Smash hit

Although Britain currently appoints a governor to run the islands, political control is ceded to an elected assembly. That is expected to change on Wednesday when the FCO’s proposal is put before the Queen. It will then be laid before Parliament on March 25.

The inquiry into the islands’ administration was launched last year after a highly critical report by the Commons Foreign Affairs Select Committee which found “a palpable climate of fear” on the Caribbean islands.

Sir Robin could recommend criminal investigations in his final report, which is due in April. Mr Wetherell said authorities are considering the need to bolster police resources and appoint a special prosecutor in anticipation of evidence that crimes were committed.

During five weeks of evidence at the Regent Palms Hotel on the island of Providenciales, Sir Robin has heard remarkable accounts of political life in the British Overseas Territory.

The commission has heard allegations that some of the islands' politicians have been involved in the sale of government-owned “Crown land” and have received generous loans from the banks that operate in the tax haven.

Mr Misick has received undeclared loans of $20 million (£14 million) from a number of financial institutions, foreign companies and members of his Government, the inquiry has heard.

He is not only the islands' leader but also a real estate agent, a consultant to a firm of lawyers and a director of a number of property companies.

Mr Misick repeatedly denied any wrongdoing during four days of questioning, insisting that his failure to register income and company directorships was normal practice on the islands and that he had enough assets to cover the outstanding loans.

When asked to explain why he was paid more than the British Prime Minister, he replied: “I have done more for the Turks and Caicos than Gordon Brown has done for England.” He said that his spending of government funds was not for his personal benefit. “As Premier I am here today and in this business we are here today, gone tomorrow. It is not about me, it is about building the institutions for this generation and the generation to come.” His government “may have made mistakes”, but he was confident that no laws had been broken.

The inquiry's star witness was his estranged wife, an actress in the hit American sitcom All of Us and a successful model.

Ms McCoy Misick, who was addressed on the islands as First Lady (a title normally reserved for the governor's wife), described the couple's lavish lifestyle after they met at an awards ceremony in 2005.

During their courtship Mr Misick paid $100,000 to hire a private jet for flights between the islands and her Hollywood home two or three times each month, she said. After their marriage they used private jets to take a holiday in Africa, visit her daughter at the school she attended in Switzerland and for trips to Milan, Prague and Los Angeles.

According to her evidence, they also flew to London on an official visit, during which they visited Harrods and Liberty. Mr Misick spent £190,000 on jewellery and charged more than £600,000 to an American Express account with his wife in 2006, the inquiry was told.

Ms McCoy Misick, 31, admitted spending up to £137,000 a month on clothes to fit her new “First Lady lifestyle” and said that there was “no limit” on the couple's spending.

The inquiry was told that Mr Misick, who is also the Tourism Minister, arranged for her to be paid $300,000 from government funds to be the face of an international tourism campaign.

Ms McCoy Misick said she did not know that her husband had a teenage daughter until two months after they married and described her shock at recently learning that he had fathered a second child who was born a year after their wedding.

The couple's relationship ended last summer soon after Mr Misick was investigated over the alleged rape of an American citizen - not his wife - in Puerto Rico. The Premier strenuously denied any wrongdoing and the allegation was later dropped.

To add to Mr Misick's difficulties, the islands are included in a list of 37 “suspect jurisdictions” in the United States' Stop Tax Haven Abuse Act, supported by President Obama. Alistair Darling, the Chancellor, has ordered a review of the regulation of bank accounts in tax havens including the Turks and Caicos amid concern at the risk to British taxpayers.

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