Panama's President Juan Carlos Varela reaffirmed his country's commitment to tax transparency in the wake of the Mossack Fonseca leaks. This comes as governments across the world are investigating possible financial misdeeds by the rich and powerful, following a historic data hack concerning a local law firm which specialises in offshore set-ups.

The Panama Papers, which ring four decades of activity by Mossack Fonseca, reveal the offshore arrangements of politicians and public figures including Russian President Vladimir Putin's inner circle, relatives of the prime ministers of Britain, Iceland and Pakistan, and the president of Ukraine.

While holding money in offshore companies is not illegal, journalists who received the leaked documents said they could provide evidence of hidden wealth. Speaking in the city of Colón, Varela told media that the leak has strengthened his government's resolve to expand transparency in Panama's financial system.

"We are allies with all countries in the fight for transparency in the country's financial system. And not just in this country, but every country in the world. We welcome any publication or any investigation which protects the Panamanian and global financial systems so that it cannot be used at any time for any illicit act. On the contrary, these types of challenges strengthen us as a country as it reaffirms our commitment as president, as a government, to keep fighting for transparency in the Panamanian financial system," Varela said.

The law firm, Mossack Fonseca, which says it has set up more than 240,000 offshore companies for clients around the globe, denied any wrongdoing and called itself the victim of a campaign against privacy. In a statement posted on its website on 4 April, the law firm said media reports had "misrepresented the nature of our work."

The Paris-based Organisation for Economic Co-operation and Development (OECD), which has pushed for more transparency on taxes, has previously said Panama "must put its house in order." OECD said that, prior to the leaks, it had warned G20 finance ministers that Panama was backtracking on a commitment to share information on accounts with other governments.