Premier Ewart Brown believes a Presidential row over tax loopholes that has shone an international spotlight on Bermuda will 'go away soon'.

He said he was in touch with the Barack Obama camp and said if necessary he would try and see him personally to explain Bermuda's position.

Last night Opposition finance minister Bob Richards said it was extremely bad for Bermuda to be at the centre of a US political battle and said he hoped arguments would soon move on to another issue.

However despite the row, he said he felt the biggest threat to international business was still from within the Island.

Bermuda has hit the headlines across the US and Europe after the Obama camp released a campaign video accusing Republican presidential hopeful John McCain of promising to defend tax breaks for insurance companies which locate to the Island.

His comments were made to The Royal Gazette while he was on a three-day visit to the Island last year. At that time Mr. McCain said: "The industry, the reinsurance that's had such phenomenal success has been good for both nations. I would oppose any measures that would upset that."

Yesterday Dr. Brown said: "We are in touch with people in the Obama campaign I believe, hopefully, that this will go away soon.

"But Bermuda has been the focus in two Democratic presidential campaigns – when it was Senator Kerry I went to see him personally and expressed my feelings about it on behalf of Bermuda and we won't hesitate to do the same thing in this instance."

The Premier said even if Democrat Presidential candidate Mr. Obama won he would still have to get any law closing down overseas tax loopholes through both Houses in the US. "It is not automatic but I don't even want to project that far."

Last night Mr. Richards said: "It's very bad for Bermuda to be at the centre of a political storm in the US.

"I guess to some extent it is the price of leadership and we are a leader in this industry and so are an easy target. There is nothing much we can do. I hope the buzzsaw of the US election moves on somewhere else."

Mr. Richards said he hadn't expected insurance to be a key election issue but he said the Brown Government was also damaging international business.

He said: "The biggest threat to our single most productive industry is right here, it's not in DC, it's in BDA. I feel pretty scared that we are threatened from within and without."

Mr. Richards said hassles with work permit term limits, increased taxation on Class Three insurers and regulatory pressures were all making Bermuda less attractive, leading to some insurers moving to business rivals such as Switzerland.

In recent years several Bermuda-based companies have set up subsidiaries or opened offices in Switzerland.

"There is a silent move afoot, international business is looking at other jurisdictions."

The row over the tax loopholes continued in the US with Democratic vice-presidential candidate Joe Biden attacking Mr. McCain over foreign tax loopholes which hurt Americans.

Mr. Biden said Mr. McCain protected offshore tax shelters worth billions of dollars to US insurance giants and had promised to oppose any efforts to close a "Bermuda loophole" where American companies shielded $4 billion to $7 billion from US taxes.

By claiming their headquarters as Bermuda, Mr. Biden said, firms actually based in the United States can keep profits out of the reach of the Internal Revenue Service, according to wire reports.

Speaking in Virginia on Tuesday Mr. Biden kept up the onslaught on Mr. McCain by saying that some insurance companies can use a tax law to wipe out much of their US tax liability.

The companies which issue fire, property and casualty insurance are allowed to establish a Bermuda office and transfer the premiums they collect there, treating them as business expenses. That creates a deduction that erases millions of dollars in taxable profits, costing the US Treasury $4 billion or more a year, said Mr. Biden.

Mr. Biden said despite Mr. McCain's recent support for cracking down on corporate offshore tax breaks, Mr. McCain had once defended them.

He said: "On the floor of the United States Senate, John spoke out against these offshore tax breaks not long ago. Then while he was in Bermuda, according to the Bermuda Royal Gazette ... he started singing a very, very different tune."

Paraphrasing the newspaper account, Mr. Biden said Mr. McCain promised a group of insurance industry executives and lobbyists he would block efforts to close the loophole. In appreciation, Mr. Biden said, the industry gave Mr. McCain's campaign about $50,000.

The McCain camp has hit back by pointing out that Sen . Barack does business with companies that use Bermuda "as a tax haven" because he rents space from Island-based Accenture, according to The Washington Times.