Claims that Wyeth, the US pharmaceuticals group that employs over 2,000 in the Republic, was engaged in systematic tax fraud across its international divisions were last night rejected as "mischievous and fallacious" by the company's Pennsylvania headquarters.

Mr Lowell Weiner, a Wyeth spokesman, told The Irish Times it had honoured its tax obligations in the Republic and elsewhere.

He dismissed accusations by Mr Peter Rost, a former senior executive and self-proclaimed "whistleblower", that Wyeth sought to escape paying tax on bonuses to overseas managers.

"We have never evaded tax or tried to evade tax in Ireland or anywhere else," said Mr Lowell.

The executive, Dr Peter Rost, said that in 2000, as he worked to convince the company to correct a tax discrepancy he had learned about in Sweden, he discovered that the practices were common in Wyeth's operations worldwide. He is suing the company over his subsequent redeployment, claiming he was demoted because he was a whistleblower.

Dr Rost alleges the company paid nearly $500,000 (€470,000) to reimburse eight executives who had to settle tax debts in Sweden in the mid-1990s - an allegation rejected by the company, which said the eight had "taken liberties" with expenses.

"These allegations are without foundation and we will fight this law suit," said Mr Weiner.

Wyeth has operations in Dublin, Kildare and Limerick. A €1 million manufacturing campus is under construction in Clondalkin, south Dublin.

Last week a US federal court of appeals denied the company a $226 million refund from the Internal Revenue Service, saying the tax shelter it used to justify the tax saving was a sham.

Wyeth shares fell $0.69, or almost 2 per cent, to $36.44 on the New York Stock Exchange yesterday.