MADRID, March 30, 2008 (AFP) - Authorities in the tiny European principality of Liechtenstein have frozen bank accounts suspected to be linked to Spain's Basque separatist group ETA, a newspaper reported Sunday.

The move followed a request from Spanish judge Baltasar Garzon, El Pais said, adding that the money came 'from extortion funds imposed on entrepreneurs in the Basque and Navarra' regions of Spain.

It said ETA, which is blamed for more than 800 deaths in its 40-year campaign for an independent Basque nation encompassing parts of northern Spain and southwestern France, funded its armed activities through a 'revolutionary tax.'

Liechtenstein 'was one of its favourite places' to 'hide the extortion money,' according to a secret investigation launched by Garzon, El Pais said.

The frozen accounts run into thousands of euros (dollars), it said, adding that they were opened in the names of people linked to a bar in the northern Spanish town of Irun, near the French border.

The bar's owner, Joseba Elosua, was arrested in June 2006, during a vast operation to net suspected ETA financiers.

Liechtenstein is currently in the limelight over a giant international tax evasion scandal.

Australia, Austria, Britain, Canada, France, Germany, Greece, Italy, New Zealand, Spain, Sweden and the United States have launched probes into their citizens' investments in the country following reports that people from these countries had dodged taxes and deposited their money in the principality.

Liechtenstein's LGT bank claims that tax inspectors are working from a list with the names of 1,400 of its clients -- 600 of them German -- that was stolen in 2002.