Vince Cable, the former Liberal Democrat business secretary who worked closely with the prime minister on his drive to tackle tax avoidance, says David Cameron got cold feet about the crackdown.

Cable, whose department took the lead on the key proposal to establish a public register revealing the ultimate owners of UK-listed companies, says the prime minister faced considerable pushback on the plans.

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“David Cameron’s view was a bit ambiguous,” Cable says. “He wanted to be leader of the pack in this transparency, tax thing; but I sensed at various points that when he saw what he had let himself in for, he started to get cold feet, and there was a certain amount of rowing back.”

Cameron gave a bold speech at the Davos summit of the world’s super-rich in January 2013 as the UK took up the rotating presidency of the G8 group of industrialised nations. He called for “proper companies, proper taxes, proper rules”.

But Cable, who lost his Twickenham seat at last year’s general election, says it became harder to match warm words with action as tax havens, including those with historical links to the UK, organised a concerted campaign of resistance to proposals for more transparency.

He fears that the set-piece policy of the coalition’s drive against tax avoidance – a public register of who owns Britain’s companies, which will come into force this month, and of which he is proud – may be undermined by the fact that low-tax jurisdictions have not imposed their own equivalent.

“There is a risk that you will simply drive more grey money offshore,” he warns.

In particular, Cable says he would personally have liked the coalition to take firmer action against British overseas territories, including the British Virgin Islands and the Caymans – including, if necessary, imposing direct rule from Westminster, an idea also mooted by the Labour leader, Jeremy Corbyn.

“What you would have to do is impose direct rule,” Cable says. “You would take the executive authority out of the hands of the local government, and the island would be run through the governor.”

He adds that London imposed direct rule on the Atlantic archipelago of the Turks and Caicos in 2009, when there were claims of corruption. “I think you could argue that what’s happening now is sufficiently serious” to justify imposing direct rule now, he says.

Cable says Cameron began his transparency drive with the best of intentions, but after a meeting with a delegation of representatives from tax havens who came to London to lobby against the idea of a public register, the prime minister “came away with his tail between his legs, and nothing happened”.

He adds that his own Whitehall civil servants warned against action. “The message we got from the officials was be terribly careful.”

The former business secretary does give Cameron considerable credit for pushing ahead with a register of interests in the UK, though – albeit one that will not include offshore trusts, of the kind the prime minister’s late father, Ian Cameron, had connections to.

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“My view was that trusts should have been included; but there’s some quite complicated legal arguments over it,” he says.

Cameron lobbied at a European level to prevent trusts being brought into an EU-wide register of interests, writing to the then president of the European council, Herman Van Rompuy in 2013: “It is clearly important we recognise the important differences between companies and trusts.”

Instead of being included on a register, trusts must disclose details of their ultimate owners to HM Revenue & Customs. But campaigners for tax transparency argue that prevents the scrutiny by civil society that can help to expose shady dealings.

Pressing for more action from tax havens may be one way the prime minister could achieve some progress at next month’s global summit on tax transparency, which he has promised to host.

Cameron used a recent trip to Jamaica to call for more transparency. “Some of the British crown dependences and overseas territories are making progress in this direction,” he said. “Others, frankly, are not moving anywhere near fast enough.

“I say to them all today, including those in this region, if we want to break the business model of stealing money and hiding it in places where it can’t be seen: transparency is the answer.”