Britain's offshore financial centres were urged to consider introducing more taxes by a UK-commissioned report published yesterday.

Former Bank of England director Michael Foot's review of nine British Overseas Territories and Crown Dependencies found that none "could afford to be complacent".

Stephen Timms, a UK junior finance minister, said: "This report sends a strong signal to overseas financial centres that they must ensure that they have the correct regulation and supervision in place, while also ensuring their tax bases are more diverse and sustainable to withstand economic shocks."

Finance Minister Paula Cox said: "We have a diversified tax structure based on a consumption tax model but accept the point that further diversification lowers the risk of sharp revenue declines during downswings in the economic cycle."

She did not elaborate on whether the Government, whose revenues were $14.9 million down on projections in the first five months of the current fiscal year, had any plans to change tax policy.

Bermuda won praise from Mr. Foot in its "swift action" to guarantee a $200 million capital raise by Butterfield bank earlier this year and for tax transparency.

But the report found the Island was weak on fighting financial crime.

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