dependents, including Bermuda, should get in line with better governance and financial regulation.

However, while the other colonies are consistenly berated for their deficiencies in a report the audit department produced, Bermuda is held up as a shining example of how the rest could reform their legislative and judicial systems in line with international standards.

It also commends the Bermuda Monetary Authority for having a disaster recovery plan for the financial services sector to identify possible risks in the event of a major crisis.

"Bermuda has a very strictly regulated offshore finance industry,'' the report states. "The private and public sectors have a vested interest in the continued success and probity of the financial sector -- which itself provides a form of self-regulation.'' For the report the UK's National Audit Office visited the British Virgin Islands, Gibraltar, and Bermuda to establish the progress made in implementing suggested reforms by the Foreign and Commonwealth Office.

However, the Bermuda visit was of an entirely different nature compared with the visits to the other dependencies.

"Bermuda was included as it is recognised as a well managed territory with sound financial regulation,'' the auditor stated. "While not perfect, it provided a benchmark against which to consider developments in the other Territories.'' The auditor recommended that the Foreign Office push harder to make the territories conform to international standards. At times the report takes the stance of a parent chastising recalcitrant children for their deficiencies.

One area in which all the territories come under criticism is in the adminsitration of justice and the jury system. The auditor notes the Foreign Office is seeking to make more offences subject to summary trial by magistrates rather than by jury.

"Judges and magistrates are generally respected but the relatively small size of most of the Dependent Territories means that independent juries can be difficult to secure because of the closeness of communities,'' the report states. "This has led to occasional perverse jury decisions.'' The Foreign Office is attempting to help the Caribbean territories obtain new court recording equipment as part of its push to modernise facilities.

Bermuda's judges and magistrates currently rely on handwritten notes.