Swiss bank UBS , under pressure from an international campaign against tax evasion, wants to drop accounts for undeclared cash from Europe Union clients, Sonntagszeitung newspaper reported on Sunday.

Scaling back on the controversial accounts would be the most radical step so far by the bank in moves to curb its offshore business.

UBS, the world's largest wealth manager in terms of assets, is already exiting the offshore business for U.S. clients.

The paper, citing a high-ranked UBS manager, said the bank would separate out untaxed assets and try to get rid of them.

UBS exits the lucrative business of undeclared money, ran the headline on the paper's story.

UBS spokeswoman Sabine Jaenecke declined to comment on the report. We are assessing our crossborder business, but that is not new, she said. Everything else is speculation, which we don't comment on.

The offshore business with EU clients is much bigger than with U.S. clients, although the bank does not disclose details on offshore accounts.

Sonntagszeitung said UBS clients from Germany, France, Britain and other EU countries would be moved to special units. They would no longer receive visits nor advice via telephone or email. Only a minimal service in Switzerland would be kept.

Swiss banks, especially UBS, have come under pressure as countries like the United States and Germany step up the fight against tax evasion.

Switzerland has recently relaxed its banking secrecy and agreed to cooperate more in cases of tax evasion.

UBS, which is struggling to recover from record losses and billions in writedowns due to the financial crisis, agreed in February to reveal details of some U.S. clients and said it would pay a $780 million fine to settle a U.S. tax fraud investigation alleging it helped clients dodge taxes.

U.S. authorities are suing UBS to try to obtain details of 52,000 undeclared accounts holding billions of dollars that they allege are held by the bank for U.S. clients.

Last week, UBS said it saw outflows of 23 billion Swiss francs ($19.91 billion) in its wealth management and Swiss banking business in the first quarter, mainly after the hand-over of the client data.

(Reporting by Sven Egenter; Additional reporting by Lisa Jucca: Editing by David Cowell)

($1=1.155 Swiss Franc)