Furious MPs have accused Britain’s tax authorities of 'failing' the public by letting thousands of people stash their cash in Swiss bank accounts.

The Chair of the House of Commons Public Accounts Committee Margaret Hodge said she was furious at the 'pathetic' response to leaked HSBC files which showed thousands of British-linked individuals held bank accounts in Switzerland.

It came after revelations HM Revenue and Customs received a list of 6,800 HSBC customers with Swiss bank accounts five years ago – but had only managed to prosecute one person, despite £135million in owed tax being recovered.

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Margaret Hodge said she was furious at the 'pathetic' response to leaked HSBC files showing thousands of British-linked individuals held bank accounts in Switzerland

Mrs Hodge said HMRC had failed to serve British taxpayers' interests in their response to the leak in 2010.

David Cameron was earlier accused of being 'up to his neck' in the Swiss bank account scandal after it emerged that a string of the individuals with Swiss accounts were Tory donors.

In a fiery Commons debate, the Prime Minister insisted 'no-one had done more' than the current government to crack down on tax avoidance.

But Mr Miliband said the PM was 'bang to rights', adding: 'He can't get away from it – he's a dodgy Prime Minister, surrounded by dodgy donors.'

Mrs Hodge meanwhile laid the blame at the door of the tax authorities for failing to act on the leaked list of Swiss bank account owners.

She said the activities related to the Geneva branch of HSBC's Swiss subsidiary were 'pretty outrageous'.

HMRC chief Lin Homer defended her record prosecuting tax dodgers

HMRC was offered a copy of a disk detailing HSBC clients who had potentially avoided tax seven years ago – but ignored it.

Mrs Hodge told HMRC chief Lin Homer that taxmen should have spoken to whistleblower Herve Falciani, who initially obtained the list while employed as an IT worker in 2007.

Ms Homer insisted that HMRC staff had been 'diligent' in their approach to the files, and said their record of securing one conviction and £135 million in unpaid tax, fines and interest compared well with other countries.

But Mrs Hodge told her that the French tax authorities had recouped £200 million from 3,000 names and the Spanish £180 million from 2,900.

And she told the HMRC chief: 'It's pretty outrageous what was going on.

'It's the first time in many of these leaks that there are really strong allegations not of egregious tax avoidance, but of tax evasion, and that is incredibly serious.

'For you to sit there and say, as you are doing, that ‘We couldn't get the money in in the same way as the French and Spanish did’ and ‘We didn't litigate because we wanted to get the money in’ and yet you did worse on the money - it leaves me believing that you are not serving the British taxpayer.'

She added: 'The worst that can happen to you, if HMRC can be bothered to catch up with you, is that you may have to pay, you won’t have a prosecution, you won’t have any shame, you won’t be an example to anybody else, you will get away with it.

'That’s a terrible message to give out to British taxpayers.'

Responding to Ms Hodge's comments, Ms Homer insisted ‘that is absolutely not the case' and denied the agency had a 'soft' approach to tax avoidance.

Some 300 staff, led by three directors, had been sifting through the data supplied by French authorities in 2010 and had traced 3,200 individuals, including 150 ‘most serious’ cases which could be considered for criminal prosecution, 500 which were ‘more serious’ but not likely to meet the criminal threshold and 400-500 which could be pursued for disclosure and settlement.

Tory MP Stephen Phillips said the decision to prosecute just one person sent out the message that there was little risk in dodging tax.

Ms Homer, who was branded ‘Ms Incompetence’ over her record at the UK Border Agency, said prosecutions were expensive and needed stronger evidence.

She also insisted the agency’s poster campaigns were effective in reducing tax avoidance.

Ed Miliband today accused David Cameron of being 'up to his neck' in the Swiss bank account scandal

But the Prime Minister said no government had done more to tackle tax avoidance since coming to power

Ms Homer, who was appointed to lead HMRC in 2012, said she believed the authority would have told Government ministers about the data within months of receiving it.

‘We are confident we will have told ministers that we were about to receive a big tranche of operational information,’ she said. ‘We will have told people, including ministers, I suspect some time in the next few months.’

HMRC had previously told the committee that it hoped to bring about 15 cases to prosecution, but in the event three were passed on to the Crown Prosecution Service, which decided to take just one to court.

HMRC officials are meeting with other agencies later this week to discuss a new investigation, the committee heard.