The Caribbean island was originally included amongst 35 jurisdictions on a OECD blacklist of 'uncooperative' tax havens published in November last year.

But in a joint statement, the OECD and Barbados said the island would be excluded from the next blacklist due to be published at the end of February, after it agreed to extend its existing bilateral agreements with major economies to all OECD member-countries.

The statement read: 'Discussions have shown that Barbados has transparent tax and regulatory systems and has in place a mechanism that enables it to engage in effective exchange of information.'

It has joined the Isle of Man and the Netherlands Antilles, who in December committed themselves to eliminating harmful tax practices by 2006, after first refusing to comply with the OECD.

Other tax havens to commit to reforms include Tonga, Bermuda, the Cayman Islands, Cyprus, Malta, Mauritius and San Marino.

The OECD's drive to eliminate harmful tax practices seeks undertakings from tax havens that their operations be transparent, non-discriminatory and that they effectively co-operate with the organisation in all their financial dealings.