Updated 4.50pm with video

Prime Minister Joseph Muscat vowed to do whatever he could to protect the financial services industry in the wake of an “unprecedented attack” unleashed through the release of the so-called Malta Files.

Malta had nothing to hide because it was operating a tax system in line with EU law, and which had become the envy of other states, Dr Muscat and Finance Minister Edward Scicluna told a hastily-called news conference.

The conference was called after journalistic network European Investigative Collaborations (EIC) said it had dug into over 150,000 documents that show how international companies take advantage of this system, using Malta as a pirate base for tax avoidance in the EU.

But the Maltese government hit back and insisted there is not a single offshore company in Malta. It equally dismissed as "ludicrous" press reports which claimed it was easy to open a bank account in Malta.

Unfortunately, instead of facing a common front in Malta they found us weak and split. This is not a case of blue or red- Scicluna

Malta had undergone all levels of scrutiny to ensure there were no distortions with EU legislation. The tax regime for businesses introduced in 1994 and sanctioned by the EU's DG Competition since membership.

"There were no complaints by EU states. And out of the blue, we face this calumny, intended to cause much harm to our financial services sector and remote gaming industries.

"The Financial Secrecy Index shows that our transparency levels are better than countries like Germany and Luxembourg," Dr Muscat said.

Joseph Muscat and Edward Scicluna.

Dr Muscat warned against painting a doomsday scenario for a sector which employs tens of thousands and instead advocated the need to go on the counter-attack and fight misconceptions with facts.

He rejected suggestions that the Malta Files were released because of the government's mishandling of the Panama Papers, and said it was probably timed to coincide with the country's EU presidency. 

"If need be I will pay the political price for the Panama Panama. But this story is different," he told reporters, appealing to the public not to take anything that appears in foreign newspapers at face value.

He appealed for a united front to protect the financial services sector and pledged that his party will continue doing so if it is voted into opposition on June 3.

Prof. Scicluna said Malta is the envy of other countries where it came to the financial services industry. “We will remain strong because we have nothing to be ashamed of. Certain countries want to benefit from the tax revenue we're raising.

"Do not underestimate the attempts to bully a small country. Unfortunately, instead of facing a common front in Malta they found us weak and split. This is not a case of blue or red. It will only cause damage," he said.