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* Switzerland has until Tuesday to hand over information
* U.S. wants thousands of client names like in UBS case
* Banks in focus include Credit Suisse, Baer, Wegelin
* Banks could face fine of up to 2 bln Sfr
By Emma Thomasson
ZURICH, Sept 4 (Reuters) - The United States has written to Switzerland to set an ultimatum to hand over detailed information on its citizens using Swiss accounts to dodge tax or see Credit Suisse and nine other banks face charges, newspapers reported on Sunday.
The letter, quoted by two Swiss Sunday papers, was sent by U.S. Deputy Attorney General James Cole on Aug. 31 and demands detailed figures on tax evasion at Credit Suisse by Tuesday and also seeks information from nine other smaller Swiss banks.
In the letter, Cole demands that Switzerland quickly deliver a significant number of client accounts, the Sonntagszeitung reported, adding that U.S. authorities are also ready to test a Swiss offer to settle the dispute under existing law.
A Swiss government spokesman quoted by both the SonntagsZeitung and the NZZ am Sonntag declined to comment and could not immediately be reached by Reuters.
Switzerland last month made a proposal to try to kickstart talks to settle its impasse with U.S. authorities, offering to hand over data on groups of clients despite strict bank secrecy.
A long tradition of bank secrecy has helped Switzerland build up a $2 trillion offshore financial industry, but the country has agreed in recent years to do more to help hunt tax cheats amid a global crackdown on tax havens.
The United States is pushing for Switzerland to hand over thousands more bank client names as it did last year when it allowed UBS to bend bank secrecy and reveal the details of around 4,450 clients to avoid criminal charges.
"They won't be contented with less than in the UBS case," former U.S. Justice Department investigator Peter Henning told the NZZ am Sonntag newspaper.
He added that the U.S. Internal Revenue Service felt betrayed because many UBS clients had shifted their assets to smaller Swiss banks rather than declaring them.
The Sonntagszeitung quoted Swiss sources close to the talks as saying Washington is seeking details of all U.S. clients with accounts worth at least $50,000 between 2002 and 2010 at banks including Credit Suisse, private banks Julius Baer and Wegelin as well as the Zurich and Basel cantonal banks.
That could imply tens of thousands of accounts, the paper said, far more than Switzerland could deliver under a double taxation agreement with the United States that it approved in 2009 but is still awaiting ratification by the U.S. Senate.
Switzerland is keen to find a solution that would not need approval from parliament, seen as likely to block any new breach of bank secrecy after only reluctantly agreeing to the UBS treaty under emergency law last year.
Swiss Finance Minister Eveline Widmer-Schlumpf reiterated that hope in an interview conducted with the SonntagsZeitung before the U.S. letter was received.
"We assume that we can settle the problems with the United States under existing law," she told the paper.
If Switzerland does not comply, the United States could issue a subpoena against the banks to force them to hand over data, as it did in the case of UBS, the SonntagsZeitung and NZZ am Sonntag reported.
"This will be much more expensive as with UBS that had to pay a fine of $780 million," one banking source told the SonntagsZeitung. "We expect that the Swiss banks will have to pay a fine of up to 2 billion Swiss francs ($2.6 billion) and deliver much more client data than in the UBS case."
Henning said he expected the United States to launch criminal charges against a smaller Swiss bank rather than Credit Suisse as it was too critical to the global financial system.
Last month, Switzerland struck deals with Germany and Britain to tax money kept by their residents in secret Swiss accounts and also introduce a withholding tax on future interest earned, a proposal rejected by Washington. ($1 = 0.783 Swiss Francs) (Editing by Mike Nesbit and Yoko Nishikawa)