The prime minister has defended measures to allow house arrest without trial, saying "several hundred" people in the UK are plotting terror attacks. The government is facing opposition from Tory and Lib Dem MPs and its own backbenchers as it prepares for the final Commons debate on the changes. But Tony Blair said there could be no concession on the "basic principle". Mr Blair told the BBC the "control orders" would only be used in the most limited circumstances. Critics in the opposition and civil rights activists are worried that the home secretary will have the power to issue the detention orders. But the government has so far resisted pressure for judges to be responsible for making the orders, instead saying judges will be able to quash them. An explanation is being sent by Home Secretary Charles Clarke to all MPs and peers ahead of the final debate in the House of Commons. On Sunday, Conservative shadow home secretary David Davis claimed judges would get the powers to issue detention orders. And Liberal Democrat leader Charles Kennedy said some concessions had already been offered by the government during last minute negotiations. Some 32 Labour MPs voted against the legislation last week. Barbara Follett, whose first husband was killed while under house arrest in South Africa during the apartheid era, confirmed she would vote against the government. But the government is continuing to insist that "control orders" must be issued by the home secretary. Mr Blair told BBC Radio 4's Woman's Hour: "We are being advised by the police and the security services... "What they say is you have got to give us powers in between mere surveillance of these people there are several hundred of them in this country who we believe are engaged in plotting or trying to commit terrorist acts you have got to give us power in between just surveying them and being able, being sure enough of the proof, to prosecute them beyond reasonable doubt. "And these will be restrictions on their liberty that we will use only in the most limited circumstances." A YouGov poll in the Daily Telegraph suggested 75% of respondents thought action was sometimes necessary against people who had not committed an offence but who had been found by intelligence services to be planning a terrorist attack. But Tory leader Michael Howard told BBC News that the government was again making a mistake in "rushing" anti terrorism legislation. "I very much hope it would be possible to reach a compromise on this." He said after meeting Tony Blair he had been left with the impression that "he really wasn't interested in any of the various proposals we have put forward". Mr Clarke wants house arrest and other powers to replace indefinite jail for terror suspects something the law lords have ruled against on the basis that it breaches human rights. BBC political correspondent Vicky Young said some form of concession on the measures was likely to be needed to get the legislation through the House of Lords, where Labour does not have a majority and would require support from other parties. Shami Chakrabarti, director of civil liberties pressure group Liberty, said who was able to issue the control orders was not the main issue. She said the legislation was "a travesty and a perversion of justice" and would remain "unpalatable" even if a judge was involved early in the process.


David Blunkett who has resigned as home secretary built his reputation as a plain speaking Yorkshire man. I fell in love with someone and they wouldn't go public and things started to go very badly wrong in the summer, and then the News of the World picked up the story. "I tried for three years to make something work." "Trust, plain speaking and straight talking is something which matters so much to me as a politician and as a man that I have decided, of my own volition, to request an independent review of the allegations that I misused my position." "I don't think anyone can say I have said one thing in public and done another in private." "It would be dangerous territory if I wasn't practising what I preach which is to always accept responsibility, always accept the consequences of your actions. "None of us believe countering terrorism is about party politics." "I accepted by necessity we have to have prevention under a new category which is to intervene before the act is committed, rather than do so by due process after the act is committed when it's too late," he said in reference to new anti terrorism measures. "Our work with the French government...has been hugely successful," said Mr Blunkett. "The number of illegal immigrants detected in Dover has dropped dramatically." "Strengthening our identity is one way or reinforcing people's confidence and sense of citizenship and well being." "I foolishly thought as this was a celebrity edition it would be more relaxed than normal." "You wake up and you receive a phone call Shipman's topped himself. You have just got to think for a minute: is it too early to open a bottle?"


The UK pension system has been branded inadequate and too complex by a leading retirement think tank. The Pensions Policy Institute (PPI) said replacing the state pension with a "citizen's pension" would help tackle inequality and complexity. The change would see pensions being calculated on length of residency in the UK rather than National Insurance (NI) contributions. Reform could reduce poverty by aiding people with broken employment records. The PPI added that once the state system was reformed the government should look at options to overhaul private and workplace pensions. The think tank's proposals were made in response to the recent publication of the Pensions Commission's initial report into UK retirement savings. According to the Pensions Commission's report 12 million working people are not saving enough for their retirement. As a result, living standards could fall for the next generation of UK pensioners. The report added that a combination of higher taxes, higher savings and/or a higher average retirement age was needed to solve the UK pension crisis.


The number of people out of work in Europe's largest economy has risen for the tenth straight month as growth remains stubbornly slow. German unemployment rose 7,000 in November to 4.464 million people, or 10.8% of the workforce. The seasonally adjusted rise showed a smaller rise than expected, as government measures to encourage job creation began to take effect. But officials said stagnant growth was still stifling the job market. "There are clear signs of a revival in domestic demand," said Frank Juergen Weise, head of the Federal Labour Agency, in a statement. "But growth of 0.1%... in the third quarter is still insufficient to deliver positive momentum to the labour market." High oil prices and the soaring euro which damages the competitiveness of exporters were also having a negative effect, he said. The brunt of the unemployment is still being felt in the eastern part of Germany, where the rate is 18.8%. With unemployment stuck above 4 million for years, the government of Chancellor Gerhard Schroeder has put job creation at the top of the agenda. A controversial package of measures to shake up incentives to get back to work, paid for by cutting some cherished benefits, has sparked anger among some German workers. Strikes in a number of industries, notably among the country's iconic carmakers, have demonstrated the displeasure as well as fears about further job losses as outsourcing takes hold. Among the new initiatives are the so called "one euro jobs" which top up unemployment benefit. The scheme's formal launch is January, but hirings for these positions are already taking place and affecting the unemployment statistics, economists said. "The deterioration of the labour market does not come as a surprise," said Isabelle Kronawitter at Hypovereinsbank. "Job creation measures probably prevented a stronger increase in the seasonally adjusted numbers."


Lleyton Hewitt suffered a shock defeat to Taylor Dent in the quarter finals of the Australian Hardcourt Championships in Adelaide on Friday. The top seed was a strong favourite for the title but went down 7 6 (7 4) 6 3 to the American. Dent will face Juan Ignacio Chela next after the fourth seed was too strong for Jurgen Melzer. Olivier Rochus beat third seed Nicolas Kiefer 6 7 (4 7) 7 6 (8 6) 7 5 and will take on second seed Joachim Johansson. The Swede reached the last four by beating compatriot Thomas Enqvist 6 3 4 6 6 1. "I felt like I was striking the ball much better," said Johansson. "I felt like I had a lot of break chances, I didn't take care of them all, but I broke him four times and he only broke me once. "I felt that was the key to get up in the set early." Hewitt played down his defeat and insisted he is focused solely on the Australian Open, which starts on 17 January. "When you've been number one in the world for a couple of years and won a couple of slams, you look at the big picture and what motivates you," said Hewitt. "That's the Grand Slams and Melbourne's as big for me as any of the four. Even if I don't win Sydney next week it's no big deal."


The European Commission has officially launched an in depth investigation into whether Italian airline Alitalia is receiving illegal state aid. Commission officials are to look at Rome's provision of a 400m euro ( 495m; 275m) loan to the carrier. Both the Italian government and Alitalia have repeatedly denied that the money part of a vital restructuring plan is state aid. The investigation could take up to 18 months. However, Transport Commissioner Jacques Barrot said he wanted it to be carried out as swiftly as possible. "The Italian authorities have presented a serious industrial plan," said Mr Barot. "We now have to verify certain aspects to confirm that this plan contains no state aid. I would like our analysis to be completed swiftly." The matter of possible state aid was brought to the Commission's attention by eight of Alitalia's rivals, including Germany's Lufthansa, British Airways and Spain's Iberia. While Alitalia needs to restructure to bring itself back to profitability, the rival carriers say it has both violated state aid rules and threatened competition. Alitalia lost 330m euros in 2003 as it struggled to get to grips with high costs, spiralling oil prices, competition from budget carriers and reduced demand. It plans to split into AZ Fly and AZ Services, which will handle air and ground services respectively. Alitalia already enjoyed state aid in 1997. EU rules prevent that from happening again in what is known as the "one time, last time" rule for airlines. Otherwise, EU regulations on state aid stipulate that governments may help companies financially, but only on the same terms as a commercial investor. The airline declined to comment on the Commission decision.


The referee from Saturday's France v Scotland Six Nations match has defended the officials' handling of the game after criticism by Matt Williams. The Scotland coach said his side were robbed of victory by poor decisions made by the officials. But Nigel Williams said: "I'm satisfied the game was handled correctly." Meanwhile, Matt Williams will not be punished by the Scottish Rugby Union for allegedly using bad language in his comments about the officials. He denies having done so. Nonetheless, he was furious about several decisions that he felt denied his side a famous victory. But Nigel Williams told the Scottish Daily Mail: "I spoke to Matt Williams at the post match dinner. "He made no mention of the disallowed try or any other refereeing decisions whatsoever. "If Matt has issues with the match officials, then he is very welcome to phone me and discuss them. "Ultimately there is a match assessor at every international game to give an impartial and objective view of the performance of the officials. "That is the beginning and end of it."


Deutsche Boerse bosses have held "constructive, professional and friendly" talks with the London Stock Exchange (LSE), its chief has said. Werner Seifert met LSE chief executive Clara Furse amid rumours the German group may raise its bid to 1.5bn ( 2.9bn) from its initial 1.3bn offer. However, rival suitor Euronext also upped the ante in the bid battle. Ahead of talks with the LSE on Friday, the pan European bourse said it may be prepared to make its offer in cash. The Paris based exchange, owner of Liffe in London, is reported to be ready to raise 1.4bn to fund a bid. The news came as Deutsche Boerse held its third meeting with the LSE since its bid approach in December which was turned down by the London exchange for undervaluing the business. However, the LSE did agree to leave the door open for talks to find out whether a "significantly improved proposal" would be in the interests of LSE's shareholders and customers. In the meantime, Euronext, which combines the Paris, Amsterdam and Lisbon stock exchanges, also began talks with the LSE. In a statement on Thursday, Euronext said any offer was likely to be solely in cash, but added that: "There can be no assurances at this stage that any offer will be made." A deal with either bidder would create the biggest stock market operator in Europe and the second biggest in the world after the New York Stock Exchange. However, neither side has made a formal offer for the LSE, with sources claiming such a step may still be weeks away. Deutsche Boerse could also face mounting opposition to a bid at home. Among sweeteners reported to have been discussed by Mr Seifert with Ms Furse were plans to move the management of its cash and Eurex derivatives market to London, as well as two members of its executive board. But, Hans Reckers, a board member of Germany's central bank, the Bundesbank, said that cash trading should also remain in Frankfurt, something Deutsche Boerse could move to the UK. "It is not just the headquarters of the Boerse but also important market segments that must stay permanently in Frankfurt. This has special importance for the business activities of the banks and the consultants," he said. Local government officials in Frankfurt's state of Hessen have also spoken out against the move. "It is our wish that the headquarters stay here to maintain Frankfurt's standing as the number one financial centre in continental Europe," Alois Rhiel, its minister for economic affairs added.


Jolanda Ceplak has urged Britain's Kelly Holmes to continue competing at the major championships. Double Olympic gold medallist Holmes has strongly hinted she will not run in this year's Worlds and is undecided about next month's European Indoors. But World Indoor 800m record holder Ceplak said: "There is never an easy race when she is in the field. There is only excitement at what might happen. "It is good for the sport. She always fetches the best out of everyone." Ceplak has been a great rival of Holmes' during the Briton's career and the pair fell out when Holmes questioned the manner of the Slovenian's runaway 800m victory at the 2002 European Championships. But the controversy has since been forgotten, with Ceplak acting as pacemaker for Holmes' failed attempt on the British Indoor 1500m record at the Norwich Union Grand Prix in Birmingham in 2003. Ceplak added: "I like running against her you know the race is always going to be fast. "That is the sort of competition that I like. She is special to me. She was like my idol from the beginning of my career." Meanwhile, Ceplak will be looking to follow up last Saturday's win in Boston with a fast time and victory in Friday's Night of Athletics in Erfurt, Germany. Britain's Jason Gardener had been expected to defend his 60m title in Erfurt but instead he will save himself for a competition in Leipzig on Sunday. Gardener's decision means Scotland's 400m man Ian Mackie will carry British hopes in what looks sure to be a tough preparation for next weekend's Norwich Union European trials in Sheffield.


Ireland's Brian O'Driscoll will lead the Northern Hemisphere team in the IRB Rugby Aid match at Twickenham. O'Driscoll heads a star studded cast for the contest to raise funds for the tsunami appeal. The South will be led by George Gregan, one of four Wallabies, alongside five Springboks and four All Blacks including captain Tana Umaga. South African flanker Schalk Burger has shaken off a leg injury to take his place in the starting line up. He will join fellow Springboks John Smit, Cobus Visagie and Victor Matfield in the South pack, with Jacque Fourie among the centres. The North side have been hit by the withdrawals of Scotland duo Gordon Bulloch and Chris Cusiter, plus France captain Fabien Pelous. But Leicester's England centre Ollie Smith has been added to the squad, giving him an opportunity to impress Lions coach Sir Clive Woodward, who takes charge of the North side. "I think it's fantastic for Ollie," Tigers coach John Wells told BBC Radio Leicester. "He was probably going to have the weekend off this week and I hope Clive gets the chance to see the qualities that Leicester and England have been seeing all year." Woodward will also assess other potential Lions candidates such as Scotland pair Simon Taylor and Chris Paterson, Wales scrum half Dwayne Peel and Ireland lock Paul O'Connell. "I'm looking forward to working with such outstanding players," Woodward said. "Both teams are fielding top quality sides and I really hope that the rugby public and community get behind this game to raise as much money as possible for such a deserving cause." Despite the withdrawal of Wales wing Rhys Williams, who is required for the Blues' Celtic League match with Munster, three other members of their Six Nations squad Ceri Sweeney, John Yapp and Jonathan Thomas will also play. "Not only it is for a good cause but it gives these players the opportunity to play with and against some of the best players in the world," said WRU general manager Steve Lewis. Supporters can watch the teams train for free at Twickenham on Friday, 4 March. Woodward will put his North team through their paces at 1030 GMT, with the South side, coached by former Wallabies coach Rod Macqueen, due at the stadium at 1330. C Paterson (Scotland), B Cohen (England), B O'Driscoll (Ireland, capt), D Traille (France), O Smith (England), C Sweeney (Wales), D Humphreys (Ireland), D Peel (Wales); A Lo Cicero (Italy), P de Villiers (France), J Yapp (Wales), R Ibanez (France), P O'Connell (Ireland), M Bortolami (Italy), J Thomas (Wales), S Taylor (Scotland), L Dallaglio (England), S Parisse (Italy), Others to be added. C Latham (Australia); B Lima (Samoa), J Fourie (SA) T Umaga (New Zealand), S Bobo (Fiji); A Mehrtens (NZ) G Gregan (Aus, capt); C Hoeft (NZ), J Smit (SA), C Visagie (SA), S Maling (NZ), V Matfield (SA), S Burger (SA), P Waugh (Aus), T Kefu (Aus). E Taukafa (Tonga), E Guinazu (Argentina), S Sititi (Samoa), O Palepoi (Samoa), M Rauluni (Fiji), T Delport (SA), A N Other.


Bosses of Deutsche Boerse and the London Stock Exchange are to meet amid talk that a takeover bid for the LSE will be raised to 1.5bn ( 2.9bn). Last month, the German exchange tabled a 530 pence per share offer for LSE, valuing it at 1.3bn. Paris based Euronext, owner of Liffe in London, has also said it is interested in bidding for LSE. Euronext is due to hold talks with LSE this week and it is reported to be ready to raise 1.4bn to fund a bid. Euronext chief Jean Francois Theodore is scheduled to meet his LSE counterpart Clara Furse on Friday. Deutsche Boerse chief Werner Seifert is meeting Ms Furse on Thursday, in the third meeting between the two exchanges since the bid approach in December. The LSE rejected Deutsche Boerse's proposed 1.3bn offer in December, saying it undervalued the business. But it agreed to leave the door open for talks to find out whether a "significantly improved proposal" would be in the interests of LSE's shareholders and customers. In the meantime, Euronext, which combines the Paris, Amsterdam and Lisbon stock exchanges, also began talks with the LSE. In a statement on Thursday, Euronext said any offer was likely to be solely in cash, but added that: "There can be no assurances at this stage that any offer will be made." A deal with either bidder would create the biggest stock market operator in Europe and the second biggest in the world after the New York Stock Exchange. According to the FT, in its latest meeting Deutsche Boerse will adopt a charm offensive to woo the London exchange. The newspaper said the German suitor will offer to manage a combined cash and equities market out of London and let Ms Furse take the helm. Other reports this week said the Deutsche Boerse might even consider selling its Luxembourg based Clearstream unit the clearing house that processes securities transactions. Its ownership of Clearstream was seen as the main stumbling block to a London Frankfurt merger. LSE shareholders feared a Deutsche Boerse takeover would force them to use Clearstream, making it difficult for them to negotiate for lower transaction fees.


Anger at council tax rises spilled over into mass protests in 2003, when the average English bill rose 12.9%. Pensioners' protests spread some marched, others simply refused to pay the increase. Some, such as 83 year old Elizabeth Winkfield, said they would rather go to jail. The Audit Commission found the whole local government finance system was "fundamentally flawed" and all three of the main parties have said the system has to change. Labour says it wants to retain the property based tax but reform it to make it fairer and says there is scope for councils to become more efficient. They say they are already helping pensioners with council tax bills, with a 100 lump sum for the over 70s and last year the government capped some local councils' budgets to keep demands down. Deputy Prime Minister John Prescott has said the current system is not sustainable in the long term and said there would be "radical reform". The party says this year's increases will be the lowest in a decade. A report last year looked at increasing the number of council tax bands and other forms of local taxation, such as reformed business rates, although no decisions have been made. An independent inquiry into its findings, the Lyons review, is due to report back at the end of 2005. The Tories have promised a reduction on bills for pensioners, who they say have been hardest hit by year on year increases in council tax. They say they can save 4bn on "government waste", of which 1.3bn could be used to cut pensioners' bills by an average of 340. It would not be means tested, say the Tories, because that would create more bureaucracy and could discourage people from saving for their retirement. Instead households where council tax payers are over 65 would get a rebate covering half their bill, up to a maximum of 500. The Tories also say they are suspicious about any proposals to revalue homes currently graded according to their value in 1991 because they believe seven million of homes could move up a band. The Liberal Democrats want to do away with the council tax altogether and switch to a local income tax of the kind seen in the USA, Norway and Switzerland. The rate would be set locally, but administered by the Inland Revenue which they say would save at least 300m. They say the council tax is the most unpopular and most unfair tax in Britain, because it puts a "ceiling" on what the richest pay. The party says it would aim for a 5,000 tax free personal allowance, or a 7,000 allowance for the over 65s. After that income would be taxed up to 100,000. The Lib Dems say their plan is fairer, more efficient, has already been tested abroad and offers more accountability.


Microsoft has unveiled the finished version of its home grown search engine. The now formally launched MSN search site takes the training wheels off the test version unveiled in November 2003. The revamped engine indexes more pages than before, can give direct answers to factual questions, and features tools to help people create detailed queries. Microsoft faces challenges establishing itself as a serious search site because of the intense competition for queries. Google still reigns supreme as the site people turn to most often when they go online to answer a query, keep up with news or search for images. But in the last year Google has faced greater competition than ever for users as old rivals, such as Yahoo and Microsoft, and new entrants such as Amazon and Blinkx, try to grab some of the searching audience for themselves. This renewed interest has come about because of the realisation that many of the things people do online begin with a search for information be it for a particular web page, recipe, book, gadget, news story, image or anything else. Microsoft is keen to make its home grown search engine a significant rival to Google. To generate its corpus of data, Microsoft has indexed 5 billion webpages and claims to update its document index every two days more often than rivals. The Microsoft search engine can also answer specific queries directly rather than send people to a page that might contain the answer. For its direct answer feature, Microsoft is calling on its Encarta encyclopaedia to provide answers to questions about definitions, facts, calculations, conversions and solutions to equations. Tony Macklin, director of product at Ask Jeeves, pointed out that its search engine has been answering specific queries this way since April 2003. "The major search providers have moved beyond delivering only algorithmic search, so in many ways Microsoft is following the market," he said. Tools sitting alongside the MSN search engine allow users to refine results to specific websites, countries, regions or languages. Microsoft is also using so called "graphic equalisers" that let people adjust the relevance of terms to get results that are more up to date or more popular. The company said that user feedback from earlier test versions had been used to refine the workings of the finished system. The test, or beta, version of the MSN search engine unveiled in November had a few teething troubles. On its first day many new users keen to try it were greeted with a page that said the site had been overwhelmed.


A US airline attendant suspended over "inappropriate images" on her blog web diary says she has been fired. Ellen Simonetti, known as Queen of the Sky, wrote an anonymous semi fictional account of her life in the sky. She was suspended by Delta in September. In a statement, she said she was initiating legal action against the airline for "wrongful termination". A Delta spokesperson confirmed on Wednesday that Ms Simonetti was no longer an employee. Delta has repeatedly declined to elaborate on what it calls "internal employee matters". A spokesperson reiterated this position on Wednesday, confirming only that Ms Simonetti was no longer with the company. The spokesperson also confirmed that there were "very clear rules" attached to the unauthorised use of Delta branding, including uniforms. Ms Simonetti announced on her blog she had been fired on 1 November. She said in an official statement: "As a result of my suspension and subsequent termination without cause by Delta Airlines I am moving forward with filing a discrimination complaint with the Federal Government EEOC US Equal Employment Opportunity Commission ." She added she had also hired a Texas based law firm to initiate legal action for "wrongful termination, defamation of character and lost future wages." Ms Simonetti told the BBC News website she had received no warning or further explanation when she was suspended on 25 September. Queen of the Sky has received a lot of support and advice from the global blogging community since news of her suspension was brought to light on the BBC News website and others. Her story has highlighted concerns amongst the growing blogging community about conflicts of interest, employment law and free speech on personal websites. The blog, which she started in January as a way of getting over her mother's death, contains a mix of fictional and non fictional accounts. Queen of the Sky developed over the months as a character in her own right, according to Ms Simonetti. In the postings, she made up fictional names for cities and other companies she mentioned to protect anonymity. But some postings contained images of herself in uniform. Of the 10 or so images only one showed Ms Simonetti's flight "wings". She removed them as soon as she was informed of her suspension. "I never meant it as something to harm my company and don't understand how they think it did harm them," Ms Simonetti said. A legal expert in the US speculated that Delta might be concerned that the fictional content on the blog may be linked back to the airline after the images were posted. Delta has been hit recently by pressures of rising fuel costs and fierce competition. It has said it needs to cut between 6,000 and 7,000 jobs and reduce costs by 5bn ( 2.7bn) a year. Analysts had warned recently that the airline might have to seek Chapter 11 bankruptcy prevention. Last week, it struck a 1bn cost cutting deal with its pilots which could save it from bankruptcy. The deal would see pilots accept a 32% pay cut in return for the right to buy 30 million Delta shares, unions said. And on Monday, it negotiated a deal to defer about 135m in debt which was due next year, until 2007. The airline also said it had agreed the terms of a 600m loan from American Express.


Calmer relations between India and Pakistan are paying economic dividends, with new figures showing bilateral trade up threefold in the summer. The value of trade in April July rose to 186.3m ( 97m) from 64.4m in the same period in 2003, the Indian Government said. Nonethless, the figures represent less than 1% of India's overall exports. But business is expected to be boosted further from 2006 when the South Asian Free Trade Area Agreement starts. Both countries eased travel and other restrictions as part of the peace process aimed at ending nearly six decades of hostilities. Sugar, plastics, pharmaceutical products and tea are among the major exports from India to its neighbour, while firms in Pakistani have been selling fabrics, fruit and spices. "If the positive trend continues, two way trade could well cross half a billion dollars this fiscal year," India's federal commerce Minister Kamal Nath said. According to official data, the value of India's overall exports in the current fiscal year is expected to reach more than 60bn, while in Pakistan's case it is set to hit more than 12bn. Meanwhile, the Indian Government said the prospects for the country's booming economy remained "very bright" despite a "temporary aberration" this year. Its mid year economic review forecasts growth of 6 6.5% in 2004, compared with 8.2% in 2003. Higher oil prices, the level of tax collections, and an unfavourable monsoon season affecting the farm sector had hurt the economy in April September, it said.


Tory leader Michael Howard says his party can save 35bn in government spending by tackling waste. The money would be ploughed back into frontline services like the NHS and schools with the rest used to cut government borrowing and reduce taxes. The Tory leader has also shrugged off the defection of one of his MPs, Robert Jackson, a former minister, to Labour. Mr Howard said that these things happened in politics and it would not affect the outcome of the election. "Let's be realistic the election is not going to be decided on the basis of what Mr Jackson did", he told BBC 1's Breakfast with Frost programme. However the defection on Saturday has cast a shadow over the launch of the Conservatives' spending plans. Fuller details are due to be unveiled on Monday. The bulk of the 35bn saved by tackling bureaucracy and inefficient systems will go back into frontline services, Mr Howard said. The 12bn left over would then be spent on reducing government borrowing, he added. However, the remainder would deal with some of the "unfair taxes". "Almost every independent expert says if you get another Labour government you are going to have to pay higher taxes," Mr Howard insisted. "Because borrowing is going up, it is out of control, that is bound to lead to higher taxes or higher interest rates or both. "So part of the 12bn we are going to apply to filling the government's black hole, reducing the borrowing. "The rest will be used to reduce these unfair taxes which are bearing so heavily on the people of our country today." Mr Howard is expected to say that around 6bn will be available for tax cuts when he makes his announcement on Monday. The cuts will be paid for out of the savings identified by business trouble shooter David James. Home Office spending could be cut by 1.6bn, according to the final instalment of his year long review. Savings of 153m at the Foreign Office and 336m at the Department for Culture Media and Sport, have also been identified. In all, almost a quarter of a million jobs and 168 public bodies would go under Mr James' proposals. Mr Howard said: "All this adds up to a bottom line and the bottom line is at this election people will have a clear choice between Mr Blair, who will waste more and tax more, and a Conservative government that will give them value for money and tax less." However, Chief Treasury Secretary Paul Boateng said: "None of the Tories' figures add up so they can't make these savings and can't pay for any tax cuts, which means the only guaranteed cut from the Tories is 35bn of cuts, hitting frontline public services hard." Liberal Democrat leader Charles Kennedy added: "People will not be taken in by Michael Howard's claims of 35bn worth of savings. "This can't be achieved without drastic cuts in local services in their own communities." A poll for the News of the World newspaper suggests the Conservatives are on course for their worst election defeat in a century. Labour will hold key marginal constituencies, winning a majority of 160, the Populus survey suggests. And the Liberal Democrats will take three key seats from the Conservatives, leaving the Tories with just 163 MPs, two less than they returned atLabour's 1997 landslide and their worst showing since 1906.


Second seed Joachim Johansson won his second career title with a 7 5 6 3 win over Taylor Dent at the Australian hardcourt championships in Adelaide. The Swede was made to graft, American Dent surviving three break points in the fifth game of the match. But Johansson got the breakthrough with a sublime backhand return winner and won the second set with more ease. His first tournament win was at Memphis in 2004, helping him leap from 113th in the world rankings to number 11. Afterwards, Dent said he rated US Open semi finalist Johansson as a top contender at the Australian Open, which starts on 17 January. "I believe men's tennis is all about holding serve and if he's playing like that on his own serve I don't see how guys are going to break him," said Dent. Johansson was more restrained in his assessment: "I have to improve my serve if I'm going to go all the way in Melbourne."


Faster broadband in the UK is becoming a reality as more internet providers offer super fast services. Some lucky Britons can already take advantage of UK Online's 8 megabits per second service, which was launched in November 2004. BT Retail has announced that it will trial the same speed service, with a national rollout by year end. Other service providers are expected to follow suit and a glut of new voice and video services will follow. "If the bandwidth is there then ISPs will buy it," said Jill Finger, a research director at analyst firm IDC. Others will be watching BT Retail's trials, which is initially for employees and later in the summer for customers, with interest. For BT Retail, she said, the super fast service could be a way of differentiating it from other players. "It has been losing market share and this could be one way of gaining some of that back," said Ms Finger. Wanadoo is set to trial an 8Mbps service in the summer and also plans to roll out unbundled services which means it takes over the network from BT which will provide speeds of up to 15Mbps. There is no timetable for this at the moment. Cable firms ntl and Telewest are also bound to increase bandwidth at some time in the future and, according to an ntl spokesman, are in a better position than BT in the long term. "BT's network is limited compared to that of cable. With all the other services coming on stream such as video on demand, the question is will 8Mbps be enough?" he asked.


The merger of Russian gas giant Gazprom and oil firm Rosneft is to go ahead, but will not include Yugansk, which was controversially bought last year. The merger, backed by Russian authorities, will allow foreigners to trade in Gazprom shares. Gazprom chief Alexei Miller confirmed Rosneft owned Yugansk was not part of the deal and will instead be spun off. Under the agreement, the state will get a controlling share of Gazprom in exchange for Rosneft. The state wanted to control Gazprom before allowing foreigners to trade. Speaking on NTV television, which is controlled by Gazprom, Mr Miller added that Yugansk, which was swallowed up by Rosneft late last year, will operate as a separate, state owned oil firm headed by current Rosneft chief Sergei Bogdanchikov. According to reports from Russian News Agency Interfax, the deal should go through in the next two to three months. "Obtaining majority control over Gazprom is the beginning of the liberalisation of the market in Gazprom shares," Mr Miller added. By opening up trading in Gazprom to foreigners, the firm will become a top emerging market play for traders. Currently, foreigners can only trade in Gazprom via a small issue of London listed proxy shares. "This is positive news for the international investment community," Global Asset Management investment chief David Smith said. "The majority of investors are going to be happy," he added. However, analysts were disappointed that Yugansk would not be included in the deal. "Yugansk is a heavy cashflow generator and would have been a much better asset for Gazprom," Renaissance Capital energy analyst Adam Landes told Reuters news agency. But he said the latest development was simply an interim step to allow foreigners to trade in Gazprom. "Ultimately and industrially, Gazprom needs Yugansk," he added. Analysts said the deal would give Gazprom control of 8% of Russia's total oil production, an improvement on its current 2.5%, but still far less than the 20% share it would have gained had it also taken over Yugansk. However, the merged group will still remain outside Russia's top five oil producers led by Lukoil with 11% of the market , followed by TNK BP which is half owned by BP, and Surgutneftegaz. Instead, the merged Gazprom Rosneft group will rank alongside Sibneft with 7% of the market. Yugansk was sold to a little known shell company in a disputed auction in December, following what many thought was a politically motivated attack on Yukos. The shell company was then snapped up by Rosneft. Yukos unsuccessfully sought to halt the auction by applying for bankruptcy through the US courts. The unit was auctioned by Russian authorities to help pay off a 27.5bn back tax bill.


Two men who were part of a huge network of internet software pirates, known as Drink Or Die, have been convicted at the Old Bailey. BBC News investigates how the network worked and what motivated those involved. They called themselves Drink Or Die (DOD). They were a network of computer buffs who derived pleasure from cracking codes protecting copyrighted software such as Windows 95. They would then share it with each other. There is no suggestion any of them profited financially. But the authorities in both Britain and the United States considered it software piracy and took a dim view of networks such as DOD, one of a number of so called warez organisations operating on the internet. In October 2000 the US Customs Service began an investigation into DOD and other networks, such as Razor 1911, Risciso, Myth and Popz. Fourteen months later US Customs co ordinated a series of raids across the globe as part of Operation Buccaneer. Seventy search warrants were executed in the US, Britain, Australia, Norway, Sweden and Finland. At least 60 people were arrested worldwide 45 of them in the US. Among the leaders of the network were Americans John Sankus known by his internet nickname Eriflleh (Hellfire spelt backwards) Richard Berry, Kent Kartadinata and Christopher Tresco, who used a server based at the prestigious Massachusetts Institute of Technology (MIT). The longest jail sentence 46 months was handed down to Sankus, a 28 year old from Philadelphia. US Attorney Paul McNulty said at the time: "John Sankus and his techno gang operated in the faceless world of the internet and thought they would never be caught. "They were wrong. These sentences, and those to follow, should send a message to others entertaining similar beliefs of invincibility." But one man still in legal limbo is British born Australian Hew Raymond Griffiths, who is still fighting against extradition to the US. US Customs claimed Mr Griffiths was one of DOD's leaders but his lawyer, Antony Townsden, told the BBC News website it was a laughable suggestion and added: "He was living on welfare and had such an old computer that he couldn't even download software. "The allegation that he was the group's co leader is illusory. He had the least technical skills of anyone, he couldn't crack any codes and he has only been called a leader because he was a loudmouth who wrote a lot on their messageboard." Mr Townsden said if he had committed any crimes he should be prosecuted in Australia, not the US. He claimed the Australian government's decision to accept the extradition request was typical of their current "acquiescent" attitude to the US. Mr Griffiths is expecting to hear this week the outcome of his appeal against the decision to extradite him. Those involved would give themselves internet aliases which would act in the same way as tags used by graffiti artists. They could then brag about their code cracking abilities without giving away their real identities. Alex Bell, whose trial at the Old Bailey ended on Friday, was known as Mr 2940 after a computer device while his co defendant Steven Dowd's nickname, curiously, was Tim. A spokesman for US Immigration, Customs and Enforcement, Dean Boyd, said DOD did not appear to be motivated by money. Their motivation was the kudos which surrounded being able to crack sophisticated software. He told the BBC News website: "Primarily they were just interested in how fast they could crack the code. It was all about underground notoriety." But Mr Boyd pointed out that once the software had been distributed on the internet it fell into the hands of organised criminals who were able to mass produce pirated software at zero cost. "It cost US industries a lot of money, billions of dollars," he said. Mr Boyd said: "It was truly global in scope. We raided a number of universities, including Duke (in North Carolina) and MIT, and found that several of the people involved were employed by major computer corporations. "They would go home from work in the evenings and get involved in this warez culture." Warez groups, which began to surface in the early 1990s, operate according to a strict code of honour. For example if one group cracked the software first its rivals would respect that achievement and not seek to claim it themselves. Mr Boyd said the destruction of DOD was a great coup but he added: "I'm not going to sit here and say we have sorted the problem. There are still hackers and people who do this for fun. "Internet piracy of computer software remains a gigantic problem." A spokesman for the Business Software Alliance said: "DOD members claim they did not profit at all. But they did profit by getting access to very expensive servers." He said DOD and other warez groups were fostering a "culture of piracy" on the internet. He said 29% of computer software in Britain was believed to have been pirated and this cost 1bn in revenue for software companies, their suppliers and distributors. "It may seem like a victimless crime but it touches more people than you might care to believe."


Tony Blair seems certain to end weeks of phoney war on Monday and announce there will be a general election on 5 May. The date has been pencilled into the diaries of politicians and political journalists for many months and, despite occasional panics that the prime minister was on the verge of calling a snap poll, it has not shifted. Over the weeks, there have been any number of signs that 050505 was going to be the day Mr Blair would go for an historic third term. And the calling of a special political cabinet meeting has only added to the belief that the announcement is imminent. The prime minister and his campaign boss Alan Milburn have already insisted the election will be fought on the economy and what they claim is a stark choice between Labour's stability and investment against Tory cuts and boom and bust. And Chancellor Gordon Brown has stepped into the front line of the campaign to the relief of many of his supporters in Westminster to underline that economic message. And it is certain one of the big arguments at the centre of the election battle will be around the big parties' tax and spend policies. During the phoney campaign, Labour got into trouble over its central claim that Michael Howard was planning 35 bn cuts in public services. The prime minister found himself struggling to explain how a smaller, slower increase in spending planned by the Tories compared to Labour's plans was a cut. And it looked like the Labour campaign which was already being criticised for being thrown into defensive mode by Mr Howard on issues such as immigration and health was on the rocks. Then deputy Conservative Chairman Howard Flight was reported to have suggested Mr Howard was secretly planning even bigger "cuts". He was sacked for his gaffe, but the damage had been done and the faltering Labour campaign was back on track. A second central argument will be over taxation, with the Tories claiming the Chancellor has to fill a black hole at the centre of his finances and will be forced to raise taxes if Labour wins again. Mr Brown slaps that aside, claiming his forecasts are accurate and that previous claims of looming economic disaster have proved inaccurate. As usual, the Liberal Democrats will have to fight to get their voice heard over the sounds of battle between the two big parties. But leader Charles Kennedy believes he has set out a distinctive manifesto with plans for a tax rise for the wealthiest to finance extra spending and the abolition of the council tax in favour of a local income tax. Other issues are certain to play a part immigration and asylum, the war on Iraq, law and order and education, for example. But, as ever, it will be the economy that will almost certainly decide the outcome. And, whatever that outcome, 2005 is set to be a far more lively, even bitter campaign than 2001's non event.


Arsene Wenger has stepped up his feud with Sir Alex Ferguson by claiming the Manchester United manager is guilty of bringing football into disrepute. The pair's long running row was put back in the headlines on Saturday when Ferguson said his Arsenal counterpart was "a disgrace". Wenger initially refused to bite back, saying only: "I will never answer any questions any more about this man." But now he claims Ferguson should be punished by the Football Association. The latest twist in the Ferguson Wenger saga came on Saturday when the United boss, in an interview with The Independent newspaper, discussed the events after the game between the two sides in October. United won 2 0 that day, at Old Trafford, but the game was followed by a now notorious food fight which saw Ferguson's clothes covered in soup and pizza. The sides meet again at Highbury on 1 February. "In the tunnel Wenger was criticising my players, calling them cheats, so I told him to leave them alone and behave himself," Ferguson said on Saturday. "He ran at me with hands raised saying 'what do you want to do about it?' "To not apologise for the behaviour of the players to another manager is unthinkable. It's a disgrace, but I don't expect Wenger to ever apologise, he's that type of person." Those allegations were put to Wenger after Saturday's game at Bolton, which Arsenal lost to slip 10 points behind Chelsea in the title race. At first he said only: "I've always been consistent with that story and told you nothing happened. "If he has to talk, he talks. If he wants to make a newspaper article, he makes a newspaper article. "He doesn't interest me and doesn't matter to me at all. I will never answer to any provocation from him any more. "He does what he likes in England anyway. He can go abroad one day and see how it is." But later on Saturday, according to The Independent, Wenger spoke to a smaller group of reporters and expanded on his reaction. "I have no diplomatic relations with him," the Arsenal boss is quoted as saying. "What I don't understand is that he does what he wants and you (the press) are all at his feet. "The situation (concerning the food fight) has been judged and there is a game going on in a month. "The managers have a responsibility to protect the game before the game. But in England you are only punished for what you say after the game. "Now the whole story starts again. I don't go into that game. We play football. I am a football manager and I love football above all ... no matter what people say." Reminded that Ferguson called him "a disgrace", Wenger added: "I don't respond to anything. In England you have a good phrase. It is 'bringing the game into disrepute'. "But that is not only after a game, it is as well before a game." Ferguson had also claimed that United chief executive David Gill and Arsenal vice chairman David Dein had agreed at boardroom level not to discuss the incident in public. But Ferguson added: "In the ensuing weeks all you got was a diatribe from Arsenal about being kicked off the pitch and all that nonsense. Gill phoned Dein three times to complain but nothing was done. "The return is on 1 February and they will come out with another diatribe. "David Gill and I feel we should set the record straight because Arsenal have not written to us to apologise and we would not let that happen here." Meanwhile, the League Managers Association have offered to act as peacemakers in the hope of resolving the on going row. During that stormy game in October, United striker Ruud van Nistelrooy caught Arsenal's Ashley Cole with one particularly strong tackle. Wenger later accused Van Nistelrooy of "cheating" and was fined 15,000 and "severely reprimanded" by the Football Association. Ferguson admitted on Saturday that Van Nistelrooy's tackle, which earned the Dutchman a ban, "could have given (Cole) a serious injury", but he believes Arsenal were the main aggressors. "Wenger is always complaining the match was not played in the right spirit," he added. "They are the worst losers of all time, they don't know how to lose. Maybe it is just Manchester United, they don't lose many games to other teams. "We tend to forget the worst disciplinary record of all time was Arsenal's up until last season. In fairness it has improved and now they are seen as paragons of virtue. "But to Wenger it never happens, it is all some dream or nightmare."


British TV viewers lead the trend of illegally downloading US shows from the net, according to research. New episodes of 24, Desperate Housewives and Six Feet Under, appear on the web hours after they are shown in the US, said a report. Web tracking company Envisional said 18% of downloaders were from within the UK and that downloads of TV programmes had increased by 150% in the last year. About 70% were using file sharing program BitTorrent, the firm said. "It's now as easy to download a pirate TV show as it is to programme a VCR," said Ben Coppin from Envisional. A typical episode of 24 was downloaded by about 100,000 people globally, said the report, and an estimated 20,000 of those were from within the UK. Fans of many popular US TV programmes, like 24, usually have to wait weeks or months until the latest series is shown in the UK. But in some cases, said the report, people were able to watch the new episodes in Britain before US audiences on the west coast of the country. "Missing a television show presents little problem to anyone with a basic knowledge of the internet," explained Mr Coppin. "Two clicks and your favourite programme is downloading. In effect, the internet is now a global video recorder." Exact figures are difficult to pin down, but it is thought that about 80,000 to 100,000 people in the UK download TV programmes. Some may just want the odd episode, others are downloading regularly. Many broadcast analysts agree that the net is radically altering the way people get content, like TV programmes. This presents a challenge to broadcasters who are concerned that channel schedules may become less important to people. It is also of concern to them because advertisements are usually cut out of the downloaded programmes. The industry has coined the term "time shifting" to describe this trend of being able to watch what you want, when you want. The increased popularity of personal digital video recorders, TiVo type boxes which automatically record programmes like Sky , have also contributed to the trend. There are also numerous programs available on the net which automatically search and store TV programmes for viewers, effectively creating a personal video recorder on a computer. Within half an hour, recorded episodes can be uploaded or posted onto file sharing networks or other download sites. Because they tend to be shorter then full length films, they can be processed digitised quickly. More people with high speed broadband connections in the UK also means that episodes can be downloaded quickly. According to Jupiter Research 40% of homes with broadband say it helps them pick and choose the programmes they want to see or that friends have recommended. The Envisional reports said that the TV industry should consider offering a legal way to download shows. The BBC ran a trial of what it calls the Interactive Media Player (iMP) last year, which was based on a peer to peer distribution model. It let people download programmes it held the rights to up to eight days after they had already aired. It is looking to do a more expansive trial later this year. The BBC already allows radio fans to hear programmes they missed online up to a week after broadcast. About six million people in the UK now have a fast, always on net connection via cable or phone lines.


US banking giant Citigroup has sold its Travelers Life Annuity insurance arm to Metlife for 11.5bn ( 6.1bn). The sale is a further move by Citigroup away from its 1990s strategy of offering every financial service insurance, broking and banking. Profit growth in the insurance market has not matched expansion at Citigroup's other businesses. For Metlife, the US's leading insurance company, the purchase gives it access to a much larger distribution network. Robert Benmosche, Metlife's chairman and chief executive, said that it was a "great opportunity for the brand of Metlife to be distributed through Citigroup". Under the agreement, Metlife will be able to sell its products through Citigroup over the next 10 years. The deal includes Smith Barney retail brokerages and Citibank branches. The company will pay between 1bn and 3bn in Metlife stock with the rest being made up of cash. Travelers had sales of 5.2bn in 2004 and made a profit of 901m. It has total net assets of 96bn. "This deal employs some of Metlife's excess capital in a potentially higher return business and gives it more distribution," said Stuart Quint, an analyst at Gartmore.


Leading British computer games maker Peter Molyneux has been made an OBE in the New Year Honours list. The head of Surrey's Lionhead Studios was granted the honour for services to the computer games industry. Mr Molyneux has been behind many of the ground breaking games of the last 15 years such as Populous, Theme Park, Dungeon Keeper and Black and White. He is widely credited with helping to create and popularise the so called god game genre. Speaking to the BBC News website Mr Molyneux said receiving the honour was something of a surprise. It's come completely out of the blue," he said, "I never would have guessed that I'd have that kind of honour." He said he was surprised as much because, not too long ago, many people thought computer gaming was a fad. "It was thought to be like skateboarding," he said, "a craze that everyone thought would go away." Now, he said, the gaming world rivals the movie industry for sales and cultural influence. "Britain plays a big part in it," he said. "It's one of the founding nations that made the industry what it is." Mr Molyneux has been a pivotal figure in the computer games industry for almost 20 years. His career started at Bullfrog Studios which in 1987 produced Populous one of the first God games. The title gave players control over the lives a small population of computerised people. Mr Molyneux said that his involvement with the games industry started almost by accident as back in the early days game making was more a hobby than a career. "I thought everyone would treat Populous as weird," he said, "but it became a huge international success." He left Bullfrog in 1997 to set up Lionhead Studios which was behind the ambitous and widely acclaimed game Black White. One of the next titles to come from Lionhead puts players in charge of a movie studio and tasks them with producing and directing a hit film. The veteran game maker says he has one problem still to solve. "Being an absolute geek I've got no idea what I'm going to wear when I go and pick it up," he said.


A US company has pulled out of a major contract to rebuild Iraq's transport system after attacks on reconstruction efforts, Pentagon officials have said. Contrack International, of Arlington, Virginia, heads a coalition of firms working on a series of schemes. Its withdrawal from the 325m ( 170m) contract in November is thought to be the largest cancellation to date. Contrack said "the original scope of work that was envisioned could not be executed in a cost effective manner". But the firm denied reports it was withdrawing completely from Iraq. "Members of the joint venture including Contrack are committed to the ongoing reconstruction efforts, are actively working in Iraq and continue to look for new construction opportunities in the country," it said in a statement. The Pentagon's Project and Contract Office (PCO) in Baghdad said it had taken over Contrack's management of the subcontractors working on the transportation projects. US firms and their workers have been targets of attacks, and security concerns are said to be a major reason for the slow pace of reconstruction in Iraq. Of the 18.4bn in reconstruction funds approved by Congress, less than 2bn has been spent. Lt Col Eric Schnaible of the PCO told the Associated Press news agency Contrack's withdrawal from the transportation contract was a "mutually agreed to separation" and did not indicate a movement by US companies to leave Iraq. "Some parts of the country are a whole lot more permissive than others," he added. "Where we can get the work done, good things are happening."


When you are gunning for glory and ultimate success keeping the gunpowder dry is essential. Ireland coach Eddie O'Sullivan appears to have done that quite successfully in the run up to this season's Six Nations Championship. He decreed after the 2003 World Cup that players should have a decent conditioning period during the year. That became a reality at the end of last summer with a 10 week period at the start of the this season. It may have annoyed his Scottish, and in particularly Welsh, cousins who huffed and puffed at the disrespect apparently shown to the Celtic League. We will say nothing of Mike Ruddock ''poaching'' eight of the Dragons side that faced Leinster on Sunday. But, like O'Sullivan, he was well within his rights, particularly when you are talking about the national side and pride that goes along with it. The IRFU has thrown their weight behind O'Sullivan, who must be glad that in the main, there is centrally controlled contracts. Bar Keith Gleeson who is just returning from a broken leg, everyone of O'Sullivan's squad is fit, fresh and standing at the oche ready to launch this season's campaign. But I doubt whether O'Sullivan is going to gloat about the handling of his players. He is not that sort of person. However, he may look at the overworked and injury hit England, Wales and France squads whose players have been overworked, and then pat himself on the back for his foresight. But there is still the question of turning up and transferring that freshness into positive results when the referee signals the start of the game. Already Ireland are being earmarked as hot favourites in many quarters to go the whole hog this season. A first Grand Slam since Karl Mullen's led the team to a clean sweep in 1948. With England and France visiting Lansdowne Road for the last time before the old darling is pulled down, everything looks perfectly placed. But in the days of yore that frightened the life out of any Irishman. Under the burden of great expectations, Ireland have crumpled. Take the Triple Crown winning side of 1985 under Mick Doyle. They were expected to up the ante further for a Grand Slam, only the second in Ireland's history. What happened in 1986? Whitewashed. You see, Ireland, in any sport, love to be downsized. Then they can go out and prove a point to the contrary. It is the nature of the beast. But O'Sullivan's side are very capable of proving a salient point this season. After their first Triple Crown for 19 years, they can live up to their success and take a further step up the ladder. O'Sullivan has kept faith and displayed loyalty to his players, and they have repaid him in spades ... and there is more to come. He has some old dogs in his squad, but he will come to this season's championship with a different box of tricks, and a new verve to succeed. Ireland can indeed succeed, but just whisper it.


French stock market regulator AMF has filed complaints against media giant Vivendi Universal, its boss and another top executive. It believes the prospectus for a bond issue was unclear and that executives may have had privileged information. AMF has begun proceedings against Vivendi, its chief executive Jean Rene Fourtou and chief operating officer Jean Bernard Levy. Vivendi advisor Deutsche Bank was also the subject of a complaint filing. Deutsche Bank, which was responsible for selling the convertible bonds to investors, could face penalties if the complaint is upheld. Vivendi has said it believes there is "no legal basis" for the complaints. The watchdog is said to believe the executive pair were party to "privileged information" surrounding the issue of the bonds. Both men bought some of the bonds, the Associated Press news agency reported. AMF is investigating claims that the duo were aware of an interest in Vivendi's US assets from investor Marvin Davis, at the time of the bond sale. Vivendi, however, has said that the information was public knowledge as Mr Davis' offer for the US assets had already been rejected by Vivendi's board. AMF is also looking into whether the executives knew that Vivendi was considering exercising its right to buy British Telecom's shares in Cegetel. Vivendi has rejected the charge, saying the decision to buy the Cegetel shares was "no more than a possibility, of which the public was perfectly aware" at the time of the bond issue. Back in December, Vivendi and its former chief executive Jean Marie Messier were each fined 1m euros ( 1.3m; 690,000) by AMF. The fines came after a 15 month probe into allegations that the media giant misled investors after a costly acquisition programme went wrong.


Five Bank of America subsidiaries have agreed to pay a total of 515m ( 277m) to settle an investigation into fraudulent trading share practices. The US Securities and Exchange Commission announced the settlements, the latest in an industry wide clean up of US mutual funds. The SEC also said it had brought fraud charges against two ex senior executives of Columbia Distributor. Columbia Distributor was part of FleetBoston, bought by BOA last year. Three other ex Columbia executives agreed settlements with the SEC. The SEC has set itself the task of stamping out the mutual funds' use of market timing, a form of quick fire, short term share trading that harms the interests of small investors, with whom mutual funds are particularly popular. In the last two years, it has imposed penalties totalling nearly 2bn on 15 funds. The SEC unveiled two separate settlements, one covering BOA's direct subsidiaries, and another for businesses that were part of FleetBoston at the time. In both cases, it said there had been secret deals to engage in market timing in mutual fund shares. The SEC agreed a deal totalling 375m with Banc of America Capital Management, BACAP Distributors and Banc of America Securities. It was made up of 250m to pay back gains from market timing, and 125m in penalties. It is to be paid to the damaged funds and their shareholders. Separately, the SEC said it had reached a 140m deal equally split between penalties and compensation in its probe into Columbia Management Advisors (CAM) and Columbia Funds Distributor (CFD) and three ex Columbia executives. These businesses became part of BOA when it snapped up rival bank FleetBoston in a 47bn merger last March. The SEC filed civil fraud charges in a Boston Federal court against James Tambone, who it says headed CFD's sales operations, and his alleged second in command Robert Hussey. The SEC is pressing for the highest tier of financial penalties against the pair for "multiple violations", repayment of any personal gains, and an injunction to prevent future breaches, a spokeswoman for the SEC's Boston office told the BBC. There was no immediate comment from the men's' lawyers. The SEC's settlement with CAM and CFD included agreements with three other ex managers, Peter Martin, Erik Gustafson and Joseph Palombo, who paid personal financial penalties of between 50 100,000.


Users are being warned about a Windows virus that poses as the hugely popular Tetris game. The Cellery worm installs a playable version of the classic falling blocks game on PCs that it has infected. While users play the game, the worm spends its time using the machine to search for new victims to infect on nearby networks. The risk of infection by Cellery is thought to be very low as few copies of the worm have been found in the wild. The Cellery worm does not spread via e mail like many other viruses. Instead it browses computer networks for PCs that have not shut off all the insecure ways they connect to other machines. When it infects a machine, Cellery installs a version of Tetris that users can play. As the game starts up the worm also starts a music file to accompany it. At the same time the virus starts scouring networks for other vulnerable machines. The virus does no damage to machines but heavily infected networks could slow down as scanning traffic builds. Productivity may suffer too if users spend time playing Tetris. PCs running Windows 95, 98, ME, NT, 2000, and XP could be vulnerable to the worm. "If your company has a culture of allowing games to be played in the office, your staff may believe this is simply a new game that has been installed rather than something that should cause concern," said Graham Cluley, spokesman for anti virus firm Sophos. So far the number of people infected by Cellery is thought to be very small and the risks of further infection is very low. Sophos urged users and companies to update their anti virus software to keep themselves protected.


Liverpool boss Rafael Benitez was satisfied after his team's 3 1 win over Bayer Leverkusen despite conceding a goal in the last minute. "Before the game if you had said the score will be 3 1 I would have happily accepted that," said Benitez. "But you must realise that you have to concentrate right to the very last seconds of a game at this level. "I have confidence that we can complete the task in Germany. I am always confident and we must be positive." Benitez defended goalkeeper Jerzy Dudek, whose failure to hold on to Dimitar Berbatov's weak drive allowed Franca to score with the last kick of the game and give the German team a lifeline for the second leg. "For me it was not Jerzy Dudek's fault," added Benitez. "He had played a very good game and had we scored our other chances, nobody would be talking about about their goal. It would not have mattered. "If we had scored our other chances it would not have been worth remembering that last goal. "In my opinion Jerzy played well, made two very fine saves and I am happy with him. "If we lose 2 0 we are out but I think we can score in Germany certainly one, and that will make all the difference." And the Liverpool boss is looking forward to having skipper Steven Gerrard, who was suspended for the Anfield leg, back for the return in Germany. "Steven Gerrard is a key player for us," said Benitez. "When he is on the pitch he makes everyone else play better and the opposition pay special attention to him which gives space for others. "Steven is one of the best players in the world, but I need a team that is not about just one player. There must be 11 players on the pitch all doing well."


Tottenham sporting director Frank Arnesen has denied that coach Jacques Santini resigned because of a clash of personalities at White Hart Lane. There had been newspaper speculation that Santini had felt undermined by Arnesen's role at the club. "It is absolutely not true," Arnesen told BBC Radio Five Live. "There is only one thing that made him resign and that is his own personal problems. "He has talked to me recently and said this matter is absolutely for himself." Arnesen said he was unable to throw any light onto the problems that caused Santini to quit after just 13 games in charge. He added: "Jacques has never gone into exactly what it was. But I trust him in that; you have to accept it. I think we should respect it. "The plan is now that over the weekend we will have talks with the board and then on Monday we will clarify the situation." Arnesen countered criticism at the timing of the announcement, coming less than 24 hours before Tottenham's Premiership fixture with Charlton. "When it comes down to personal problems, I don't think we should talk about timing," he said. And he also denied reports that Santini had been given a 3m pay off. "That is absolute nonsense. He is the one who said 'I will go' and so he went'", said the Spurs sporting director. Tottenham's structure of having a sporting director working alongside a coach is based on a continental model and Arnesen sees no reason why they should change it. "I have confidence in this structure. I am confident that we have started something here in July and I still have a lot of confidence in Tottenham and what we are doing," he said. However, former Spurs and England defender Gary Stevens said he would not be surprised if the system had caused a rift. "I think the problems go a lot deeper, between the director of football at White Hart Lane and Santini," Stevens told Five Live. "On paper they could have worked together. But Frank Arnesen was a very creative, forward thinking and expansive player whereas I think Santini was very much the opposite, more a case of being organised, disciplined and happy not conceding goals. "That sort of arrangement can work if the two people have the same principles and ideals and work very closely. But it seems that has not happened."


Arsenal boss Arsene Wenger says he has no plans to sign a new goalkeeper during the January transfer window. Wenger has brought in Manuel Almunia for the last three games for the out of form Jens Lehmann but the Spaniard himself has been prone to mistakes. There have been suggestions that Wenger will swoop for a high quality shot stopper in the New Year. But he told the Evening Standard: "I don't feel it will be necessary to bring in a new goalkeeper in January." The Gunners manager refused to comment on the difficult start that 27 year old Almunia has made to his career at Highbury. And he would not be drawn on whether Lehmann would return for the top of the table clash with Chelsea on Sunday. Almunia was at fault for Rosenborg's goal in Arsenal's 5 1 Champions League win on Tuesday and had some hairy moments in last week's win over Birmingham. But Wenger said earlier this week that his indifferent form was down to pressure caused by being under scrutiny from the media. "The debate has gone on too long. Everyone has an opinion and I do not have to add to it," Wenger added. Arsenal have been linked with Middlesbrough keeper Mark Schwarzer, Fulham's Edwin van der Sar and Parma's Sebastien Frey. And Wenger has no immediate plans to recall former England Under 21 international Stuart Taylor from his loan spell at Leicester.


Wing Christophe Dominici says France can claim another Six Nations Grand Slam despite two lacklustre wins so far against Scotland and England. The champions only just saw off the Scots in Paris, then needed England to self destruct in last week's 18 17 win. "The English played better than us but lost, whereas we are still in the race for the Grand Slam," said Dominici. "We know our display was not perfect, but we can still win the Grand Slam, along with Ireland and Wales." France , Ireland and Wales all remain unbeaten after two rounds of this year's RBS Six Nations, with the two Celtic nations playing by far the more impressive rugby. France take on Wales at the Stade de France on 26 February and Ireland in Dublin on 12 March. But although France have yet to click, Dominici says that they can still win the hard way as long as scrum half Dimitri Yachvili continues in his goalkicking form. "If we have an efficient kicker on whom we can rely on, a solid defence and a team who play for their lives, we can achieve something," Dominici added. "I said at the start of the competition that the winners would be clearer from the third matches, and that's exactly what is going to happen." France coach Bernard Laporte will announce his starting line up next Tuesday for the match against Wales. Wing Jimmy Marlu is definitely out with the knee injury sustained at Twickenham, which is likely to sideline him for the rest of the tournament. Inspirational flanker Serge Betsen is a doubt with a thigh injury, but number eight Imanol Harinordoquy has shaken off his shoulder injury. In the backs, centre Yannick Jauzion and winger Aurelien Rougerie are all back in contention after injury, while Brive back Julien Laharrague has received his first call up as a replacement for Pepito Elhorga.


The UK' opposition Conservatives have unveiled plans to introduce health checks for immigrants if they win the General Election. Here's a guide to the plan: People coming to live and work in Britain from outside the EU. If they plan to stay six months or more and are from a country with lots of TB, they would have to have a chest x ray and further tests if appropriate. All people from outside the European Union who want to stay a year or more will have to undergo a full medical. Tuberculosis, Hepatitis B and HIV. A positive test for TB would automatically mean visa applications being turned down. All other conditions would be dealt with on a case by case basis. People would have to prove they have an acceptable standard of health and are unlikely to be a danger to public health in the UK, or impose significant costs or demands on the NHS. They would also, if appropriate, have to be able to undertake the work or study they applied to come here for. People coming to Britain for less than six months would not be medically tested unless they intended to work in health care, childcare or teaching. Children and pregnant women wanting to live in Britain permanently would not have to have a chest X ray for TB. Under 16s would not face tests for hepatitis and HIV. The Tories say people fleeing persecution will not be denied sanctuary in Britain because of poor health. However, they will undergo health checks to ensure they receive the right medical treatment and do not spread infectious diseases. They claim government figures show that TB in England has increased by 25% over the last 10 years and that nearly two thirds of people with the disease were born overseas. They also believe there should be stricter controls over who comes into Britain to ensure they are not a public health risk. They say the plans will protect access to the NHS. Applicants will be tested in their home country. Only asylum seekers will be tested in the UK once their refugee status is established. Home Office Minister Des Browne says the Government already routinely checks people for TB if they come into the UK for six months or more from high risk countries. Recent medical checks were carried out on 175,000 people at Heathrow Airport and 10,000 at Gatwick. From those tests, about 100 infectious cases of TB were found. The Tories say 47 other countries across the world impose requirements of this kind. The party has looked at the way the system is operated in Australia, Canada and New Zealand. The Tory proposals are "quite closely modelled" on the New Zealand system. Labour claims the policy is little more than a "desperate attempt to catch up with Labour's five year plan" for immigration and asylum, which was published last week. This says health screening for TB will be targeted on applicants from high risk areas before they are given entry clearance. Those who are diagnosed with the disease would then need to seek treatment at home before being allowed to enter the UK. The Liberal Democrats have warned Labour and the Tories they were "in danger of pandering to prejudice rather than challenging it".


Viruses, trojans and other malicious programs sent on to the net to catch you out are undergoing a subtle change. The shift is happening as tech savvy criminals turn to technology to help them con people out of cash, steal valuable data or take over home PCs. Viruses written to make headlines by infecting millions are getting rarer. Instead programs are now crafted for directly criminal ends and firms are tightening up networks with defences to combat the new wave of malicious code. The growing criminal use of malware has meant the end of the neat categorisation of different sorts of viruses and malicious programs. Before now it has been broadly possible to name and categorise viruses by the method they use to spread and how they infect machines. But many of the viruses written by criminals roll lots of technical tricks together into one nasty package. "You cannot put them in to the neat little box that you used to," said Pete Simpson, head of the threat laboratory at security firm Clearswift. Now viruses are just as likely to spread by themselves like worms, or to exploit loopholes in browsers or hide in e mail message attachments. "It's about outright criminality now," said Mr Simpson, explaining why this change has come about. He said many of the criminal programs came from Eastern Europe where cash rich organised gangs can find a ready supply of technical experts that will crank out code to order. Former virus writer Marek Strihavka, aka Benny from the 29A virus writing group, recently quit the malware scene partly because it was being taken over by spyware writers, phishing gangs, and spammers who are more interested in money rather than the technology. No longer do virus writers produce programs to show off their technical prowess to rivals in the underground world of malware authors. Not least, said Paul King, principal security consultant at Cisco, because the defences against such attacks are so common. "In many ways the least likely way to do it is e mail because most of us have got anti virus and firewalls now," he said. Few of the malicious programs written by hi tech thieves are cleverly written, many are much more pragmatic and use tried and tested techniques to infect machines or to trick users into installing a program or handing over important data. "If you think of criminals they do not do clever," said Mr King, "they just do what works." As the tactics used by malicious programs change, said Mr King, so many firms were changing the way they defend themselves. Now many scan machines that connect to the corporate networks to ensure they have not been compromised while off the core network. Many will not let a machine connect and a worker get on with their job before the latest patches and settings have been uploaded. As well as using different tactics, criminals also use technology for reasons that are much more transparent. "The main motivation now is money," said Gary Stowell, spokesman for St Bernard software. Mr Stowell said organised crime gangs were turning to computer crime because the risks of being caught were low and the rates of return were very high. With almost any phishing or spyware attack, criminals are guaranteed to catch some people out and have the contacts to exploit what they recover. So called spyware was proving very popular with criminals because it allowed them to take over machines for their own ends, to steal key data from users or to hijack web browsing sessions to point people at particular sites. In some cases spyware was being written that searched for rival malicious programs on PCs it infects and then trying to erase them so it has sole ownership of that machine.


Manchester United manager Sir Alex Ferguson said he has no regrets after his second string side lost 3 0 away at Fenerbahce in the Champions League. Ferguson said: "The good thing about being manager is that you are in control of which team to pick. "I care about United, that's important, so while I am disappointed at the result I am not at the team I selected. "This game was important for the young lads. They will remember it and next time they come they will be better." Ferguson admitted his side were well beaten by the Turks, a result which meant they finished second in Group D behind Lyon. He added: "They'll know not to play like that again. We showed a lack of strength. But I have no complaints about the scoreline. "In the second half we had some good moments in attack. And in that situation, you have to take one chance. "But we didn't do that, so the game just petered out for us. "I didn't think it made much difference whether we won the group or finished second and I still don't. "We could get Inter, AC Milan and Juventus but Bayern, Barcelona and Real Madrid were among the runners up. All we can do is let fate decide how it works out."