German Credit Suisse CD deal was illegal: lawyers

“They have committed an offence,” Dusseldorf tax lawyer, Thomas Koblenz, told newspaper Tages Anzeiger.

Koblenz and others are calling for the German public prosecutor to look into the actions of the three tax inspectors from North Rhine-Westphalia against whom arrest warrants have been issued in Switzerland for economic espionage.

He believes they are guilty of several offences, including the unauthorized acquisition of confidential commercial data.

In 2010, the Dusseldorf prosecutor's office raided branches of Switzerland's second biggest bank in 13 German cities as part of a probe of 1,100 clients and bank staff suspected of hiding funds from tax officials. 

The raid came after officials in North Rhine-Westphalia paid a reported €2.5 million (3 million francs, $3.2 million) for a computer disc containing information on wealthy Germans linked to the investigation. 

In Gemany, opinion is divided on the contentious deal. Jürgen Trittin, a Green Party politician, has said it is “outrageous” that the tax inspectors have been portrayed as criminals.

Others agree, with German regional authorities saying the inspectors had done "their duty" by pursuing German tax evaders who were hiding money in Swiss bank accounts.

“The inspectors are not the culprits, but those who cheat,” Regional Minister of Finance, Norbert Walter-Borjans, told newspaper Blick.

Arrest warrants were issued on the German trio in the latest development in a long-running spat between the two countries.

So far the German government has refrained from criticising the Swiss action, newspaper Tribune de Genève reported.

Chancellor Angela Merkel is said to have reassured her colleagues that the tax treaty currently under negotiation between Switzerland and Germany will not suffer as a result of the deteriorating relationship between the two countries.

However, many German politicians are said to be sceptical about the future of a proposal that would make German investors in Switzerland pay the same amount of tax as they do at home.

"The climate for further negotiations has been permanently damaged," Joachim Poss, the parliamentary leader of the German Social Democratic Party, told the Saarbrücker Zeitung. "The risk of failure has increased."