A multi-billion dollar offshore firm is set to pull out of Bermuda with the loss of up to 18 jobs amid controversy over tough new work permit rules.

And chief executive William Williams said the move was a direct result of likely work permit restrictions -- including a six-year time limit -- and mandatory reporting of workplace racial breakdowns to the Commission for Unity and Racial Equality.

Mr. Williams said he respected Bermuda's democratic right to elect the Government of its choice -- but added that everyone had to "live with the results of the last election and its implications''.

He added: "The present Government seems to us to be unpredictable and more motivated by their ideology that we would like and less by the practicality that we require.

"We don't know what they will come up with next. We can't afford to wait and see.'' Now his STW Fixed Income Management -- which manages a massive $10 billion in fixed income assets -- is to relocate to California after nearly six years headquartered in Bermuda.

Mr. Williams said: "Bermuda is a very expensive place to do business. Its light regulation in the past was a major factor in offsetting the high costs.'' But he added: "We are concerned about the new work permit policies.

"Delays in granting permits, the necessity to advertise for important positions and the proposed limit on how long a non-Bermudian may continue employment on the Island is unworkable for companies who need the best available employees.

"We believe the imposition of CURE regulations will be disastrous. The employment of the best-qualified individuals at all levels of a business regardless of race is an important goal for employees seeking good jobs and employers wishing to hire the best possible workers.'' Exempted company calls it quits And he warned: "This legislation, rather than promoting opportunity, threatens to cripple or drive away the very businesses that provide the jobs.'' He stressed: "I fully understand that the ghosts of the discrimination of the past still haunt Bermuda's memory.

"Anti-foreigner and racially divisive rhetoric and policies may feel good to some. But at a practical level they benefit no one.'' And he called on international business and ordinary Bermudians to combine to hammer home to Government the potential results of anti-business policies.

Mr. Williams said: "What I wish wouldn't happen is this division between Bermuda business and international business.

"We want business to have a stake in the Island -- not just here as a guest of convenience.

"There is an adversarial position instead of a co-operative one and that's not good for business or good for the Island.'' Mr. Williams added: "This is not easy for me -- I've got lots of friends I've made here, bright people, interesting people from all walks of life.

"It's not an easy thing to do -- but if this sends a visible message and people in Government listen to it, perhaps it's a good thing.'' And he predicted his firm's departure was the thin end of the wedge -- with lost business from firms deciding to start up elsewhere, on-Island international businesses looking at a move, plus a knock-on effect on Bermuda-based suppliers of services.

Mr. Williams said: "We are leaving, picking up lock, stock and barrel.

Businesses have already located jobs elsewhere.

"What we're doing is more visible because we're moving an entity -- but that's not the biggest part of the picture.

"Bermuda has over-employment now, so people who are made redundant will probably be able to find good jobs -- but the loss to the economy, the economic damage, comes from service providers, the people who sell us things, the consultants we hire.'' Mr. Williams said Bermudian owners of rental office space would suffer from a flight of overseas capital -- and even those firms which own their space not necessarily be tied to the Island.

He added: "I would bet if you look at their balance sheets, the size of that real estate commitment is not significant enough to tip an economic decision.'' And Mr. Williams said: "Bermuda's economic success will be determined by the activity of real business doing real work on the Island with real employees, not by the number of paper entities in the Register.

"STW once had 25 employees on the Island, 12 of whom were Bermudians.

But he added: "Eventually the number will be two -- one may be Bermudian.'' Fed up: STW Fixed Income Management cheif execituve William Williams