Former Premiers Sir John Swan and Sir David Gibbons yesterday hailed Ronald Reagan as the man who was the catalyst for the Island's economic miracle.

It was President Reagan, who died on Saturday at the age of 93, who signed the US-Bermuda tax treaty, which paved the way for Americans to invest heavily in Bermuda reinsurance companies. While the Island had insurance companies before, it was the seal of approval President Reagan gave to Bermuda's financial system that enhanced its international reputation and led to droves of reinsurance companies setting up here, they said.

It was lobbying from Sir John, who enjoyed several meetings with President Reagan in the Oval Office, that led to the treaty being signed in 1988.

The treaty set up a legal framework for US authorities looking for information on Bermuda companies, gave tax breaks for convention meetings held here by US companies, and, most importantly, paved the way for majority America control of reinsurance companies.

Sir John said he also held talks with President Reagan about how Washington should react to Cuban activities in Grenada and Jamaica that led to the invasion of Grenada.

"I always found him to be a very honourable man. I had some intimacy with the man and I knew Mrs. Reagan and I had an opportunity to talk to her," Sir John told The Royal Gazette yesterday. "Bermuda owes him a debt of gratitude almost beyond description. Where would we be today if he had taken the attitude that you've got all you want why do you want anything else? But he was very open and embraced us, and look where we are today.

"We have laid to rest a great friend and a great ally, a person who was always very under-valued for his contribution to his country and to the rest of the world. "I first discussed the Bermuda treaty with him in 1983. I was in the Oval Office with him and members of his Cabinet and he was very cordial. Being able to go there was a result of contacts I had.

"He said if you get permission from (former British Prime Minister) Mrs. Thatcher for these discussions then we will see what we can do.

"I went to London and I got permission. I got the letter and I went with it to the White House and he said let's see what we can get done.

"President Reagan was a very honourable man when dealing with Bermuda. I took with me a letter George Washington had written to the people of Bermuda to say if we ever needed help - because we stole gunpowder from the British - then the American people would help so the people would not go hungry. Well, with the way events were turning out I said now can you uphold what you were committed to. I had a great relationship with him and Mrs. Thatcher that led to Bermuda having what it has today, having that reinsurance business which started in 1988 in the manner it has formed.

"Through business and Government working together with the Americans, we were able to pull off one of the biggest coups anywhere that put Bermuda on the top of the economic pinnacle. We had insurance companies and captives before, but not like the way it was after the treaty.

"The treaty also defined the relationship between the governments of the US and Bermuda where before any action could be taken against a business or an individual there had to be a judicial process so they could just come witch-hunting as they did before. "It was a great benefit and help to Bermuda and it was like a stamp of good housekeeping for Bermuda from America."

Sir John continued: "I also had discussions with him about the intrusions of the Cubans into Grenada and Jamaica.

"I suggested to President Reagan that he get Tom Adams, who was Prime Minister of Barbados, up to Washington and that resulted in the invasion of Grenada. We talked about defining the international relationship so that America's credibility could be restored. Under Carter, people were wondering if America would uphold its commitments."

Sir David, who stepped down as Premier in 1982 to be replaced by Sir John, said he met President Reagan three times informally. Once at Ford's Theatre in Washington where Abraham Lincoln was assassinated, and twice at functions in the White House.

"There is no doubt he contributed hugely to Bermuda's credibility," said Sir David.

"It really started when insurance companies started to come to Bermuda. With the support from America, and we co-operated with the US government in dealing with financial affairs, it greatly enhanced our international credibility.

"We already had a good relationship. One reason why Bermuda was popular in the early days was because we were the only country in the world where America has bases that didn't ask for rent from the Americans.

"He was a delightful, really nice man. He had very strong views. He was determined to break the evil empire (the Soviet Union), as he called it, and damn it all, he did it."