German prosecutors launched an investigation into Commerzbank and its clients late on 24 February in connection with suspected tax evasion involving accounts in Luxembourg.

Commerzbank said in an emailed statement that it was fully cooperating with the investigation which it said concerned old cases that date back 10 years or more.

Prosecutors in Cologne confirmed they were investigating parties whom they suspected of hiding capital gains with Luxembourg banks.

They declined to comment on the identities of the people and institutions involved, but said more than 130 tax inspectors and 20 police officers had been involved in raids on offices across the country.

Luxembourg is already in the spotlight over tax following allegations last year that more than 300 companies had secured secret deals to slash their tax bills.

Norbert Walter-Borjans, finance minister of the state of North Rhine said the latest raids showed the need for changes to the law so that companies could be called to account as well as employees.

"Without prejudging anyone -- and I want to underline that -- we need to see what facts exist," Walter-Borjans said.

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