Jersey's controversial business tax system is no longer harmful, a key group of European officials have concluded.

The news is likely to put to rest fears that Jersey could have to scrap the tax structure and have a massive new black hole.

Finance industry leaders said that the announcement was great news for Jersey and meant that island could "go back out with a strong message to win business around the world."

At a meeting in Brussels the EU code of conduct group on business tax approved the amendments to the controversial zero-ten business tax rules made by the island's parliament, the States, last year and effectively gave Jersey's tax system the all-clear. Their decision will have to be ratified at a meeting of European finance ministers in December, but ministers in Jersey have been celebrating the development.

During the past year, the UK Government has been critical of Jersey's corporate tax regime. No statement has yet been made about the ruling.

The EU told Jersey last year to change its zero-ten tax system, which charges businesses in the finance industry at ten per cent rate, while non-finance companies pay a zero business tax rate. The tax was deemed harmful by Europe as there was a clause