Bermuda's business leaders are paying close attention to Premier Alex Scott's pledge to open up dialogue on Independence - but warned that international business could get nervous if the debate gets over-heated.

Most, however, are holding counsel on what Independence would mean for the islands local and international businesses until the debate gets under way.

The head of Bermuda International Business Association yesterday warned that the Independence issue and how Bermuda handled it would be watched closely by the world - and business could get nervous if the debate gets out of hand.

Deborah Middleton, chief executive officer of BIBA said: "International business does not like uncertainty. Just as an investor willnot invest in a company with management issues, potential and current investors will get nervous if we mismanage this dialogue and by "mismanagement" I mean allow emotional rhetoric to replace informed, rational, debate."Businesses have in general been scared of the issue rearing its head because of fear that international business - and their money - will up and leave."

One of the main attractions for businesses to come to Bermuda is the English legal system with the Privy Council as the ultimate court of appeal.

Without it, many privately fear that businesses will go to other jurisdictions where they are guaranteed a legal system that is better regarded internationally than that of a small, independent nation.

Mr. Scott called for a national debate on Independence from Britain on February 29 this year, stating that the Island can only fully develop if it broke its colonial ties.

"It is for the people of Bermuda to decide whether or not they wish to become independent," he told Progressive Labour Party supporters on Sunday.

"But we consider it our duty to declare our conclusion that only with Independence can national unity be forged and pride in being Bermudian fully develop. We call on the people of Bermuda to act boldly in fashioning the future."

But business leaders yesterday would not be draw into the debate - yet - and they are reserving judgement to find out what will happen and how the dialogue is actually presented.

Andrea Mowbray, head of the Employers' Council, said: "I don't really see any reaction from business yet as we don't know what course they'll take.

"I think business will be paying close attention to see what the process for dialogue is going to look like and that reactions, whether positive or negative, will come from that."

Charles Gosling, chairman of the Chamber of Commerce, said that it was early days yet to make a comment as people were still having a think about the issue.

Ms Middleton also said also that it was too early to say, but warned that Bermuda had to be seen to conduct itself with dignity during the debate.

She said that when BIBA goes out and promotes Bermuda internationally, one of its key messages was that Bermuda is a mature and sophisticated jurisdiction.

"In part, it is due to this sophistication and maturity that we are able to contemplate independence," she said. "How we as an island handle the discussion of Independence will speak volumes about whether these claims are perceived as true or otherwise by those looking at us from overseas."

And she said that by virtue of the Internet, Bermuda was under an international microscope - with already the first intimations of a dialogue picked up in London and several cities in the US.

"We must not be naive," she said. "We will be judged on how we, as a community, handle these discussions and our competitor jurisdictions will likely try to exploit any notion of uncertainty."

And she warned that international business did not like uncertainty, just as investors will not invest in a company with management issues, potential and current investors will get nervous.

But she added that Bermuda had demonstrated to the world that it could handle change as the spotlight was on the Island during the change of government in 1998.

"International business was unaffected by this and, indeed, has continued to flourish. We anticipate that it will continue to do because the members of BIBA who are the service providers to International Business and others on island who contribute to the success of Bermuda's economy will continue to maintain the same high standards of professionalism and integrity long into the future, irrespective of the Independence issue," she added.