moves too far towards linking its currency to that of the European Union (EU), according to a report in the London Daily Telegraph .

A former treasury Minister, David Cannan, has tabled a motion in the Tynwald, the Isle of Man's parliament. The motion, to be heard on February 2, will call for contingency plans to be drawn up for Independence, including draft arrangements for linking the Manx pound to the US dollar.

The Isle of Man is situated between the port of Liverpool, on England's west coast, and Ireland.

At the heart of the issue is protecting the Manx financial sector from the unwelcome attention of the EU. The Isle of Man enjoys a special relationship with the EU which allows free trade of Manx goods with the Community.

The Isle of Man is not part of the United Kingdom, but relies as a British Crown Dependency on the United Kingdom for its defence and international representation. The Tynwald is the world's oldest parliament, dating back more than 1,000 years.

The island is home to 72,000 inhabitants. Unemployment is less than one percent and economic growth last year ran at seven percent. Calls for harmonisation in the EU have raised fears that moves towards a federal Europe might damage the Manx financial sector.

"If the UK joins the European Monetary Union, then the Isle of Man has three years to consider its future,'' Mr. Canaan said. "The finance sector has to be protected at all costs.'' Chief Minister Donald Gelling, the Manx equivalent of Bermuda's Premier, has said that Independence should be determined by referendum. "Constitutional change is a process of evolution, not revolution,'' Mr. Gelling said.

A recent investigation by British authorities into financial regulation in the Channel islands, notably Jersey and Guernsey, resulted in what is being referred to as the Edwards Report, which made far-reaching recommendations for the reform of the Channel islands' financial sectors.

Guernsey, in particular, is a competitor of Bermuda's international business industry. A number of Bermudian service providers have established a presence in Guernsey.

The news from the Isle of Man come hard on the heels of reports last week that the Cayman Islands are considering pursuing Independence in order to protect their banking industry from changing regulations in the EU and demands for greater openness from the Organisation for Economic Co-Operation and Development.