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The way the crown dependencies of Guernsey, Isle of Man and Jersey represent themselves internationally could change.

In a response to a report on the islands, the UK Ministry of Justice said they could make greater use of 'letters of entrustment'.

These are currently used for tax agreements with other countries.

They could be used to allow the islands to enter agreements where their needs are different to those of the UK.

The report said: "This could help mitigate the potential difficulties on occasions where the Crown Dependencies need to pursue interests which are separate from those of the UK."

Sir Alan Beith MP, the Lib Dem Chairman of the Justice Committee that created the original report, said he didn't know why the Government had not accepted their findings on the islands representing themselves.

He said: "I am surprised that the Government has not accepted in full the Committee's recommendations regarding the need for the Crown Dependencies' interests properly to be represented internationally when they conflict with those of the UK Government.

"People who had savings in Isle of Man-based banks during the Icelandic bank collapse had good reason to feel that their interests could not be represented fairly by the UK Government."

The Ministry of Justice said they would support the islands in setting up an office in Brussels.

It said: "The wish of the Islands' governments to set up representative offices in Brussels is one the Ministry of Justice would support and we are open to any requests for assistance in achieving this sensible objective."