SINGAPORE today took the biggest step yet towards liberalising its legal services market by approving seven joint ventures between local and foreign law firms.

The move, intended to strengthen Singapore as a regional financial centre, breaks down curbs on the activities of selected foreign and local law firms.

It is expected these will create a top tier of law firms in Singapore able to dominate international legal work, especially in banking, corporate finance and litigation.

Approval for the "joint law ventures" was given to five UK-based firms and two from the US.

They are: Linklaters & Alliance with Allan & Gledhill; Freshfields with Drew & Napier; Lovells with Lee & Lee; Allen & Overy with Shook Lin & Bok; Clifford Chance with the Wong Partnership; White & Case with Colin Ng and Partners; and Orrick, Harrington & Sutcliffe with Helen Yeo & Partners.

The predominance of London-based firms in the list reflects the longer involvement of British firms in Singapore.

The two US firms to win licences, White & Case of New York and Orricks of San Francisco, lead American firms expanding into the region.

Singapore first opened up to foreign law firms in 1992 when it allowed them to set up offices in the country.

They were prevented from practising Singaporean law. The new joint ventures will enable the UK and US-based firms to practise Singaporean law and the local firms to offer advice on US and UK law.

The move reflects the regional rivalry between Singapore and Hong Kong.

Although the Singapore legal market is seen as less important than Hong Kong, handling fewer large deals, it is thought the gap could close.

Singapore firms are generally less profitable than the large UK and US firms, but the country's regional significance means they have attracted firms seeking to establish themselves as truly global.

"Singapore is becoming more and more important as a regional hub and clients are telling us they need an effective combination of Singapore and international legal services to reflect this," said Keith Clark, chairman of Clifford Chance.

Although the Singapore government has not ruled out approving further joint ventures, this round is seen as crucial since it involves almost all Singapore's main law firms.