at an earlier stage it would probably have saved a lot of headaches and heartaches.''