The move follows the confession of former UBS banker Bradley Birkenfeld to a Florida court last week that he conspired to help wealthy US clients avoid millions of dollars in taxes.

Swiss officials from the justice and finance ministries have already travelled to Washington for talks with their US counterparts amid fears the case could damage the overall reputation of Switzerland's financial sector.

"In the context of legal cooperation, it is possible that foreign authorities can be present during investigations," justice ministry spokesman Folco Galli told the Swiss weekly Sonntag.

"However, they are not allowed to conduct the investigations themselves, that is for the Swiss authorities," he said.

Mr Birkenfeld pleaded guilty to conspiring with co-defendant Mario Staggl to hide $200 million, which was liable to $7.2 million in US taxes, through an elaborate system of fraud, the US Department of Justice said.

He admitted that between 2001 and 2006, while he was a director of UBS' private banking division, he met frequently with wealthy Americans wanting to conceal their assets abroad.

Mr Birkenfeld said he and Mr Staggl as well as other managers, also advised clients to conceal their assets by buying jewels, art and luxury goods using the money in their Swiss accounts and then deposit them in Swiss safety boxes.