German authorities are claiming that the spectacular investigation into the Liechtenstein tax evasion scandal has been highly successful and is likely to retrieve hundreds of millions of euros in lost taxes.

During the first week of the inquiry, German investigators have extracted 91 confessions of tax evasion by wealthy Germans, who have already paid outstanding taxes of more than €28 million (£21.3 million) to the State. More than €200 million stashed by suspected tax evaders has been located in several Lichtenstein foundations and is likely to be claimed by the German tax authority.

It is believed that about 1,400 Liechtenstein foundations have been established by German citizens to avoid taxation.

German authorities are reporting a wave of payments from individuals and companies that have belatedly declared their taxes to avoid criminal charges. Approximately 150 people have been investigated in the first week, but no legal action has been taken.

After their success, the German authorities have decided to share the confidential data on wealthy clients - and suspected tax evaders - of the LGT bank. It is owned by the House of Liechtenstein, which rules the tiny Alpine principality squeezed between Switzerland and Austria.

The German Government paid about €5 million to a former bank employee, identified by reports as Heinrich Kieber, 42, for a DVD containing the client information. It is now making the data available to other governments free of charge.

Countries including Britain, Sweden, France, Italy, the United States, Canada and Australia have already bought the data from the whistleblower or were given free access to it and are conducting their own investigations.

Mr Kieber is believed to have been given a new identity by the German equivalent of MI6 and is said to be living in Australia.

German investigators, including eight prosecutors and 139 special investigators, are said to have found that a second Liechtenstein bank was also involved in the tax evasion scheme. It is believed there is evidence that Swiss and German banks could also have played significant roles.

“We are now probing the connections to a second bank in Liechtenstein,” Eduard Güroff, a German prosecutor, said. He refused to confirm or deny reports that the bank in question is a subsidiary of the Swiss-owned Vontobel Treuhand.

In Germany, prosecutors say that that the investigation is focused on individual employees of several banks who are suspected of helping their clients to evade tax, but the banks themselves are not yet subject to the inquiry.

Although no Swiss bank has yet been officially accused of involvement in the scandal, senior bankers in the country have said that they would not employ Germans for fear of espionage. Michel Dérobert, the head of the Swiss Private Bankers Association, said: “I believe that this episode will definitely prevent Swiss banks from employing German citizens in the future.”

Leading investors and financial institutions, such as BayernLB, the biggest Bavarian bank, have announced their withdrawal from doing business in Liechtenstein.

“The scandal is shaking the very foundation of the Liechtenstein financial market,” Paul Vogt, a Liechtenstein MP, said.

After demands from Angela Merkel, the German Chancellor, for Liechtenstein to do more to limit its role as a tax haven, the Government of the tiny principality has announced legal action against Germany. Crown Prince Alois of Liechtenstein has broken his usual silence to publicly blame the German taxation system and what he described as the “criminal energy of the Germans” for the way in which they acquired the confidential data

Several European countries have also condemned the move. Kristian Jensen, the Danish Taxation Minister, said that his country would not emulate the German authorities. Mr Jensen said: “We have no intention of using stolen data. And we will not pay for stolen data, either.”

— Morgan Stanley said that one of its directors, Klaus Zumwinkel, would not stand for re-election at the company's annual meeting, scheduled for April 8. He resigned as chairman of Deutsche Post this month after becoming the first high-profile individual to be caught by Germany's tax evasion inquiry.

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