ZURICH, Feb 20: Switzerland was feeling the heat on banking secrecy on Friday after the United States stepped up its high-stakes tax probe against the biggest Swiss bank, UBS.

The widening US bid to force the bank to disclose the identities of some 52,000 US customers who allegedly evaded taxes added to recent tensions between the Alpine haven and its European neighbours.

“For me it’s the beginning of the end of the abuse of banking secrecy that’s still carried out legally in Switzerland, as well as elsewhere, to protect tax cheats,” said Bernard Bertossa, a former Swiss prosecutor who specialised in tackling money laundering cases.

The latest lawsuit was launched by the US Justice Department in Florida late Thursday, hours after Swiss and US authorities announced a 780-million-dollar out-of-court settlement on another tax fraud case involving UBS.

The bank admitted responsibility and was forced by the Swiss financial regulator to hand over details 250 to 300 US clients on Wednesday in what the US justice department called an “unprecedented move.”

But UBS vowed to fight the latest US court action in Florida.

Swiss Finance Minister Hans-Rudolf Merz insisted that banking secrecy was still intact, while business and bank leaders fended off US “pressure” and described the UBS case as isolated.

“Switzerland has lifted banking secrecy in the past for tax fraud cases, and this is nothing new,” James Nason, a spokesman for the Swiss bankers association told AFP.

But Swiss media were unconvinced on Friday after US justice authorities renewed their offensive despite the earlier deal.

“Banking secrecy, still only a myth,” titled the Tages Anzeiger newspaper, while Le Matin said banking secrecy was facing a “death” threat.

There was outrage in Switzerland at the methods used in the inquiry as politicians accused the United States of short circuiting a legal process underway in Switzerland under a joint taxation agreement.

“This power behaviour is unacceptable,” Christian Democratic Party Vice President Dominique de Buman told AFP, adding that Washington was “shooting us in the back.”

But there was little sympathy for UBS as well, as the tabloid Blick slammed the bank for “turning Switzerland into a banana republic.”

Taxation will also be an issue when the Swiss foreign minister meets EU Commissioner Benita Ferrero-Waldner in Brussels on February 26, officials said.

Switzerland has been facing increasing pressure from its EU neighbours over the past year to broaden measures to discourage income tax evasion.

The Guardian reported on Friday that British Prime Minister Gordon Brown was targeting Switzerland in a global clampdown on tax havens that he is trying to secure for the G20 meeting.

Brown did not mention Switzerland by name in a regular press briefing in London on Thursday.

“I am more confident now, having talked to world leaders, that we are in a position to take further action on this matter.”

“I am not going to name any particular organisations or countries because in the document it says very clearly that we want to look at all jurisdictions,” he added in remarks posted on Downing Street’s website.

Brown was advocating exchange of information between countries, a step the Swiss government has consistently refused to take because it would violate banking secrecy, preferring to tax savings accounts anonymously instead.

German Finance Minister Peer Steinbrueck slammed Swiss secrecy last year and said Switzerland should be placed on the OECD list of countries that do not cooperate against tax evasion. That list is due to be updated soon.—AFP