Government last night gave the first indication that a law to protect staff who highlight fraud and corruption will definitely be introduced in Bermuda.

Public Safety Minister told the House of Assembly that whistleblowing legislation was on the agenda as part of a raft of criminal law reforms but gave no indication of when it might be brought in.

Mr. Horton made his announcement during a debate on a motion first tabled by Opposition MP last November which has sat on the order sheet ever since.

The clamour for an overhaul in the law has since intensified in the wake of the Bermuda Housing Corporation fraud trial, which yesterday saw Terrence Smith jailed for eight years.

In the wake of that verdict, Auditor General Larry Dennis said the law should be altered to protect staff who highlight fraudsters and expose "illegal, underhand practices" in Government.

Just a month ago, Attorney General Larry Mussenden said further cross-Ministry work was needed before a decision on whether to introduce the whistleblower legislation could be made.

But Mr. Horton told members yesterday: "The Government is pleased to state that there will be public and private sector whistleblower legislation on the agenda as part of our criminal law reforms.

"The Attorney General is currently working on a number of law reform initiatives. The Government will continue to develop its policies on whistleblowing."

He added that the Opposition was trying to "poison the minds of Bermudians" with the suggestion that the Island was rife with corruption.

"The Government stands for impeccable standards when dealing with the public purse," he said. "Bermuda does not practise corruption and we are not corrupt."

Mr. Barritt had earlier said that Bermuda should note the impact of whistleblower legislation in other countries ? and consider the benefits of introducing a similar crackdown here.

Mr. Barritt said any crackdown should not be seen as helping "snitches and grasses". He added: "That's not the purpose of whistleblowing."

Referring to various well-publicised, high-profile Government frauds, he said the aim was to bring about a change in culture and create a firm foundation for "good, solid governance" while promoting honesty and accountability in the public sector.

He said if Bermuda went ahead with such a law it would not be forging a new path, and pointed to successful anti-fraud legislation in Canada and the UK.

And the MP said that the aim was not to create controversy, with complaints initially going to the head of each Government ministry as internal matters.

Mr. Barritt said that critics would ask if another layer of red tape was needed in Government, and also question whether the expense of setting up an independent official to oversee the legislation would mean value for money.

"There's no better check of bad practice and wrongdoing than the person perpetrating them knowing there's a system in place (to expose them)."

UBP backbenchersaid the Minister and the Attorney General were giving out conflicting information. "I'm not sure if the left hand knows what the right hand is doing," he said.

He added: "We believe this stuff needs to be moved on quickly. We hope it isn't simply lip service."

Finance Minister said there was a "not-so-subtle" inference from the Opposition that the Government was in need of such legislation."Bermuda is not known as a jurisdiction of corruption and sleaze," she said. "Nor are we known as a jurisdiction which does not have a fine reputation." She said care needed to be taken to ensure that whistleblower legislation did not create a culture of personal attacks on public servants.

In 2004, Mr. Dennis presented results from the United Kingdom that showed many frauds emerged as the result of employee action.

On the Smith case, Mr. Dennis said early notification to his office of suspected fraud within the BHC meant that the audit environment was not affected when the case later hit the headlines.

Shadow Finance Minister said she was pleased Government had taken on board the Opposition's recommendations regarding whistleblowing. She said when Bermuda was scrutinised on a worldwide basis it needed to continue "coming up smelling of roses".

Noting the Bermuda Housing Corporation fraud and overspending at the new Berkeley, she said this created an impression there was something wrong in the country. And she said the whistleblower changes were needed to bring checks and balances to the system and better protect public funds.

If civil service staff were offered the protection such laws provided, she told the House last night, further "significant transgressions" would probably come to light, although she added that people were "terrified" to speak out and expose wrongdoing.

Government backbencher said that some people thought the civil service became corrupt overnight when the PLP took power in 1998.

He accepted there had been cases of fraud in Government, but he denied it was part of the culture. He said the culture of fear, referred to by the Shadow Finance Minister stemmed from slavery when laws were created against insolence. "Let's not say it started in 1998," said Mr. DeVent. "That's hogwash."

He said the Opposition was deliberately trying to put out the idea Government was corrupt, and he said this idea was not only "nonsense" but also "extremely dangerous", because there was a younger generation who believed that all politicians were crooked and they should not be alienated.

"We should not be playing political games when there's little evidence of corruption," added the former Housing Minister, who said that any whistleblowing laws needed to cover both the private and the public sectors.

Fellow Government backbencher criticised the language used in the Auditor General's recent report. He said Larry Dennis had used the word fraud 21 times in the first eleven pages, and had not used such language when referring to the UBP Government.

"His template on reporting has changed since we came into Government," added Mr. Burgess.

He added that whistleblowing laws would not change anything, and pointed to the problems Police had getting people to testify in court cases.

Opposition MPsaid Mr. DeVent and Mr. Burgess had been "needlessly defensive". "All we are saying is that the processes in the world have changed. People everywhere are holding their Governments to higher standards of accountability." He said the Bermuda Government looked after about $1 billion in public funds ? and people had a right to expect transparency.

"We are not talking about a culture of corruption; we are talking about a culture of accountability." He said the legislation was needed to help rid politicians from both sides of the House of the negative image that they were "out for themselves".

Telecommunications Minister Michael Scott said the Government needed no lectures on accountability from the UBP. When elected in 1998, the Government said it would operate in the "sunshine of public scrutiny" and had stuck to that.

He said a series of criminal law reforms had helped make juries feel safer while increasing public confidence in the legal system ? and denied the country was in the grips of corruption.

He accused the Opposition of repeatedly reeling of a "fixed list" of civil service fraud cases, but said he was confident that list would remain static due to Government action. UBP member claimed the "sunshine of public scrutiny" was not evident for the Bermuda Housing Corporation saga or the Berkeley project, neither of which he said had been dealt with satisfactorily.

He called on Government to "come clean" and say it was dealing with such problems rather that suggest it was being picked on because it was a labour Government. "Government is in a state of denial," said the Shadow Attorney General.

Government moved a motion amending Mr. Barritt's original motion, which noted whistleblower laws in other countries and considered the benefits for Bermuda . The replacement stated that Government "takes note of the whistleblowing legislation in other countries and, within the context of Government's criminal law reform programme, consider the benefits of such legislation". Mr. Barritt welcomed the amendment.