Liechtenstein revealed yesterday that it had signed a deal with Germany on tax information exchange aimed at clamping down on tax cheats.

"The text of the Treaty follows the OECD Model Convention and provides for information exchange upon request," Liechtenstein said in a statement. Prime Minister Klaus Tschuetscher said that the deal was "good for our relations and for the first time offers a procedure governed by the rule of law for cross-border cooperation on tax matters between our two countries".

A tax evasion row between Liechtenstein and Germany a year ago unleashed international furore against countries with strict banking secrecy rules. Germany revealed in February 2008 that it bought, from a former employee of a Liechtenstein bank, a list of people believed to have stashed money from German tax authorities in the principality.

This led to investigations on prominent German business executives, sports stars and entertainers, and resulted in the conviction of former Deutsche Post head Klaus Zumwinkel.