THEY are known as “treasure islands”, the tax havens where the wealthy can secrete their money.

The idyllic setting of the British Virgin Islands has been the most popular of them because of limited regulation and nominal taxation; around half of the 200,000 companies revealed in the Panama Papers use the Caribbean overseas territory to stash their cash.

Labour leader Jeremy Corbyn has urged the UK Government to consider imposing "direct rule" on such British overseas territories and crown dependencies if they are found not to have complied with UK tax law.

While such remnants of empire are self-governing, their autonomy can be removed and direct rule from London imposed as happened seven years ago on the Turks and Caicos islands when evidence of corruption was discovered among the ruling elite.

Self-government was only restored four years ago after the islands’ government implemented new rules around sharing tax information.

Yet despite several years of pressure for more transparency from Whitehall, not all of the UK’s overseas territories and crown dependencies have taken concrete action to open up their books.

The vast array of documents from the Panamanian law firm Mossack Fonseca shows Jersey, a crown dependency, among its international offices. They also claim Coutts, a branch of RBS, asked for nearly 500 offshore companies to be set up through the Jersey operation, Credit Suisse requested more than 900 across the Channel Islands operation and Rothschild nearly 400 in Guernsey.

No 10 yesterday, feeling the political heat, released a briefing on what it had been doing to root out tax evasion and aggressive tax avoidance, noting how David Cameron was determined that not only the UK but also its overseas territories and crown dependencies should be “ahead of the pack”.

Since 2013 and the G8 summit when the Prime Minister issued his famous warning to tax-dodging companies like Starbucks to “wake up and smell the coffee”, No 10 has been keen to point out that more than 90 countries have signed up to the automatic exchange of tax information.

Downing Street noted: “We are close to agreement with the crown dependencies, Bermuda and Gibraltar but we need to get Cayman Islands and British Virgin Islands over the line and are determined to work with them to do so by the time of the summit in May.”

This is the anti-corruption summit, the UK is hosting in London to try to get a much tougher global regime on tax transparency.

Given the embarrassment caused by the leak of the Panama papers, one would hope governments would now be more willing to pursue such a course and root out any illegality.

Yet this might be a forlorn hope as it is clear the tentacles of the Panama Papers scandal reach far and wide, including into some murkier parts of the globe.

The leaked data points to links to 12 current or former heads of state, including dictators, who have been accused of raiding their own countries’ coffers.

Relatives of several current or former Chinese leaders have been found to have links to offshore companies; although the state media has declined to inform the Chinese people of this embarrassing development.

Close associates of Russian President Vladimir Putin have been fingered only for the Kremlin to assert that it is all part of some sinister Western plot to do down its leader.

There are now investigations from Australia to America while in Iceland, its embattled Prime Minister, Sigmundur Gunnlaugsson, accused of concealing millions of dollars-worth of investments in an offshore company, has paid the ultimate price and resigned.

And here in the UK the scandal is threatening to sneak under the door of No 10 after it emerged that Mr Cameron’s late father was a director of Blairmore Holdings Inc - named after the old ancestral home in Aberdeenshire – which used unregistered "bearer shares" to protect its clients' privacy.

Ian Cameron’s use of the firm to help shield investments from UK tax helped build up a significant legacy, part of which was inherited by the PM.

Of course, there is no suggestion this avoidance arrangement or others exposed by the leak were anything but entirely legal or that Mr Cameron's family did not pay the UK tax due on any repatriated assets.

But the focus on the Tory leader has helped Mr Corbyn maintain the political pressure on Mr Cameron following the Conservative Government’s discomfort on disability benefits and the UK steel industry.

Journalists’ enquiries about the Panama Papers and the Cameron connection have been dismissed brusquely as old hat; one query about whether or not the family still benefited from an offshore fund was met with a terse insistence that this was “a private matter”; nothing to see here, let’s move on.

But this was never going to go away that easily. And so it is proving.

Mr Corbyn has demanded an independent investigation into all the tax affairs of those implicated in the Panama Papers data leak; happily for him, this includes the Cameron clan.

When it was put to him that No 10 had insisted the PM’s family tax affairs were a private matter, the Labour leader noted: "It's a private matter in so far as it's a privately held interest but it's not a private matter if tax has not been paid. The Prime Minister, in his own interest, should tell us exactly what’s been going on.”

During a Q&A at an EU campaign event in the Midlands, Mr Cameron did his best to close the issue down by declaring: “I own no shares, no offshore trusts, no offshore funds, nothing like that. And so that is a very clear description."

Not quite. The question was about the Cameron clan and whether or not his family had reaped the rewards of the offshore arrangement in the past or were likely to in the future.

An exasperated No 10 subsequently rushed out another statement, saying: “To be clear, the Prime Minister, his wife and their children do not benefit from any offshore funds. The Prime Minister owns no shares.

“As has been previously reported, Mrs Cameron owns a small number of shares connected to her father’s land, which she declares on her tax return.”

Tory high command is urging Mr Corbyn to put up or shut up as the Labour leader seeks to gain political advantage during this election period by capitalising on public anger about tax evasion, which could have deprived the Exchequer of billions of pounds of revenue over the years.

Certainly, anything that feeds the notion of Tory toxicity will not help Mr Cameron and certainly not help Ruth Davidson as she tries to ensure the Scottish Conservatives leapfrog Labour in the Holyrood election on May 5.

With so many documents leaked and whose contents are yet to be revealed, the controversy will rage on for many days if not weeks.

Ironically perhaps, the motto of the British Virgin Islands is “be vigilant”; the leak of the Panama Papers has exposed a lack of vigilance, which has already unleashed serious political consequences, the final extent of which are still unknown and could yet reach the UK.