Britain is set to offer full UK citizenship to its Dependent Territories -- but with a hefty price tag which could include trying people accused of money laundering and white-collar crime in Britain under English law, The Royal Gazette can reveal.

UK Parliamentary insiders yesterday confirmed British Foreign Secretary Robin Cook was likely to go for a carrot and stick approach in his rewrite of relations with Britain's remaining colonies.

He is also set to demand the repeal of the death penalty, an end to corporal punishment and that laws banning gay sex should be struck from Dependent Territories law books.

And UK Parliamentarians predicted the British offer will meet with a stormy reception when it is unveiled by Mr. Cook at a meeting of the Dependent Territories Association in London on Wednesday.

One UK MP with an interest in foreign affairs predicted: "I don't think the meeting is going to be as friendly as we thought.'' The Royal Gazette understands that the dual jurisdiction move would mean alleged fiscal offenders would face court proceedings -- even if their actions were not illegal under Bermudian law.

And it is likely anyone accused of white collar crime and money laundering could be tried either in Bermuda under UK law or taken to England instead.

It is understood that there is opposition to the granting of full citizenship to the 170,000 citizens of the dozen or so UK Dependent Territories among sections of the UK Government.

The Royal Gazette reported last week that British Home Secretary Jack Straw, the Minister responsible for immigration and passports, was against ending the discriminatory issuing of second-rate British Dependent Territories' Citizens' passports -- which give no right to live and work in the UK.

Reports of a major clash between Mr. Cook and Mr. Straw were denied by official spokesmen from both Ministries.

But it is known the Foreign Office is traditionally distrusted by other UK Government Ministries -- and Westminster insiders admitted full citizenship was "the biggest issue'' in the talks.

Bermuda has already abolished anti-gay laws -- unlike most of the Caribbean Dependent Territories, but still has the death penalty and birching on the books, although neither has been imposed for years.

The Island already has a reputation for clean financial dealing, unlike many other jurisdictions, including some Caribbean Dependent Territories.

And Island leaders are likely to be furious at the prospect of greater powers for Britain in managing internal financial affairs.

The new Proceeds of Crime Act is aimed at tackling money laundering and drug cash, as well as associated white collar crime and was passed to bring Bermuda into line with the international approach.

But one UK MP said: "It appears Britain wants Bermuda to be more vigilant than international bodies are already requesting of it. That might not be too acceptable over there.'' Speaking from Switzerland, Premier Pamela Gordon last night declined to discuss the MPs' claims in advance of a meeting with top Foreign Office figures.

But she said: "Whatever we decided to do, we would want to make sure that it will be in the best interests of Bermuda.'' COOK'S PLAN Full citizenship to colonies Repeal of death penalty End to corporal punishment No anti-gay sex law Trying money launderers in the UK Robin Cook IMMIGRATION IMM GOVENMENT GVT