The UK deputy prime minister, Nick Clegg, has pledged to support all "transparent" tax jurisdictions.
He was speaking at the 15th meeting of the British-Irish Council held in the Isle of Man on Monday.
Mr Clegg's statement comes as the European Union examines the effects of the island's Zero-Ten tax regime.
He said: "Tax jurisdictions shouldn't create perverse incentives to investors and so deprive exchequers of legitimate income".
"We will continue to promote and defend the Crown dependencies but only within the context of wider moves within the European Union in order to make sure there is full transparency," he added.
The British-Irish Council was established in 1998 to develop strong links between its members which include Britain, Jersey, Guernsey, Wales, Ireland, Northern Ireland, Scotland and the Isle of Man.
The next summit will be hosted by the UK government in 2011.