The government of Liechtenstein has announced it is setting up a panel of historians to assess the principality's history during World War Two.

In a statement issued on Friday, the government said the commission would examine charges that Liechtenstein helped Nazi Germany by sheltering money stolen from Jews.

Vaduz said if necessary it would ease financial secrecy laws to let the commission do its work properly by delving into the wartime records of banks, trustees, asset managers and lawyers.

The panel, which will include historians from Liechtenstein, Switzerland and Austria, should start work early next year.

The World Jewish Congress has alleged that Liechtenstein aided the Nazis during and after the war, and that local financial institutions helped Hitler's henchmen hide gold, currency and stolen artwork.

WJC executive director, Elan Steinberg, said in New York: "The national archives do make it clear that Germany cloaked assets in Liechtenstein. We welcome the decision of Liechtenstein to honestly confront its past."

For several months, the WJC has been pressing the principality to investigate the extent of any cooperation it gave the Nazi war machine as other European nations and the United States have done.

Last month, a US judge approved a plan to share out a $1.25 billion dollar settlement agreed between Swiss banks, UBS and Credit Suisse, and Jewish groups over Holocaust era assets.

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