look after its overseas dominions.

The new body will essentially provide better coordination between the Foreign Office and the Overseas Development Administration, in London.

Although Bermuda will fall within the new body's scope, it is unlikely to be affected by many, if any, of the DTB's policies.

The chief aim of the DTB will be to strengthen the Caribbean dependent territories of the British Virgin Islands, the Cayman Islands, the Turks and Caicos Islands, Montserrat and Anguilla.

These are poorer countries which are not as well regulated or generally considered to be as stable as Bermuda.

An announcement on the formation of the DTB is likely to be made as soon as the UK Parliament reconvenes in a few weeks, according to a Government source.

The source indicated that at one stage Bermuda was going to be left out of the DTB's terms of reference.

But it was decided to include Bermuda because the Island might fall on the periphery of certain policies.

"The DTB will look at the whole way the British government acts in relation to its dependent territories,'' said the source.

"But Bermuda is unlike the Caribbean territories in that it does not receive aid from London. I don't think Bermuda will be affected at all.'' It is understood the DTB will have a much broader function than simply attempting to fight drugs trafficking and money laundering.

Its aim will be to strengthen the Caribbean islands' economies and legal structures to ensure that their offshore financial activities are run properly and legally.

The DTB will be chaired by Mr. Mark Lennox-Boyd, a junior Foreign Office minister, and will meet quarterly in London.

News of the DTB's formation comes shortly after allegations in a new book, called "Britain's Dependent Territories: A Fistful of Islands'', that the UK government neglects its overseas dominions.

The book's author, London economist Mr. George Drower, accuses the Foreign Office of lethargy and says it sometimes cannot be bothered to help when problems occur.