German police conducted a fresh series of raids in Munich and Frankfurt today as part of the country's largest ever tax evasion crackdown that has already claimed the scalp of the Deutsche Post chief executive, Klaus Zumwinkel.

Christian Schmidt-Sommerfeld, the chief prosecutor in Munich, said that investigators and prosecutors have conducted a number of raids in the city but did not name any more suspects.

Mr Schmidt-Sommerfeld said that the raids were conducted in co-operation with investigators in Bochum who are looking into the tax evasion claims.

A spokesman for the German finance ministry said that the government expected the investigation would uncover tax evasion among the country's business elite “totalling hundreds of millions of euros” through secret bank transactions in Liechtenstein.

Mr Zumwinkel, who had led the Bonn-based bank for 18 years, tendered his resignation last Friday after raids on his home. German authorities are investigating Mr Zumwinkel, 64, over allegations that he evaded €1 million in taxes by transferring money to Liechtenstein.

The German Government has paid at least €4 million for information which has led to hundreds of people being investigated for concealing €3.4 billion in assets in Liechtenstein. Officals are believed to be looking at 700 suspects, many of them prominent figures, and preparing 900 search warrants.

The development came as the German newspaper Handelsblatt reported that Deutsche Postbank, majority owned by Deutsche Post, may be sold to Commerzbank by the end of this year.

The report that the German government has been holding intensive talks with Commerzbank over the potential merger with Postbank for several months came as Mr Zumwinkel officially resigned as Deutsche Post's chief executive.

Deutsche Post said on Friday that Mr Zumwinkel would resign at its supervisory board meeting on Monday. The board's response is expected later today.

The departure of Mr Zumwinkel, who was arrested last week as part of the crackdown, is expected significantly to raise the likelihood of the sale of Deutsche Post.

Peer Steinbrück, the German finance minister, and the Chancellor's Office want Deutsche Postbank sold by the end of the year, the paper said.

The government, which has the power to veto any sale of Postbank until the start of 2009, would like Commerzbank to buy the business as it would create a second internationally competitive commercial bank in Germany after Deutsche Bank Commerzbank has a market capitalisation of €12.8 billion (£9.6 billion) while Postbank is valued at €9.8 billion.

On Friday, the chief executive of Deutsche Postbank, Wolfgang Klein, forecast a “speedy development” in the consolidation of German banks, saying that his bank was the only bank poised to play “a key role” in this consolidation.

Deutsche Post's shares were 0.84 per cent higher at €22.69 while Deutsche Postbank was up 1.8 per cent at €61.60 and Commerzbank was up 2.6 per cent at €20.22 following the news.

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