* Swiss data handover complicated by secrecy laws
* Julius Baer ordered to hand over client files
* Credit Suisse urges painful deal over none at all
* Other banks targeted include Julius Baer, HSBC, Pictet,LLB
By Katharina Bart
ZURICH, May 29 (Reuters) - The Swiss government is expectedto set out soon how it wants to seal the settlement of along-running tax dispute with U.S. authorities over banksaccused of helping wealthy Americans evade billions of dollarsin tax.
A government-brokered settlement is largely agreed,according to sources, and is expected to involve fines of up to$10 billion and a handover of client names.
But Finance Minister Eveline Widmer-Schlumpf needs to find away to make the deal palatable in Switzerland, given thecountry's tradition of strict bank secrecy which has helpedbuild a $2 trillion offshore financial industry.
At its regular meeting on Wednesday, the seven-member Swisscoalition cabinet is expected to debate how to get the deal donewith as little domestic political fallout as possible, sourcesin the government said.
The Swiss government and the country's banks have argued formonths over how to divvy up the expected fines, and an initialattempt at an industry-wide deal failed as the banks could notagree who should pay what. Since then, negotiations have centredon the banks reaching individual settlements.
Credit Suisse Chairman Urs Rohner warned that the UnitedStates could escalate the fight against the Swiss if years ofnegotiating efforts fail now due to political opposition.
"What looks to be a painful solution at first glance isbetter for everyone than none at all," Rohner told Tuesday'sNeue Zuercher Zeitung (NZZ) daily in an interview.
CLIENT NAMES
About a dozen banks are already under formal U.S.investigation and are expected to reach deals in coming daysinvolving heavy fines.
They include Credit Suisse, Julius Baer, Britishbank HSBC's Swiss arm, privately-held Pictet in Geneva,and a host of smaller players such as LLB's Swiss arm and local government-backed Zuercher Kantonalbank and BaslerKantonalbank.
In a sign of rising U.S. pressure, Julius Baer confirmed onTuesday it had received an order from the Swiss authorities tohand over U.S. client data based on an existing Swiss-U.S. taxtreaty.
The U.S. authorities are believed to want the names ofthousands more clients as well as fines in return for endinginvestigations, and Widmer-Schlumpf is trying to find a way toallow that to take place.
To do so, the government needs to agree a legal frameworkunder which the data can be handed over.
The Swiss parliament agreed in 2010 to allow UBS to circumvent secrecy laws to hand over more than 4,000 files onits U S. clients as part of a $780 million settlement, butlawmakers have vowed not to approve such a deal for other banks.
Time is also of the essence. The Swiss government is sizingup how to fast-track a deal through parliament; U.S. officialswant bank data handed over within 120 days of striking a deal,according to sources.
The spat has already taken a high-profile toll among thebanks targeted: Wegelin, Switzerland's oldest bank, foldedearlier this year after paying nearly $58 million and admittingit helped wealthy Americans evade taxes.