TAKEN at face value, UK Chancellor Alistair Darling’s comments that there needs to be a long, hard look at the relationship between Britain and the Crown Dependencies pose a grave constitutional challenge to this island.

Indeed, his reference to the Isle of Man as ‘a tax haven sitting in the Irish Sea’ might reinforce the wisdom of Jersey having already investigated the steps it would need to take to become independent. Yes, that would be the nuclear option but the stakes – nothing less than the current economic prosperity of this community – have been raised by Mr Darling’s remarks.

Why should islanders be so alarmed by what he said despite yesterday’s apparent backtracking by officials? Firstly, because if as implied he has announced an inquiry or investigation into these islands’ relationship with the UK, it is a flagrant breach of protocol and has implications more significant than the imposition of the Edwards Report back in 1998.

Secondly, because for the Chancellor to describe the Isle of Man (or any of the Crown Dependencies) as a tax haven displays a truly alarming ignorance of the truth, and that is exceptionally dangerous at that level of government.

The Manx reaction is a clear indication of the concerns and the dangers inherent in Mr Darling’s remarks. The muted response here, islanders can be sure, reflects that this is an ‘oh my God…’ moment. Clarification is needed very swiftly if a constitutional clash is to be avoided.

Convention and the passage of centuries dictate that the official channel of communication between government and the islands is through the Crown and via the Ministry of Justice to the Lt-Governor as the Queen’s personal representative.

That does not appear to have happened and Mr Darling also seems to have breached the Government’s own guidelines on dealing with the islands.

We say ‘appears’ because the Ministry of Justice yesterday refused to discuss whether it had been consulted over the review of relations or been briefed on Mr Darling’s very careful and concise comments to a Treasury Select Committee.

So either this has been an almost unbelievable oversight by Mr Darling’s team or, as in the case of the Edwards incident, a calculated attack on links with these islands.

Whatever the explanation, relationships today appear very damaged.