Mr Darling made the remarks on Monday when answering questions at the Treasury Select Committee on the UK’s approach to Icelandic banks and the position of depositors with Kaupthing Singer & Friedlander Isle of Man.

Brown said: "Alistair Darling’s comments were most unfortunate, to say the least. He did not seem to be aware that the relationship between the United Kingdom and the Isle of Man has already been reviewed, and that an agreement reinforcing that relationship was signed by the Lord Chancellor on behalf of the UK government in May last year.

He added: "Mr Darling made no mention either of the new tax co-operation agreements signed between the Isle of Man and the UK just five weeks ago, on September 29."

The Chief Minister continued: "While Mr Darling appears to be in the dark over this issue, the position of the Isle of Man government is clear. We are not asking the UK for any favours, but they do have a constitutional responsibility to represent us internationally. We have also pointed out, in support of depositors with the local bank, that the closure of Kaupthing Singer & Friedlander in the Isle of Man was the direct result of actions taken by the UK Government."

Darling told the committee that, in the light of the events surrounding the Kaupthing Singer & Friedlander affair "we really do need to have a long hard look about the relationship between this country (the UK) and the Isle of Man, a tax haven sitting in the Irish Sea."

He added: "We can't have a situation where you have sitting there all sorts of tax advantages accruing to being in the Isle of Man and when things go wrong people then say what about the British compensation scheme. So it is important that we take this opportunity, not rushing into it, not a knee-jerk reaction… but I think we do need to have a look at it and indeed that is something your committee might want to have a look at as well.”