A German newspaper reports that Swiss authorities have issued arrest warrants for three German tax inspectors over the purchase in 2010 of a CD containing data on suspected tax cheats.

The Bild am Sonntag newspaper said yesterday that the Swiss accused the officials of “economic espionage” in a letter to authorities in the German state of North Rhine-Westphalia.

It quoted state governor Hannelore Kraft as saying that the move was “monstrous”.

Kraft added: “The tax inspectors were only doing their duty to chase German tax cheats.”

The incident comes as opposition-led German states – including Kraft’s – are holding up a German-Swiss agreement meant to end a long-running spat over tax evasion by Germans.