Reports that the UK Government is set to axe controls on Bermudian entry to Britain were dismissed yesterday.

But it is understood that -- despite official Foreign Office denials -- Foreign Secretary Robin Cook will offer a new deal for the colonies with full British citizenship for all -- and no return privileges.

However a Foreign Office spokesman insisted: "The discussions are continuing and no conclusions have been reached.

"When they have been, they will be included in the White Paper.'' UK Parliament insiders, however, yesterday said that Mr. Cook had won a turf war with Home Secretary Jack Straw over the issue of citizenship for the 100,000-plus holders of the second-rate British Dependent Territories Citizen Passports.

The move could be seen as a victory for Bermuda as Premier Pamela Gordon and other dependent territory leaders insisted that -- although easier access to the UK was attractive -- it would not be bought at the price of relaxing the Island's strict immigration laws.

Mr. Cook first raised the issue of full citizenship -- free entry to work and live in Britain and travel through Europe without visas -- at a meeting of the Dependent Territories Association at the start of the year.

But later reports surfaced of a row between Mr. Cook, responsible for the Dependent Territories, and Home Secretary Jack Straw, in charge of immigration matters.

And it now appears -- as predicted in The Royal Gazette -- that Mr. Cook has won a battle of wills with Mr. Straw and got his way.

Reports in yesterday's edition of The Guardian, which has traditionally close links to the ruling Labour party, insisted that Mr. Cook and Mr. Straw had settled their differences.

And the article added there would be no reciprocal rights for UK citizens in the remaining UK-administered territories.

But the Foreign Office spokesman said: "The talks throughout have been constructive and amicable and they continue in that vein.'' Premier Pamela Gordon said: "If this has been a leak, or shows the potential direction they are going, that's good because they know the issue of reciprocity is a non-starter as far as Bermuda is concerned.'' But she added talks between Bermuda and Britain on other issues involved -- financial regulation, the drugs war and anti-money laundering legislation -- were not yet over.

Ms Gordon said: "We have reached something of an agreement in that the basic principle of what the UK Government want and what Bermuda is prepared to do disputed.

"It was in the carrying out of how it was to be done -- they wanted us to change the body of the Act covering money-laundering. But we can put it in the schedule to the Act.

Passport deal agreed manipulate the way we do our legislation.'' But she said, as far as financial services legislation was concerned, Bermuda's existing laws plus new ones tabled recently "substantially covered the financial services aspects''.

Bermuda also feared tough new proposals to crack down on tax fraud and other white-collar crime would hit Bermuda's international business and open up the Island's books to scrutiny by overseas investigators "on a whim''.