The lower house of Switzerland’s parliament has refused to debate a bill that would allow Swiss banks to pass client information to the US tax authorities.

The bill is the result of pressure from the US following revelations that Swiss banks had helped American account holders to evade taxes.

The US had demanded action by 1 July, but the Swiss parliament summer session ends this week.

The bill will now return to the Senate.

The lower house decided by 126 votes to 67 not to discuss the bill. A second rejection by the lower house would effectively kill the draft law.

The bill would allow Swiss banks to sidestep strict secrecy laws and release information relating to clients’ accounts.

It also contained secret clauses requiring the banks to pay an estimated $10bn (£6.4bn) in compensation for lost tax revenue.

Swiss politicians are in no mood to change their laws because Washington tells them to, reports the BBC’s Imogen Foulkes from Berne.

The Senate very reluctantly approved the bill last week, after it became clear the US would indict Swiss banks, and possibly even cut them off from the dollar market if it did not go through.

A long tradition of banking secrecy is becoming a political crisis for Switzerland, adds our correspondent. Switzerland has also come under pressure from the EU over the issue.

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