The UK Chancellor of the Exechequer says the two principal Channel Islands off the coast of France have agreed to cooperate in a planned clampdown against tax evasion across the European Union.
Mr Gordon Brown said Guernsey and Jersey, British dependent territories where many offshore banks are sited, planned to introduce laws allowing for the exchange of information on the savings income of EU citizens.
He added that "good progress" was being made to persuade the Isle of Man, a similarly self-governing territory between Scotland and Ireland, to follow suit.
"Jersey and Guernsey have agreed to pursue the same policy being followed by the other 15 member states of the EU and have agreed that exchange of information is the only way forward and will legislate accordingly," Mr Brown said after a meeting of fellow finance ministers.
"A year ago a lot of people would have said that was impossible as the dependent territories were thought to be most resistant, but they have now moved in that direction," he added.
The three islands had been threatened with sanctions if they had refused to open up their books.
Under a compromise reached two years ago, the EU said member states could choose instead to adopt an exchange of information regime to allow countries to tax residents who placed their savings outside their home countries. Harmful tax practices in dependent territories were also to be tackled.
Mr Brown also warned that countries which do not lift banking secrecy could find themselves out on a limb. Switzerland has so far been unwilling to do so.
"Those who are not prepared to introduce it (exchange of information) will find themselves being increasingly isolated against the growing consensus of the international community."
The EU has been seeking an agreement on exchange of information or "equivalent measures" with other major financial centres, such as the United States, Switzerland, Andorra, Monaco, Lichtenstein and San Marino. Luxembourg has repeatedly said it would only open up its books if these other centres did the same.