Swiss lawmakers have rejected a government-backed banking bill meant to end a high-profile legal standoff with the United States over suspected American tax cheats.

Switzerland's lower house on Tuesday voted down the measure that Finance Minister Eveline Widmer-Schlumpf had presented as a way for Swiss banks to disclose client information to U.S. authorities without breaking Switzerland's strict client secrecy laws.

The bill, which was rejected in a vote of 126-67 with two abstentions, had passed Switzerland's upper house in the capital Bern last week.