Financial watchdog demands action from UK banks and businesses after Panama Papers leak

Banks and financial firms have until April 15 to check their records Credit: PA

The UK's financial watchdog has ordered banks and businesses to check whether they have any links to a law firm at the centre of the Panama Papers leak.

According to a letter seen by the Financial Times (£), the Financial Conduct Authority (FCA) said banks and other money-related firms have until April 15 - one week - to investigate possible ties to Mossack Fonseca and its subsidiaries.

It comes after more than 11 million documents from the law firm - which is based in Panama - were leaked to the media, revealing dealings with politicians, celebrities and business leaders around the world.

The leak has sparked public protests, allegations of money laundering and tax evasion, and prompted the resignation of Iceland's Prime Minister.

The FCA said financial companies must reveal what action they are taking after the papers revealed around 500 banks registered almost 15,600 shell companies with Mossack Fonseca.

Protesters in Iceland demanded the Prime Minister step down following revelations from the leak Credit: Reuters

HSBC, Credit Suisse and the Royal Bank of Scotland-owned Coutts Trustees have denied claims that they have been helping clients avoid tax by using the often-complex offshore structures.

In the letter - which is believed to have been sent to 20 businesses - the FCA states that any overseas branches or subsidiaries outside Europe must meet UK accounting standards,