Talks between Swiss banks and Jewish groups over unclaimed Holocaust-era assets are near a breakdown after an analysis of a Swiss offer showed the banks would pay less than $550 million, a source close to the talks said Friday.

The source, who asked not to be identified, said there was a strong chance that a scheduled June 23 meeting between the two sides in Washington would not take place and that state and local finance officers across the United States would renew their boycotts against Swiss financial institutions.That was because an original offer of more than $1 billion made by the big three Swiss banks earlier this month turned out to include hundreds of millions of dollars in funds that Holocaust survivors would receive regardless of whether a settlement was reached.

The source said that was money being found by a special committee headed by former Federal Reserve Board Chairman Paul Volcker. The committee is doing an audit of unclaimed accounts in all Swiss banks.

That audit was expected to produce more than $700 million in unclaimed assets, including interest payments, that would be returned to survivors, their heirs and Holocaust charitable groups regardless of the negotiations.

Jewish leaders and lawyers for Holocaust survivors boycotted the latest round of the secretive talks with Swiss banks, Swiss newspaper Neue Zuercher Zeitung said early Friday.

The three big Swiss banks involved in the U.S.-brokered talks declined to comment on the newspaper report except to say that the negotiations were continuing.

The banks and the Jewish groups are negotiating compensation for accounts whose records were destroyed after World War II and for gold and other assets looted from Jews that were sold to the Swiss banks by the Nazis during the war.