revealed yesterday.

For the US Government has told Government that it is to review the treaty with the Island.

US Consulate General deputy principal officer Bruce Berton yesterday confirmed the US Treasury wanted to toughen up parts of the treaty, masterminded by then-Premier Sir John Swan in 1986.

Mr. Berton said: "There is a portion of the tax treaty which deals with the exchange of information and they would like to do some redrawing of it.'' He added: "I know it's tied into the tax information exchange part of the agreement we have.

"There are some provisions in the agreement which allows for the exchange of information and the US wants to tighten this up a bit because there have been some procedural difficulties in the past in getting information.'' Premier Pamela Gordon -- at the launch of the United Bermuda Party's new five year plan -- signalled that the Island's prosperity could not be taken for granted.

She warned: "There are real issues to be faced and real problems to be dealt with.'' Ms Gordon said the Island was currently being investigated by the multi-national Organisation for Economic Cooperation and Development as a potential "harmful tax regime'' and the UK and EU were also examining the Island's offshore industry and tax structure.

And she added: "Our treaty with the United States, which has been the bedrock of much of our international business, is also under threat.'' Britain -- on behalf of Bermuda -- signed an Island-negotiated treaty with the US more than a decade ago.

The treaty gives tax breaks to American insurance companies doing business in Bermuda.

And US firms holding conventions on the Island also get a financial spin-off -- a lucrative market for the Island.

In return, Bermuda is obliged to supply the US authorities and Internal Revenue Service with certain tax information on US companies and individuals if requested.

The treaty has been hailed as a major contributor to Bermuda's success in attracting insurance giants to the Island.

The original treaty has already undergone some changes -- in 1993, new regulations were introduced which better defined how information could be extracted from US citizens in Bermuda targeted by the American tax authorities.

Previously, the US authorities made a request to the Finance Minister, who decided if it was reasonable.

The new regulations made provision for a Ministry-appointed examiner and the taking of depositions.

And allowance was made for an examiner's report on a business or individual to be subject to court opinion if there was controversy over whether information could be provided or not.