The fight against corporate inversion legislation being passed by US legislators has paid off at least in the short term, according to a leading free market advocate who said efforts to ban companies moving offshore for tax reasons had not been successful.

But a legal crackdown against the controversial business transactions could still happen next year with a tax official telling the US Senate committee last week that action was still warranted against companies that shift their place of incorporation in order to minimise their US taxes.

Andrew Quinlan, president of the Washington-based Centre for Freedom and Prosperity said on Friday that his organisation's lobbying efforts had borne fruit: " (Our) ten-month lobbying campaign against misguided anti-inversion legislation paid off on Wednesday when the House of Representatives left town without imposing protectionist restrictions on the right to charter in jurisdictions with better tax laws."

Mr. Quinlan said his organisation had lobbied Capitol Hill on the matter by attending more than 75 meetings, making hundreds of phone calls and sending thousands of e-mails.

A heated debate over corporate inversions has been waged in the US capital and in the international media since the beginning of the year after a number of companies - including Cooper Industries, Ingersoll-Rand, Nabors and Stanley Works - said they would move their headquarters to Bermuda.

Mr. Quinlan continued: "Everyone thought fiscal protectionism was an unstoppable train, so it is very gratifying that our hard work and effort paid dividends. We will have to re-fight this battle next year but we continue to believe that we can prevail as more people become aware of the issues."

Mr. Quinlan had previously labelled the US tax code as being "inequitable" and the real reason that US corporations might look to move offshore as they try to remain competitive in the global marketplace. Intense pressure against the inversions from some American politicians and media backlash saw at least one of those companies - Stanley Works - back down on plans to move to the Island. The company said it would instead remain incorporated in its long-time home of Connecticut.

Despite the furore, legislators in both the House of Representatives and the Senate failed to get any legislation against the corporate inversions passed into law before the recess for the November elections.

In the current climate of patriotism after the September 11 terror attacks and given the economic uncertainty, the topic was seen as pivotal by some politicians on the campaign trail for voter support. But last week Pam Olson, assistant secretary for tax policy said in testimony before the Senate Appropriations Committee, on corporate inversions: "This kind of marketing activity has essentially been put on ice (after Stanley Works backed down)."

She added that she still saw corporate inversion transactions as an issue.

If Congress doesn't act this year, Olson said: "I don't think people are going to rush to initiate these transactions, but they are going to be watching."

The House and Senate have both passed legislation that would prohibit companies, which have inverted from receiving federal contracts. Opponents, however, have succeeded in stripping that provision in subsequent House-Senate negotiations, such as on the 2003 annual appropriations bill for the Department of Defence, according to international news reports.

But the legislative campaign could also become broader with Ms Olson, in her testimony, saying that any new laws should go further than simply targeting corporate inversions alone: "The same tax policies that allow inversions also make it attractive to incorporate overseas from the start, or be taken over by a foreign buyer."

Ms Olson added: "The policy response to the recent corporate inversion activity should be "broad enough to address the underlying differences in the US tax treatment of US-based companies and foreign-based companies, without any regard to how foreign-based status is achieved."