A deal to resolve the US government's bruising tax battle with Swiss banking giant UBS was jeopardised today when Switzerland's lower house rejected a bill that would have allowed the government to provide the US with the names of UBS account holders allegedly dodging American taxes.

Last August, the US and Switzerland reached a deal to settle a case involving hidden offshore accounts at UBS. US authorities accused the bank of having helped thousands of Americans avoid paying taxes at home by setting up secret offshore accounts. UBS admitted wrongdoing and agreed to hand over the names of 4,450 of US account holders to the US Internal Revenue Service by August.