The Government of Bermuda has defended its integrity in the wake of claims that alleged corruption could damage the Island's reputation as a business jurisdiction.

A statement released by Finance Minister Paul Cox in response to an article featured in The Financial Times (FT) yesterday said that Government sticks to the letter of the law and prides itself on good law and order.

The story said that tax haven rivals were delighting in the alleged corruption which had triggered a political and courtroom battle and that some Bermudians claim the allegations regarding Premier Ewart Brown's (named as prime minister in the article) home improvements pose a danger to the Island's image as a tax haven that is a linchpin of the world insurance industry.

The story has previously been featured in other UK national newspapers such as The Times and the Daily Mail, but as the FT attracts an international readership concentrated in business circles, its story could prove more damaging to the Island's reputation as a financial centre.

This follows the Mid-Ocean News breaking the original story of a leaked confidential police dossier about an investigation carried out between 2002 and 2004 into alleged corruption at the Bermuda Housing Corporation. Police closed the inquiry after concluding no crimes had been committed, although the then-head prosecutor Kulandra Ratneser admitted the outcome could have been different if the country's criminal law had been updated.

Ms Cox rebuffed suggestions that the matter has scarred the Island's business image, pointing out that Bermuda has enjoyed a reputation as one of the most stable jurisdictions for international business and finance over the last five decades.

She said the Island's adherence to international regulatory standards and good governance were essential to its 'gold standard' reputation, operating according to international standards including Basle, IAIS and IOSCO as well as being a member of the Offshore Group of Banking Supervisors, Basle Cross Border Banking Group, IAIS, IOSCO and the CFATF.

She said: "The Bermuda Government has excellent credit ratings placing the country among the most creditworthy sovereign borrowers in the world, another indicator of good governance.

"Leading credit rating agencies all have stable or positive outlooks on Bermuda primarily based on Bermuda's credible commitment to high standards of fiscal prudence, a strong off-shore international financial centre, and a proven track record of managing the economy and business environment.

"These factors and outlooks reflect our prudent management of the country."

Ms Cox added that Government carried out a risk assessment to protect against unexpected levels of disruption and unbudgeted costs and that Bermuda is a responsible jurisdiction and works in a transparent way and that is what Government requires of companies that operate on the Island.

The FT story cites Grant Gibbons, former leader of the Opposition United Bermuda Party, claiming he reckons a drawn-out case could cause reputational damage despite there being no problems with the Islands' regulation of offshore finance.

The Bermuda authorities have gone to court to stop reporting of further contents of the investigation dossier, alleging breach of confidence. After losing the case in Bermuda, they took it to the judicial committee of the privy council, which has prohibited reporting of fresh revelations from the dossier pending a hearing on the case, scheduled for October 29.