German states run by the left-of-centre Social Democrats want to block a bilateral disclosure agreement between Switzerland and Germany reached last month designed to tax previously undisclosed money in Switzerland, reports said.

Carsten Kuehl, who coordinates SPD state finance ministers and holds the post in Rheinland-Pfalz, told Berliner Zeitung his party would oppose the agreement in the upper house of parliament, where states are represented and where the ruling coalition does not hold a majority.

"After all we have learned, through various ways, we cannot vote for this agreement," he said in an advance copy of the comments. "An important agreement will fail due to justified outrage over lazy compromises,” Kuehl is reported as having said.

The report did not state if the SPD-controlled states are in a position to derail the agreement or just amend it slightly. The existing coalition federal government in Berlin is currently under heavy pressure to win support for bailouts of debt-stricken eurozone nations such as Greece.

Opponents are concerned that the Swiss-German agreement is too lenient on people who had stashed money in Switzerland. A few days ago, the UK and Switzerland came to a similar deal under which citizens with accounts in Switzerland pay taxes on undisclosed sums – depending on how long money had been held offshore.

German relations with Switzerland have been strained in recent years, with Germany accusing Switzerland, which does not treat tax evasion as a crime, of encouraging wealthy citizens to stash money offshore and bleeding Germany of vital tax revenue. German public authorities have paid for stolen private bank data in recent years, such as in the case of LGT, the Liechtenstein private bank. Such behaviour emphasises how determined Germany has been to track down tax evaders, although it also raises issues such as respect for due process of law.

In the specifics of the German-Swiss deal, existing German citizens' accounts in Switzerland will be taxed at a rate between 19 and 34 per cent, with the sum depending on how long money had been held in Switzerland and also on the rate of capital gains. Future investment income and capital gains would, if the agreement is approved, be taxed at a rate of 26.4 per cent, matching the existing flat-rate withholding tax in Germany.