top-level talks in London on plans to set up a hitlist of dodgy offshore financial centres.

But PLP deputy leader Eugene Cox refused to slam Britain for slapping a gagging order on the heads of the Overseas Territories, called to the Foreign Office for the first round of talks on "harmful tax'' jurisdictions.

Mr. Cox said: "If they are party to discussions and the idea is not to publicise them, then I suppose one has to go along with them.'' The Royal Gazette revealed weeks ago that Britain -- led by international watchdogs and the G7 group of the world's most powerful industrial nations -- was set to crack down on countries which built in unfair tax advantages to encourage companies to settle there.

It is understood, however, that Bermuda could be protected because it does not meet all the conditions for hardline treatment.

Mr. Cox admitted the conditions were such that it "certainly suggests there is that threat'' to Bermuda.

He said: "I don't know if worried is the right word -- but concerned certainly, until we discuss it and learn one way or the other.'' But he insisted: "I don't think we deserve to be on any hitlist -- but I also think the PLP should be invited to discuss and deliberate on what is best for Bermuda.'' Both G7, which includes Britain, the US, Japan and Canada, and the Organisation for Economic Cooperation and Development, which has around 30 members, including the UK, want to toughen up on so-called tax havens.

But Mr. Cox -- unlike some Government figures, the National Liberal Party and ex-PLP candidate-turned-Independent Phil Perinchief -- did not back the possibility of Independence as a way out of potential trouble.

He said: "The Opposition has always said we feel a number of things should be addressed before the question of Independence was discussed.'' And he repeated the official PLP fence-sitting line of "education and discussion'' before the issue was raised again.

Mr. Cox said: "We certainly want to look at things as they are and at the facts before we make any decision.'' NLP leader Charles Jeffers said the discussions with the Foreign Office were "at what might be called a delicate stage'' and declined to criticise the gagging order.

He added: "Not having been able to actually see for ourselves what's going on, it's very difficult to say -- however, I think that we have a lot to be very concerned about and we should be concerned.

But he said: "The thing that concerns us is that, as long as we are an Overseas Territory of Britain and don't have full charge of our affairs, we're going to have to accept things whether we like it or not.'' Mr. Jeffers accepted Bermuda would still have to deal with these matters, even if Independent.

But he said: "We could make our own decisions without reference to anything else.'' And he said the possible offer of full UK citizenship from Britain could not be divorced from international efforts to deal with tax havens.

He added: "We could be drawn closer into the net rather than moving further away on our own. We're more vulnerable on these matters than if we stood alone.'' Mr. Jeffers admitted: "Britain will do her best for us -- but it might not be good enough.

"It's a balancing act with what is best for Britain, then they weigh that against Bermuda. It's not much of a contest.'' Ex-PLP candidate and lawyer Perinchief -- standing as an Independent in Pembroke West to protest at the PLP's apparent backpedalling on the Independence issue -- questioned the use of the phrase "harmful tax.'' He said: "Tax harmful jurisdiction means not tax harmful to Bermuda but to the companies in Britain, Europe and those whose countries are part of G7.

"It's only harmful because these jurisdictions cannot apply their tax structures on these overseas countries -- that's why the Bahamas and Barbados became more attractive in their independent state.'' It is understood, however, that even independent countries will not be immune to pressure to clean up their acts if that is seen as necessary by the international community -- with the threat of being made international pariahs if they do not.

Mr. Perinchief added that onshore firms would find it difficult to compete with companies saving cash by basing themselves offshore, while the tax coffers of affected countries were deprived of much-needed revenue.

And he said Britain's request to the heads of the Overseas Territories for a blanket of silence on the talks underlined the real nature of the relationship.

He added: "In my view, the total blackout of news in respect of Bermuda's destiny is utterly reprehensible.'' And he insisted: "Independence is the only route Bermudians can take if they are to preserve what little semblance of pride and dignity they have left -- but we seem to be stuck with a nation of wimps.'' He said the Premier should put the issue of Independence and full British citizenship to the people, either before or during a General Election -- and that the PLP should be calling for that as well.

Mr. Perinchief added the issue of full British citizenship versus Independence was "the single most divisive'' issue affecting Bermuda -- but he said it should not be treated along party lines.