|Jersey has warned it may create its own currency or even adopt the dollar if the UK joins the euro.
The announcement by Frank Walker, Jersey's most senior Minister, marks a new low in relations between Labour and one of Britain's wealthiest offshore havens. The Channel island - a self-governing Crown Depen dency - has been critical of moves by London and Brussels to crack down on international tax avoidance. Thanks to its low taxes, Jersey has attracted £156 billion in bank deposits.
Walker told the Jersey Evening Post this weekend: 'Jersey is not a full member of the European Union and the island's economic success depends on the right to set and maintain its own fiscal structures. If membership of the euro is likely to suck us into tax harmonisation, for example, we could not do it.'
Walker said that the island had the option to retain Jersey's own pound or link to another currency, such as the US dollar. 'We can't rule anything out but that is down the list,' he said.