Cayman Islands ordered to reduce deficit by 2013

Britain is urging the Cayman Islands to find new revenue sources and diversify its struggling economy after ruling out direct taxation.

The British territory's government also needs to reduce public spending and create a three-year plan to cut the deficit by 2013 to present "a more positive image as a financial center," Colin Roberts, overseas territories director at the British Foreign and Commonwealth Office, said in a statement released Friday.

He said Britain would be open to talking about borrowing requirements once it was satisfied with a plan to balance the budget. A draft of the plan is due by …