HSBC Private Bank, a Swiss unit of banking giant HSBC, has agreed to pay €300m to avoid going to trial in France for enabling tax fraud, prosecutors said today.

HSBC was accused last year of helping French clients to hide at least €1.67 billion from the tax authorities, according to a source close to the probe.

The deal struck between the financial crime prosecutor's office and the bank is a first in France under a new procedure.

This allows companies under suspicion of corruption or dissimulation of tax fraud to negotiate a fine to stop a case from going to trial.

The deal does not include a guilty plea.

French prosecutors have now dropped the case against HSBC Holdings.