Tom Russell, UK representative for Cayman Islands: Little tightening of regulations required

The Foreign Office is due publish a White Paper on the dependent territories on Wednesday and it is expected to contain a number of recommendations over how these major players in banking and insurance are regulated.

The UK is under pressure from the European Union and the Organisation for Economic Cooperation and Development (OECD) to get tougher with those offshore financial centres that have attracted wealthy investors with the lure of little or no direct taxation.

£400bn in assets

It is estimated that Britain's 13 remaining Overseas Territories could be a tax haven for assets worth as much as £400bn. They include the Cayman Islands, Virgin Islands, Bermuda and Gibraltar. Grand Cayman is the world's fifth largest financial centre.

The moves to clamp down on tax havens are part of wider EU moves to create a more a level playing field for businesses across the region - which has also seen the push to eliminate duty-free retailing and calls for harmonisation of tax rates among member nations.

It is anticipated Foreign Secretary Robin Cook could offer full citizenship and British passports to haven residents in exchange for their agreeing to tighter financial regulation.