An international financial watchdog has backed off in its bid to compile a hitlist of dodgy offshore jurisidictions, it was revealed yesterday.

For the multi-national Organisation for Economic Cooperation and Development has changed its review process.

And it has cancelled a January meeting in Paris where Bermuda was expected to state its case for keeping off a list of "harmful tax jurisdictions'' to a special forum.

Now, small study groups of OECD representatives will look at each jurisdiction targeted and report to the tax haven forum in April.

And, in addition to Bermuda being invited to Paris in May, delegates from the OECD could visit the Island to examine the Country's financial safety nets for itself.

Finance Minister Eugene Cox said last night: "The Government believes that such an approach is a positive step and will assist the forum in obtaining a clear understanding of the real value that Bermuda's international business adds to the world economy.

And he added: "The OECD has recognised the need -- as pointed out by Bermuda -- to address jurisdictional differences and the individuality of countries.'' The previous UBP Government submitted a report to the OECD in September, fighting Bermuda's corner in a bid to keep off the list.

Then-Finance Minister Grant Gibbons and his team argued that Bermuda did not fall into the OECD net on harmful tax -- and insisted the Island was not a tax haven.

And they pointed out that -- although Bermuda has low taxes and no taxes on profits -- international business and domestic ones paid the same taxes with no special treatment for the offshore sector.

The UBP Government also stressed that Bermuda had already passed anti-money laundering legislation designed to prevent drugs money-laundering and other white-collar crime.

Mr. Cox said: "It emphasised that, unlike many other jurisdictions, Bermuda has maintained a `know your customer' policy throughout the growth of its international business industry.'' And he added the Bermuda submission to the OECD stressed Bermuda's membership of international financial bodies and its information-sharing tax agreement with the US.

Mr. Cox said: "It showed the real contribution to the world economy made by business carried out in Bermuda.'' Around 35 jurisdictions across the world came under the OECD spotlight when the probe was announced earlier this year, with the number rising to 47 as the investigation continued.

The European Union has also launched its own crackdown on offshore financial centres in a bid to turn back the tide of capital leaving member states for so-called tax havens, both within Europe and overseas.