The US Government tonight said it would force UBS to give up the names of its American clients with offshore accounts, dashing Switzerland’s hopes that a new bilateral tax treaty would persuade Washington to drop its lawsuit.

The Justice Department sued UBS in a Florida court in February, seeking the names of 52,000 Americans that it suspects have used offshore bank accounts with the Swiss bank to hide money from the Internal Revenue Service (IRS).

The case is due to be heard on July 13. In a brief filed with the Florida court yesterday, the Justice Department said: "The US has a strong national interest in making sure that all US taxpayers comply with the tax laws, including disclosing their offshore accounts and paying all the taxes they owe."

Switzerland last week signed an agreement to share information with America about money US citizens have stashed in secret Swiss bank accounts.

Hans Rudolf Merz, Switzerland’s President, had previously told Timothy Geithner, the US Treasury Secretary, that his country was keen to go ahead with a bilateral tax agreement if the IRS dropped its case against UBS.

Last week’s deal raised hopes that the Justice Department would consider ending its pursuit of UBS. But the US Government’s statement ended those hopes, putting the bilateral agreement in danger. The Swiss Parliament may refuse to ratify the tax deal with America if UBS faces continued legal action.

A UBS spokeswoman reiterated the bank’s claims that turning over the names would violate Swiss banking secrecy laws. She said: "Issues of the exchange of information in tax matters should be discussed and resolved between friendly governments."

UBS has stopped offering offshore accounts to US clients. From tomorrow (July 1), American customers of UBS will not be able to access their secret accounts unless they transfer the money to an onshore bank account or close the account.

Under US law, taxpayers with more than $10,000 (£6,000) in offshore accounts must disclose the sums to the IRS — but the IRS cannot catch individuals disobeying the law without knowing who they are and where their accounts are held.

The annual deadline for reporting foreign accounts to the US tax authorities is June 30.

President Obama has made the eradication of tax evasion through offshore accounts one of his main concerns.

In February, UBS avoided criminal prosecution for helping rich Americans to avoid paying tax on assets held overseas. The bank paid $780 million in fines and disbursements and handed over the the names of more than 250 customers. Two of these clients have since been prosecuted. A day after UBS agreed to pay the penalty, the Justice Department brought its civil suit seeking many more names.

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