Over 30 jobs have been saved at ailing accounting giant Andersen in Bermuda by being taken on by its rival auditing firm PricewaterhouseCoopers, The Royal Gazette has learned.

According to an on-line Bermuda business directory at www.bibn.com, the company has over 30 employees at its Victoria Street offices.

Yesterday The Royal Gazette reported that the jobs had been saved after a deal was struck between the two auditing firms.

And yesterday global units of Andersen, which has been charged by the US Justice Department with destroying records related to its audits of fallen energy trader Enron Corp, were striking merger deals with rivals as legal wrangling continued in the United States.

Three more European units of Andersen, in Germany, Belgium and Austria, neared deals by close of play yesterday.

"Our clients have been very loyal to us in this challenging time," Andersen Bermuda managing partner Scott Hunter said on Wednesday. "I am confident that as a result of this agreement, they can continue to be served in a seamless manner by world-class professionals within an unsurpassed global network."

Mr. Hunter said the deal was not "a merger in the true sense".

The deal in Bermuda was struck as Andersen faced a host of legal actions and layoffs of its 70,000 strong-staff world-wide.

The fate of the global company remained unclear as talks between the firm and the United States Justice Department slowed.

PricewaterhouseCoopers' joint managing partner Tom Conyers called the move to assume Andersen's Bermuda staff "an agreement in principle" under which partners and staff would join his firm.

The move was expected to become effective from early June as all staff move into PricewaterhouseCoopers' offices in Hamilton.

"This is a very exciting opportunity," Mr. Conyers said. "Both firms have exceptional teams of professionals and the agreement will, we are sure, enhance the quality and depth of service to clients and provide career development opportunities for all involved."

Both Hunter and Conyers declined to answer further questions as the agreement is subject to a review to conduct due diligence and approval by the individual firms, they said.

Reports yesterday said the ailing accounting giant was unravelling fast as US partners consider joining their overseas colleagues in bolting the firm.

Rival firm KPMG, which already has courted Andersen's international staff, has a tentative deal to hire 150 partners and 2,000 employees from Andersen offices across the United States, sources familiar with the situation told Reuters yesterday.

The Washington Post reported on Wednesday more than than 80 percent of Andersen's 1,700 US partners have signed non-binding letters of intent to pursue positions at other firms or in new companies.

Those defections, if they occur, would deprive Andersen of auditors at a time when its main strategy is to retool itself into what it has called "the auditing firm of the future," centred on an elite corps of auditors whose only job is to review the books of corporate clients.

That vision, championed by former Federal Reserve Chairman Paul Volcker, means selling off lucrative consulting and tax advisory businesses. Volcker was brought in earlier this year to overhaul the Big Five accounting firm.

"I don't hold out a lot of hope that the firm of the future is going to be a particularly successful firm," said Robert Willens, an analyst at Lehman Brothers. "Tax partners and tax personnel are an integral part of the audit team. I don't see how you can perform an audit without having tax expertise."

The difficulties of the 89-year-old Chicago firm have grown with dizzying speed since its criminal indictment last month on an obstruction of justice charge related to its shredding of Enron documents.

The merger deals came as Andersen's negotiations with its opponents in civil and criminal cases near critical junctures where possible settlements may be at risk, sources said.

Talks between the accounting firm and the US Justice Department have slowed as Andersen starts to think its weak financial health makes the deal on the table less tenable, the sources said.

Andersen has lost some 200 audit clients so far this year, including companies such as Delta Air Lines and Halliburton Co., pinching much-needed revenue.

Other legal sources said a second day of negotiations, in a major class action suit stemming from Enron's collapse, ended without a deal on Wednesday.

The firm recently announced it was cutting 7,000 jobs, or more than a quarter of its US staff. And Andersen's U.K. unit on Wednesday announced plans to slash 1,500 jobs.