Bermuda's new law to battle dirty money and white collar crime does not go far enough, according to UK Government chiefs.

And the British Foreign Office wants the Island to take up the concept of "dual criminality'' -- where UK laws would apply on the Island.

But Premier Pamela Gordon yesterday blasted back that existing laws and the new Proceeds of Crime Act satisfied international requirements.

And she said: "Britain wants us to be their watchdogs -- that is unacceptable to Bermuda.

"We would have to have people who are experts in every tax jurisdiction in the world because we have people from all around the world incorporated in Bermuda and most of those countries have some sort of tax system.

"If people step out of line with their own country's laws, we're supposed to police it.

"What we are saying is if you have someone who has offended against your laws, come to our Attorney General and we will cooperate -- but the UK say that is not far enough.'' Ms Gordon pointed out that Bermuda's financial sector is already well-policed by the Bermuda Monetary Authority. And she added the Island gains consistently high ratings for clean financial hands from international assessors -- as well as a strong democratic structure.

She said it would be wrong to expose firms incorporating in Bermuda to outside prying perhaps on the flimsiest of pretexts.

Ms Gordon added that much of the outside attention which could be expected was from high tax countries checking up on international business which had moved to low-tax Bermuda.

And she said it would be wrong to do that kind of thing because all business is set up on the basis of privacy.

But she stressed: "We are more than prepared to cooperate if there is evidence that someone has broken any laws.'' Finance Minister Grant Gibbons said the problem was that recognised international agreements like Financial Action Task Force's left it up to individual member countries to decide what constituted serious crimes.

He explained: "Some have chosen to include fiscal crimes -- tax and currency exchange types of crimes. Britain has included that, but there are a number of states which haven't.

"Bermuda has basically included in our Proceeds of Crime Act fiscal offences insofar as if someone has been indicted in another country, someone can come down and ask for a confiscation order. We're very much in compliance where as far a criminal matter which has gone to indictment or conviction goes.'' He said Bermuda feared the spectre of fishing expeditions by authorities from other countries.

But he pointed out the Island already has a tax information agreement with the United States which allows America to make inquiries in Bermuda.

Dr. Gibbons said: "I'm sure we would be prepared to consider making these kind of agreements with Britain and other countries if it was thought to be necessary.'' He added that the Cayman Islands already had a dual criminality deal with the UK -- but that the Caymans did not recognise fiscal offences as crimes, which made the arrangement meaningless.

And he said that Bermuda -- unlike many other countries -- did not have an offshore banking industry and the financial sector on the Island was less individually based and more geared to major insurance and reinsurance firms dealing with each other.

Dr. Gibbons added: "To a large degree, a lot of the concerns about money laundering are not as applicable to Bermuda compared to countries which have offshore banking.'' But he said Bermuda would be prepared to go down the British route -- but only on the condition competitors accepted the same legal restrictions.

Dr. Gibbons said: "When you have small countries engaged in one or two areas, it's much more difficult for them than Britain, which has many sectors in its economy, when you consider fiscal regulations.''