Geneva - UBS AG, the Swiss banking giant, will hand over to US authorities information on some 4,450 accounts within a year, as part of an out-of-court settlement reached between Bern and Washington and signed on Wednesday.

The US had demanded initially data on some 52,000 accounts, which, it claimed, included clients who evaded paying their taxes while hiding behind Swiss banking secrecy.

The 4,450 accounts - estimated to hold some 18 billion dollars - come on top of data of some 250 accounts that was already handed over in February, when UBS also agreed to pay a fine of 780 million dollars.

This time, the bank would not have to hand over cash, having rejected a proposal by the Swiss government that it pay but avoid handing over client data.

UBS has admitted its employees helped clients evade paying taxes, in some cases committing fraud.

The head of the Internal Revenue Service, the US taxman, Douglas Shulman, called the deal an "unprecedented agreement" that would ultimately yield data on 5,000 accounts from UBS.

"My personal view is that getting 5,000 names from one financial institution blows a big hole in bank secrecy, and is clearly a victory for the US government," Shulman said, noting that until recently the US had no reach behind the veil of Swiss financial confidentiality.

The IRS was never interested in the full 52,000 accounts, he told Bloomberg Television, and promised to continue to crack down on tax evaders.

The deal with Bern, the fine details of which would be released in 90 days, would see the US authorities submit a treaty request to the Swiss government for the accounts on which it wants information. The government will then instruct UBS to hand over the data.

"It is expected that approximately 4,450 accounts will be provided to the SFTA in response to this treaty request," UBS said, referring to the Swiss Federal Tax Administration.

"The SFTA will decide which of those accounts should be disclosed to the IRS, and such decisions will be subject to judicial review," the statement by the banking giant read.

While noting that the deal would bode well for UBS, Panagiotis Spiliopoulos, the head of research at Vontobel, a Zurich-based private bank, said the result was not as good for the general financial sector in Switzerland.

He noted that the Swiss government "gave away quite a bit," and the door was left open for the US to push for information on clients at others banks if there was a pattern matching the one at UBS.

The agreement also allows for "fishing expeditions," meaning the IRS could ask for data on accounts, even if it did not posses the name of the clients. The Swiss government had consistently said it would not allow for such searches.

Others noted that the deal appears to break Switzerland's longstanding differentiation between tax evasion and tax fraud, with the latter being a more serious offense not protected by banking secrecy.

"The term 'tax fraud or the like' is not restricted to conventional forms of fraud involving falsified documents or schemes of lies. Information may also be obtained with regard to serious tax offenses, specifically the continued evasion of large sums of tax," the Swiss government said.

Ministers had indicated in recent months that this gradual relaxation of secrecy rules were to be expected.

The Swiss Bankers Association welcomed the out-of-court deal, saying it avoids a prolonged legal battle that would have had an uncertain outcome. The deal was in line with the existing bilateral taxation agreement and prevailing Swiss law, the bankers group said.

"This agreement helps resolve one of UBS's most pressing issues," the bank's chairman, Kaspar Villiger, said in a statement.

"I am confident that the agreement will allow the bank to continue moving forward to rebuild its reputation through solid performance and client service," Villiger said.

UBS will send notices to affected US clients encouraging them to participate in the IRS's voluntary disclosure practice, the statement added.

The programme to come clean remains open until September 23.

As clients in the US spill their wrongdoings to the taxman under the deal, they have admitted to holding undisclosed accounts in numerous banks in Europe, including several in Switzerland.

The "John Doe summons" against UBS was filed by the US authority on June 30, 2008. The case has caused tensions between Bern and Washington, and an end to the saga is expected to also help strengthen relations between the friendly governments.

The legal proceeding against UBS in a Miami court would be paused until the handover reaches an ultimate conclusion, after which, it would be withdrawn.

The affected clients can still try to block a transfer through the Swiss justice system.(dpa)