According to reports in the European media, the Prince, Monaco's leader, agreed to start negotiations for a bilateral agreement between the two states' revenue authorities, following his meeting on Wednesday night with German Chancellor Angela Merkel.

"The prince gave his agreement to cooperation between the German and Monaco authorities as well as improved data exchange in the fight against tax fraud, money laundering and corruption," a German government spokesman told AFP.

The Monagasque authorities have not yet commented officially on the possibility of a tax agreement between Monaco and Germany, although Finance Minister Gilles Tonelli revealed to a news conference that: "Monaco does not intend to distance itself from a general movement of information exchange as long as it is really applied by everyone."

The reports suggest that Monaco is perhaps more open to the idea of sharing information with OECD member countries and other governments than Liechtenstein, which has pledged to tighten its privacy laws in the wake of the international tax evasion scandal that erupted when the German intelligence service bought a stolen computer disc containing names of clients of Liechtenstein's LGT Bank.

Indeed, Prince Albert has made it his priority to clean up Monaco's image as a secretive tax haven, telling France's TF1 that: "We must absolutely free ourselves of this equation that Monaco equals laundering."

At present, Monaco remains on the OECD's list of allegedly "uncooperative tax havens", but it is thought that its willingness to cooperate with Germany and other OECD countries could help secure its removal from the blacklist.