The Swiss Senate yesterday renewed its endorsement of a landmark tax evasion deal between the United States, Switzerland and the bank UBS, reviving a parliamentary battle over the plan.

The swift vote by 31 votes in favour and nine against - a repetition of the upper house's stance last week - set the stage for a renewed vote in the lower house on the out-of-court settlement, which is regarded as crucial to UBS's future.

Lawmakers in the lower house had defeated the government bill in a first vote on Tuesday, sparking renewed warnings by Washington of legal action against the Swiss bank.

Switzerland, the United States and UBS agreed in August 2009 that UBS would identify 4,450 US clients suspected of tax evasion, after US authorities filed lawsuits to force the bank to hand over information.

The deal needed to be endorsed by both houses of the Federal Assembly after a Swiss supreme court ruling in January called its legal basis in Switzerland into question.

But it ran adrift in the Lower House on Tuesday as lawmakers clashed in a debate on the separate issue of taxing bank bonuses, with two major political parties, the Socialists and the far right Swiss People's Party, seeking to trade off support for the UBS deal.

The UBS accord was rejected with 104 votes against and 76 in favour. Washington responded with a warning late Tuesday.

"We continue to monitor the events in Switzerland, and we stand ready to pursue all legal options available to us should the Swiss fail to provide the required information," said Frank Keith, spokesman for the Internal Revenue Service, the US tax collection and enforcement agency.

"We have an agreement with the Swiss government. We expect that the Swiss government will continue to honour the terms of the agreement," he said.