Citizens in a majority of nations surveyed in a BBC World Service poll believe the world economy is worsening. Most respondents also said their national economy was getting worse. But when asked about their own family's financial outlook, a majority in 14 countries said they were positive about the future. Almost 23,000 people in 22 countries were questioned for the poll, which was mostly conducted before the Asian tsunami disaster. The poll found that a majority or plurality of people in 13 countries believed the economy was going downhill, compared with respondents in nine countries who believed it was improving. Those surveyed in three countries were split. In percentage terms, an average of 44% of respondents in each country said the world economy was getting worse, compared to 34% who said it was improving. Similarly, 48% were pessimistic about their national economy, while 41% were optimistic. And 47% saw their family's economic conditions improving, as against 36% who said they were getting worse. The poll of 22,953 people was conducted by the international polling firm GlobeScan, together with the Program on International Policy Attitudes (Pipa) at the University of Maryland. "While the world economy has picked up from difficult times just a few years ago, people seem to not have fully absorbed this development, though they are personally experiencing its effects," said Pipa director Steven Kull. "People around the world are saying: 'I'm OK, but the world isn't'." There may be a perception that war, terrorism and religious and political divisions are making the world a worse place, even though that has not so far been reflected in global economic performance, says the BBC's Elizabeth Blunt. The countries where people were most optimistic, both for the world and for their own families, were two fast growing developing economies, China and India, followed by Indonesia. China has seen two decades of blistering economic growth, which has led to wealth creation on a huge scale, says the BBC's Louisa Lim in Beijing. But the results also may reflect the untrammelled confidence of people who are subject to endless government propaganda about their country's rosy economic future, our correspondent says. South Korea was the most pessimistic, while respondents in Italy and Mexico were also quite gloomy. The BBC's David Willey in Rome says one reason for that result is the changeover from the lira to the euro in 2001, which is widely viewed as the biggest reason why their wages and salaries are worth less than they used to be. The Philippines was among the most upbeat countries on prospects for respondents' families, but one of the most pessimistic about the world economy. Pipa conducted the poll from 15 November 2004 to 3 January 2005 across 22 countries in face to face or telephone interviews. The interviews took place between 15 November 2004 and 5 January 2005. The margin of error is between 2.5 and 4 points, depending on the country. In eight of the countries, the sample was limited to major metropolitan areas.


British energy firm Burren Energy has been awarded two potentially lucrative oil exploration contracts in Egypt. The company successfully bid for the two contracts, granted by government owned oil firms, covering onshore and offshore areas in the Gulf of Suez. Burren Energy already has a presence in Egypt, having been awarded an exploration contract last year. The firm, which floated in 2003, recently announced a deal to buy 26% of Indian firm Hindustan Oil Exploration. The 13.8m deal gives Burren Energy access to the Indian oil and gas industry. This latest contract expands Burren Energy's global exploration and production portfolio it also holds contracts in Turkmenistan and the Republic of Congo. "These assets significantly increase our exploration portfolio in Egypt and we continue to investigate further opportunities in this region," said chief executive Finian O'Sullivan.


Newry City are expected to discuss legal avenues on Friday regarding overturning their ejection from the Nationwide Irish Cup. The IFA upheld its original decision to throw Newry out of the cup following the Andy Crawford registration row. ''A law firm will put a case forward for Newry FC, and see what the legal implications of all this is are,'' said Newry boss Roy McCreadie. ''This is a big issue, now that we have an appeal pending,'' On Wednesday, a fresh IFA hearing into Crawford registration saga, ruled that last week's original verdict had been correct. It meant that Bangor, beaten 5 1 by Newry on the field, will take on Portadown in the sixth round. Newry had claimed they had uncovered "fresh evidence", in respect of the dates relating to the registration. But McCreadie is not further annoyed that full details of Wednesday's meeting was not relayed to the club. ''Even to this day, we have as much information about what happened during the meeting on Wednesday as that told to the media. We are being kept in the dark,'' McCreadie told the News Letter . ''We want an explanation. There is no good sending us the same fax message the press people received. ''It's a real sad case. If we are not back in the Irish Cup after our appeal, and guided by our legal advise, we will seek to lodge an injunction in the courts to stop Bangor playing Portadown.''


Tony Blair has hailed a deal bringing Turkey a step closer to EU membership as important for the world's future "peace and prosperity". Mr Blair has been a leading advocate of Turkish membership despite controversy surrounding the idea. Leaving a Brussels summit Mr Blair said "the fact Turkey is a Muslim country does not mean it should be barred". The deal to open formal talks with Ankara came despite an EU demand for Turkey to recognise Cyprus. It was agreed the issue can be tackled at a later date but Turkish premier Recep Erdogan had to accept negotiations did not guarantee his country full EU membership. If it joins, Turkey may have to accept restrictions to limit migration by its citizens. Mr Blair said having Turkey in the EU was of "importance to the future peace and prosperity of my country, Britain, and the wider world". "We are stating a fundamental principle that the fact Turkey is a Muslim country does not mean it should be barred from Europe. "On the contrary, if it fulfils the same principles of human rights, then Muslim and Christian can work together." Under the agreement, Turkey must issue a written statement promising to sign an accord effectively recognising the Greek Cypriot government, but gives Turkey more time to sell the idea to its people. The internationally recognised southern part of Cyprus is an EU member, but Turkey, which occupies northern Cyprus, had previously insisted it would not bow to demands to recognise the country, calling the issue a "red line". It could take up to 15 years before Turkey is able to join, and entry cannot be guaranteed. The EU has also announced that it will start accession talks with Croatia in April 2005. However, talks will begin only if the country co operates fully with the UN war crimes tribunal for the former Yugoslavia.


An injury time dropped goal by Ronan O'Gara stole victory for Ireland from underneath the noses of Argentina at Lansdowne Road on Saturday. O'Gara kicked all of Ireland's points, with two dropped goals and five penalties, to give the home side a 100% record in their autumn internationals. An impressive Argentina appeared in control until the dying seconds. The Pumas shocked the Irish early on with a try from Federico Aramburu, and Felipe Contepomi kicked 14 points. The well drilled and sharper Pumas out played and out thought Ireland in the early stages. Indiscipline allowed Argentina's Leinster fly half Contepomi to open the scoring in the third minute with a straightforward penalty. He was on the mark again two minutes later when Argentina shocked a ragged Ireland with the first try of the game. Ireland turned the ball over and Manuel Contepomi broke through an unstructured defence before feeding his midfield partner Aramburu to sprint in under the posts. O'Gara finally got Ireland on the board with a dropped goal in the ninth minute only for Contepomi to rifle over his second penalty two minutes later. Playing into a strong wind and rain, Ireland continued to come second best in tight situations, and turnovers began to mount up against a rugged defence. O'Gara managed to land his second penalty in the 36th minute, but once again Contepomi replied in kind four minutes into first half injury time. The second half started as the first had ended. O'Gara rifled over another penalty in the 45th minute, but Contepomi matched it three minutes later. The upper body strength of the Pumas never allowed Ireland to take control up front, while the three quarters had no space to manoeuvre. Ireland had to rely on O'Gara's boot to keep in touch rather than any contrived running plays. The Munsterman landed two more penalties one of them from 48 metres to bring his team to within four points with 13 minutes on the clock remaining. And Ireland's chance came when Argentina's number eight Gonzalo Longo was yellow carded with six minutes to go for an offence in the line out. O'Gara made no mistake as he rifled over his fifth penalty to set up a tense final few minutes. But Ireland showed great composure to get themselves into a position to allow O'Gara to thump over a massive drop goal to complete a tremendous, if fortuitous, comeback.


A group of MPs are on a two day fact finding mission to Scotland to gather evidence for a report into the UK's fishing industry. Members of Westminster's environment, food and rural affairs committee will be touring fish markets and talking to fish processors. They will also talk to Fisheries Minister Ross Finnie and scientists. MPs are deciding whether to recommend a new system of "community quotas" to conserve fish stocks. The aim is that fishing ports like Peterhead or Fraserburgh would be allocated a quota and local people would decide how to fish it. The scheme is a variation on the local management committees already being established by the European Union. Details are contained in a Royal Commission report for the UK Government, along with the more controversial idea of closing some mixed fishing grounds completely. Six members of the committee will be in Scotland to seek views from fishermen and processors in Aberdeen and Peterhead. They will also speak to Mr Finnie, representatives of the Royal Society and the Sea Fish Industry Authority. Committee chairman Austin Mitchell said some way has to be found of harvesting mixed fisheries without wasting stocks.


UK Foreign Secretary Jack Straw has defended plans to end the European Union's arms embargo on China, despite opposition from the US and Japan. Mr Straw, visiting Beijing, noted arms embargoes applied to China, Burma and Zimbabwe but not to North Korea, which he said had a terrible rights record. The EU imposed its arms ban on China in 1989 after troops opened fire on protestors in Tiananmen Square. Mr Straw also signed a deal on China UK tourism. It is expected this would increase the number of Chinese tourists by 40,000 per year, providing 120m in revenue. China has in the past said it sees the weapons ban as politically driven, and does not want it lifted in order to buy more weapons. Mr Straw, speaking at a joint news conference with Chinese Foreign Minister Li Zhaoxing, stressed this point. "The result of any decision to lift the arms embargo should not be an increase in arms exports from European Union member states to China, either in quantitative or qualitative terms," Mr Straw said. Earlier this week he said he expected the embargo to be lifted within six months. But Mr Straw faces tough opposition to the move. Tory foreign affairs spokesman Michael Ancram said lifting the arms embargo would be "irresponsible" and would damage Britain's relations with the US. He said Mr Straw was "naive beyond belief" if he accepted China's claim it does not want the ban lifted in order to buy weapons. The French want the embargo lifted because they want to sell arms to China; the Chinese want it lifted because they want to buy arms and battlefield technology from Europe." When he was in Tokyo earlier this week, Japanese Foreign Minister Nobutaka Machimura told the British minister that his plan to remove the embargo was " a worrying issue that concerns the security and environment of not only Japan, but also East Asia overall". Washington argues that if the embargo is lifted, it could lead to a buying spree for arms that China could use to threaten its diplomatic rival Taiwan. Beijing says Taiwan is part of Chinese territory and wants to unite it with the mainland, by force if necessary. The US is bound by law to help Taiwan defend itself. Washington has also voiced concern that the human rights conditions in China have not improved enough to merit an end to the embargo. It is an issue raised by human rights groups too. Brad Adams, from the UK's Human Rights Watch, said: "This is a huge political signal from Europe that they are willing to forget about Tiananmen Square." But Mr Straw insisted the EU's code of conduct on arms exports meant tough criteria on human rights still had to be met if the embargo was lifted.


A US airline attendant is fighting for her job after she was suspended over postings on her blog, or online diary. Queen of the Sky, otherwise known as Ellen Simonetti, evolved into an anonymous semi fictional account of life in the sky. But after she posted pictures of herself in uniform, Delta Airlines suspended her indefinitely without pay. Ms Simonetti was told her suspension was a result of "inappropriate" images. Delta Airlines declined to comment. "I was really shocked, I had no warning," Ms Simonetti told BBC News Online. "I never thought I would get in trouble because of the blog. I thought if they had a problem, someone would have said something before taking action." The issue has highlighted concerns amongst the growing blogging community about conflicts of interest, employment law and free speech on personal websites. Ms Simonetti was suspended on 25 September pending an investigation and has since lodged a complaint with the US Equal Employment Opportunity Commission (EEOC). A spokesperson for Delta Airlines told BBC News Online: "All I can tell you is we do not discuss internal employee issues with the media." She added she could not say whether a similar situation over personal websites had occurred in the past. Ms Simonetti started her personal blog in January to help her get over her mother's death. She had ensured she made no mention of which airline she worked for, and created fictional names for cities and companies. The airline's name was changed to Anonymous Airline and the city in which she was based was called Quirksville. A large part of the blog contained fictional stories because Queen of the Sky developed over the months as a character in her own right, according to Ms Simonetti. The images were taken from a digital camera she had inherited from her mother. "We often take pictures on flight or on layovers. I just though why not include them on my blog for fun. "I never meant it as something to harm my company and don't understand how they think it did harm them," Ms Simonetti said. She has also claimed that pictures of male Delta Airline employees in uniform are freely available on the web. Of the 10 or so images on the site, only one showed Ms Simonetti's flight "wings". "They did not tell me which pictures they had a problem with. I am just assuming it was the one of me posing on seats where my skirt rode up," she said. The images were removed as soon as she learned she had been suspended. As far as Ms Simonetti knows, there is no company anti blogging policy. There is guidance which suggests the company uniform cannot be used without approval from management, but use in personal pictures on websites is unclear. Jeffrey Matsuura, director of the law and technology programme at the University of Dayton, said personal websites can be hazardous for both employers and their employees. "There are many examples of employees who have presented some kind of material online that have gotten them in trouble with employers," he said. It was crucial that any policy about what was and what was not acceptable was expressed clearly, was reasonable, and enforced fairly in company policy. "You have to remember that as an employee, you don't have total free speech anymore," he said. Mr Matsuura added that some companies actively encouraged employees to blog. "One of the areas where it does become a problem is that they encourage this when it suits them, but they may not be particularly clear when they employees do cross the line." He speculated that Delta might be concerned that the fictional content on the blog may be linked back to the airline after the images of Ms Simonetti in uniform were posted. "Whether or not that is successful will depend on what exactly is prohibited, and whether you can reasonably say this content now crosses that line," he said. Ms Simonetti said her suspension has caused two of her friends to discontinue their blogs. One of them was asked to stop blogging by his company before any action was taken. "If they had asked me just take down the blog, I would have done it, but that was not been given to me as an option," she said. "This blogging thing is obviously a new problem for employers and they need to get a policy about it. If I had known it would cost me my job, I would not have done that."


The Conservatives have been "a lot smarter" in the way they have conducted the general election campaign, a Labour backbencher has said. Derek Wyatt said having a five month campaign "turned off voters" and suggested people were already "rather bored of the thing". He wants a greater campaigning role for Chancellor Gordon Brown. Labour said the economy was at the heart of the campaign and Mr Brown therefore had a prominent role. But Mr Wyatt argued: "By some way, he is currently the figure in all of the polls that people trust and see that has delivered over eight years an economy unmatched anywhere in the world. "So, it would be a tad foolish of the Labour Party if we did not use him as we have done over the past three elections." Labour's election chief Alan Milburn denied there was an attempt to sideline Mr Brown after facing criticism for letting the Tories set the agenda. However, Mr Wyatt predicted the campaign would get under way properly once the chancellor delivered his budget. The MP for Sittingbourne and Sheppey said Prime Minister Tony Blair had been "trying very hard" to improve his own standing with the electorate through a "sort of campaign of trust". But Mr Blair had been "hurt" by the Iraq controversy, he added. A Labour party spokesman played down differences with Mr Wyatt and said Mr Brown already had a prominent campaign role. "This election is a choice between Labour taking Britain forward and the Conservatives taking us back."


Legendary Dutch coach Rinus Michels, the man credited with developing "total football", has died aged 77. Referred to in the Netherlands as "the General", Michels led the Dutch at the 1974 World Cup when they reached the final only to lose 2 1 to Germany. However, he guided his side to the 1988 European Championship title with a 2 0 win over the Soviet Union in the final. Michels played for Ajax and coached the side to four national titles between 1965 71 and a European Cup in 1971. His 1970s Dutch team was built around Johan Cruyff and Johan Neeskens and introduced the concept of 'total football' to the world. The strategy was to foster team coherence and individual imagination with all players possessing the skills to play in any part of the pitch. Cruyff was the on field organiser of a team whose players rotated in and out of defence at will and was encouraged to play creative attacking football. Michels had recently undergone heart surgery and Dutch football federation (KNVB) spokesman Frank Huizinga said: "He was one of the best coaches we had in history." The no nonsense coach also enjoyed spells at Barcelona, who he took to a Spanish title in 1974, FC Cologne and Bayer Leverkusen. Michels, named coach of the century by world football's governing body Fifa in 1999, also won five caps for the Netherlands as a bruising centre forward. Dutch sports minister Clemence Ross van Dorp said: "He was the man who, together with Cruyff, made Dutch football big."


Shares in music giant EMI have sunk by more than 16% after the firm issued a profit warning following disappointing sales and delays to two album releases. EMI said music sales for the year to March will fall 8 9% from the year before, with profits set to be 15% lower than analysts had expected. It blamed poor sales since Christmas and delays to the releases of new albums by Coldplay and Gorillaz. By 1200 GMT on Monday, EMI shares were down 16.2% at 235.75 pence. EMI said two major albums scheduled for release before the end of the financial year in March one by Coldplay and one by Gorillaz have now had their release dates put back. "EMI Music's sales, particularly re orders, in January have also been lower than anticipated and this is expected to continue through February and March," the company added. "Therefore, for the full year, at constant currency, EMI Music's sales are now expected to be 8% to 9% lower than the prior year." The company said it expected profits to be about 138m ( 259.8m). Alain Levy, chairman and chief executive of EMI Music, described the performance as "disappointing", but added that he remained optimistic over future trends in the industry. "The physical music market is showing signs of stabilisation in many parts of the world and digital music, in all its forms, continues to develop at a rapid pace," he said. Commenting on the delay to the release of the Coldplay and Gorillaz albums, Mr Levy said that "creating and marketing music is not an exact science and cannot always coincide with our reporting periods". "While this rescheduling and recent softness is disappointing, it does not change my views of the improving health of the global recorded music industry," he added. Paul Richards, an analyst at Numis Securities, said the market would be focusing on the slump in music sales rather than the timing of the two albums. "It's unusual to see this much of a downgrade just because of phasing," he said.


India's biggest oil exploration firm, Oil Natural Gas Corp (ONGC), says it is in talks to buy the former assets of troubled Russian crude producer Yukos. "We are in touch with the concerned Russian entities about the Yukos assets and other opportunities in Russia," said ONGC chairman Subir Raha. Local press had reported that ONGC was looking to buy 15% of Yukos' former key oil production unit for 2bn ( 1bn). Yukos is being broken up by Russian authorities to pay a massive tax bill. It was forced to sell its key production unit Yuganskneftegas (Yugansk) last month after being hit with a bill of 27bn in unpaid taxes and fines. State owned Rosneft now owns Yugansk and Russia has said it will turn the oil producer into a stand alone firm. Indian oil minister Mani Shankar Aiyar discussed ONGC's plans during a trip to Moscow last year, and the topic came up again during Russian president Vladimir Putin's recent visit to New Delhi. "It would make great sense for us to build on that," said Mr Aiyar. India's oil production has stagnated over recent years, and it is having to look abroad to secure future supplies. India imports about 70% of its total oil consumption. At the same time, India's economy is booming and the country's thirst for oil is so strong that it has helped pushed up the price of crude worldwide. India produces about 793,000 barrels of oil per day (bpd), little changed since the start of the 1990s, according to oil industry analysts Douglas Westwood. Consumption, meanwhile, has jumped to 2.4 million bpd, compared with 474,000 bpd in 1973. "For countries to develop, they have to have access to energy," said John Westwood, managing director of oil industry analysts Douglas Westwood. India is a "dramatically growing economy that must have access to oil". By buying into Yugansk, ONGC would be able to reduce its dependence on Gulf states for oil imports, Mr Westwood explained, especially as the chances of finding and exploiting resources within India are slim. "We forecast that Indian production will go into significant decline," Mr Westwood said. "By 2020, production may only be at half of today's levels." ONGC, which is majority owned by the Indian state, already has bought petroleum assets in countries including Vietnam, Sudan and Russia. The company is a partner with Rosneft in the Sakhalin 1 oil field off Russia's Siberian coast. ONGC is, however, not the only firm interested in Yugansk. Chinese crude company China National Petroleum has also been mentioned as a possible investor, while on Thursday, Italy refused to rule out an interest. ONGC's interest is the latest twist in a saga that has seen one of the world's biggest oil producers brought to its knees. The dispute is partly driven by President Putin's clampdown on the political ambitions of ex Yukos boss Mikhail Khodorkovsky, who is currently in jail on charges of fraud and tax evasion. Yukos has been battling the Russian authorities for more than a year and has filed for bankruptcy protection in the US. Analysts have questioned how long it can continue to survive without Yugansk. On Thursday, a US court said it will hear arguments for Yukos' bankruptcy claim to be thrown out on 16 February. Should that happen, Yukos will have little chance of clawing back its assets, analysts said.


The UK Independence Party outspent both Labour and the Liberal Democrats in the European elections, new figures show. UKIP, which campaigned on a slogan of "Say no to Europe", spent 2.36m on the campaign second only to the Conservatives' 3.13m. The campaign took UKIP into third place with an extra 10 MEPs. Labour's campaign cost 1.7m, the Lib Dems' 1.19m and the Greens' 404,000, according to figures revealed by the Electoral Commission on Wednesday. Much of the UKIP funding came from Yorkshire millionaire Sir Paul Sykes, who helped bankroll the party's billboard campaign. Critics have accused the party of effectively buying votes. But a UKIP spokesman said Labour and the Conservatives had spent 10m between them on the last general election. "With the advantages of public money the others have, the only way the smaller parties can get their message across is by buying the advertising space," he added.


Britain's economic future will be at the heart of Labour's poll campaign, Chancellor Gordon Brown has said. He was speaking after Cabinet members held their last meeting at No 10 before the expected election announcement. He said voters would recognise that Labour had brought stability and growth, and would continue to do so. Meanwhile the Tories outlined their plans to tackle "yob culture" and the Lib Dems gave more details about their proposals to replace council tax. Earlier the Archbishop of Canterbury wrote to all three parties urging them not to fight the election by exploiting people's fears. In an open letter, he called on them not to turn the election into a competition about who can most effectively frighten voters about terrorism, asylum, and crime. He said they should concentrate instead on issues such as the environment, international development and the arms trade, family policy, and the reform of the criminal justice system. Shadow foreign secretary Michael Ancram said: "We have fought a very positive campaign. I think he will want to look quite carefully at what Jack Straw said about Michael Howard." In a speech to the Foreign Policy Centre Mr Straw said of the Tory leader: "He is clever, fluent and tactical, but he is not wise. "He lacks strategy and good judgment, and his quick temper and impetuosity too often get the better of him." The Foreign Secretary told the BBC: "I was making the observation that because of Michael Howard's impetuosity you can get lurches of policy." Liberal Democrat chairman Matthew Taylor said: "People are already really turned off by the kind of campaign the others are fighting and you will see us putting emphasis on some of these huge issues facing the world, particularly the environment." Labour's focus on the economy as their key message came on the day a new report was published by the Institute of Fiscal Studies, suggesting that household incomes have fallen for the first time in more than a decade. The IFS says the drop partly reflects measures announced in what it called the Chancellor's tax raising Budget of 2002. The Treasury dismissed the research as "complete rubbish". Party election supremo Alan Milburn said the apparent drop in average incomes was because self employed people had been affected by a "world downturn" which hit their profits. Since 1997, the reported average take home income had "risen by 20% in real terms" if you took out the self employed, Mr Milburn told BBC Radio 4's Today programme. Mr Brown also dismissed the figures insisting that the "typical family" has been much better off under Labour.


Shares in Continental Airlines have tumbled after the firm warned it could run out of cash. In a filing to US regulators the airline warned of "inadequate liquidity" if it fails to reduce wage costs by 500m by the end of February. Continental also said that, if it did not make any cuts, it expects to lose "hundreds of millions of dollars" in 2005 in current market conditions. Failure to make cutbacks may also push it to reduce its fleet, the group said. Shares in the fifth biggest US carrier had fallen 6.87% on the news to 10.44 by 1830 GMT. "Without the reduction in wage and benefit costs and a reasonable prospect of future profitability, we believe that our ability to raise additional money through financings would be uncertain," Continental said in its filing to the US Securities and Exchange Commission (SEC). Airlines have faced tough conditions in recent years, amid terrorism fears since the 11 September World Trade Centre attack in 2001. But despite passengers returning to the skies, record high fuel costs and fare wars prompted by competition from low cost carriers have taken their toll. Houston based Continental now has debt and pension payments of nearly 984m which it must pay off this year. The company has been working to streamline its operations and has managed to save 1.1bn in costs without cutting jobs. Two weeks' ago the group also announced it would be able to shave a further 48m a year from its costs with changes to wage and benefits for most of its US based management and clerical staff.


Labour will continue to pursue controversial reforms if it wins a third term in power, the party's election chief Alan Milburn has said. He pledged Labour would encourage more people to achieve their aspirations. "What we want is for more people to earn and own," Mr Milburn told BBC Radio 4's Today show. Tory Shadow Chancellor Oliver Letwin called Labour "a brilliant machine for talking about things" but said it did not deliver policies the country needs. Meanwhile, the Liberal Democrats' President Simon Hughes said: "New Labour has lost people's confidence in a way Old Labour never did." Mr Milburn told Today that Labour wanted policies which encouraged increased social mobility in Britain. Pressed on incapacity benefits, he said the tax and welfare system must "provide the right incentives to people". "No one is talking about driving people into work but what we do know is there are one million people on incapacity benefit who want the opportunity to work, providing the right level of support is there for them". However, backbench Labour MP Karen Buck warned against proposed changes in such benefits. She told the Today programme: "If the policy is seen as being about how do you make the feckless poor go back to work then it is not going to work, on the one hand. And it is not going to improve our electoral chances on the other." Mr Milburn also sought to draw a line under the controversy about reports of a feud between Gordon Brown and Prime Minister Tony Blair. He stressed that Mr Brown would play the same role that he did in the last election. Mr Milburn gave more details of planned reforms in a speech to Labour's Fabian Society, in which he also praised Mr Brown as one of the leaders of the party's reform process. In the speech, he backed choice in schools and hospitals, wider home ownership and changes to the welfare system. Mr Milburn insisted that government reform must continue. "Our task is to rebuild the New Labour coalition around 'one nation politics' that recognise, while life is hard for many, all should have the chance to succeed," he said. "There is a glass ceiling on opportunity in this country. In our first two terms we have raised it. In our third term we have to break it." Voters turned on the party when it failed to reform industrial relations in the 1960s, he also told his audience. Oliver Letwin said the government had failed to deliver in any of the key public services, such as cleaner hospitals, discipline in schools and putting more police on the streets. He said ministers had not delivered cleaner hospitals, with 5,000 people dying from infections last year. New Labour had failed on school discipline because it had not implemented serious reforms so that teachers could run schools, and which would give parents choice, he went on. For the Lib Dems, Simon Hughes said many pensioners are means tested for the money they needed and students who were told there wouldn't be tuition fees and more debt "have been given exactly the opposite". He added: "Under New Labour, all households are still paying unfair council tax rather than a fairer alternative."


By 2025, 40% of the UK's population will still be without internet access at home, says a study. Around 23 million Britons will miss out on a wide range of essential services such as education and medical information, predicts the report by telecoms giant BT. It compares to 27 million, or 50%, of the UK, who are not currently online. The idea that the digital divide will evaporate with time is "wishful thinking", the report concludes. The study calls on the government and telecoms industry to come up with new ways to lure those that have been bypassed by the digital revolution. Although the percentage of Britons without home access will have fallen slightly, those that remain digital refuseniks will miss out on more, the report suggests. As more and more everyday tasks move online and offline services become less comprehensive, the divide will become more obvious and more burdensome for those that have not got net access, it predicts. The gap between "have nets" and "have nots" has been much talked about, but predictions about how such a divide will affect future generations has been less discussed. BT set out to predict future patterns based on current information and taking account of the way technology is changing. Optimists who predict that convergence and the emergence of more user friendly technology will bridge the digital divide could be way off mark, the report suggests. "Internet access on other devices tends to be something taken up by those who already have it," said Adrian Hosford, director of corporate responsibility at BT. Costs of internet access have fallen dramatically and coverage in remote areas have vastly improved over the last year but the real barrier remains psychological. "There is a hard rump of have nots who are not engaging with the net. They don't have the motivation or skills or perceive the benefits," said Mr Hosford. As now, the most disadvantaged groups are likely to remain among low income families, the older generation and the disabled. Those on low incomes will account for a quarter of the digital have nots, the disabled will make up 16% and the elderly nearly a third by 2025, the report forecasts. Organisations such as BT have a responsibility to help tackle the problem, said Mr Hosford. The telco has seen positive results with its Everybody Online project which offers internet access to people in eight deprived communities around Britain. In one area of Cornwall with high levels of unemployment, online training helped people rewrite CVs and learn skills to get new jobs, explained Mr Hosford. Such grassroot activity addressing the specific needs of individual communities is essential is the problem of the digital divide is to be overcome, he said. "If we don't address this problem now, it will get a lot worse and people will find it more difficult to find jobs, education opportunities will be limited and they'll simply not be able to keep up with society," he said. The Alliance for Digital Inclusion, an independent body with members drawn from government, industry and the voluntary sector has recently been set up to tackle some of the issues faced by the digital refuseniks.


Wales could follow England's lead by training with a rugby league club. England have already had a three day session with Leeds Rhinos, and Wales are thought to be interested in a similar clinic with rivals St Helens. Saints coach Ian Millward has given his approval, but if it does happen it is unlikely to be this season. Saints have a week's training in Portugal next week, while Wales will play England in the opening Six Nations match on 5 February. "We have had an approach from Wales," confirmed a Saints spokesman. "It's in the very early stages but it is something we are giving serious consideration to." St Helens, who are proud of their Welsh connections, are obvious partners for the Welsh Rugby Union, despite a spat in 2001 over the collapse of Kieron Cunningham's proposed 500,000 move to union side Swansea. A similar cross code deal that took Iestyn Harris from Leeds to Cardiff in 2001 did go through, before the talented stand off returned to the 13 man code with Bradford Bulls. Kel Coslett, who famously moved from Wales to league in the 1960s, is currently Saints' football manager, while Clive Griffiths Wales' defensive coach is a former St Helens player and is thought to be the man behind the latest initiative. Scott Gibbs, the former Wales and Lions centre, played for St Helens from 1994 96 and was in the Challenge Cup winning team at Wembley in 1996.


A brave defensive display, led by keeper David James, helped Manchester City hold the leaders Chelsea. After a quiet opening, James denied Damien Duff, Jiri Jarosik and Mateja Kezman, while Paul Bosvelt cleared William Gallas' header off the line. Robbie Fowler should have scored for the visitors but sent his header wide. Chelsea had most of the possession in the second half but James kept out Frank Lampard's free kick and superbly tipped the same player's volley wide. City went into the game with the proud record of being the only domestic team to beat Chelsea this season. And there was little to alarm them in the first 30 minutes as Chelsea deprived of Arjen Robben and Didier Drogba through injury struggled to pose much of a threat. Indeed, it was the visitors who looked likelier to enliven a drab opening played at a lethargic pace. Shaun Wright Phillips watched by England boss Sven Goran Eriksson showed his customary trickery to burst into the right of the area and deliver a dangerous ball, which was blocked by John Terry. But Chelsea suddenly stepped up a gear and created a flurry of chances. First, Duff got round Ben Thatcher and blasted in a shot that James parried to Kezman, who turned the ball wide. Soon afterwards, Jarosik found space in the area to powerfully head Lampard's corner goalwards but James tipped the ball over. Chelsea were now looking more like Premiership leaders and James kept out Kezman's fierce drive before Bosvelt and James combined to clear Gallas' header from Duff's corner. City broke swiftly up the field and the last chance of a frenetic spell should have resulted in Fowler celebrating his 150th Premiership goal. Wright Phillips raced down the left and crossed to Fowler but City's lone man up front, left free by Terry's slip, contrived to head wide when it seemed a breakthrough was certain. The second half started as quietly as the first, although James was forced to divert a cross from the lively Duff away from Eidur Gudjohnsen's path. There was a nasty moment for Petr Cech, looking for a ninth straight clean sheet in the league, when a series of ricochets saw Fowler chase a loose ball in the area and collide accidently with the Czech Republic stopper. Another quiet spell followed, which Duff interrupted with a surging run that was halted illegally on the edge of the penalty area by Bosvelt. Lampard stepped up to blast a shot through the wall and James somehow blocked it with his legs. Another timely challenge, this time from Richard Dunne in time added on, prevented Gudjohnsen from getting in a shot. There was still time for James to produce a sensational save to tip Lampard's volley round the post. Cech, Paulo Ferreira, Gallas, Terry, Bridge, Jarosik (Tiago 56), Lampard, Makelele, Duff, Gudjohnsen, Kezman (Cole 63). Subs Not Used: Johnson, Smertin, Cudicini. Makelele, Gudjohnsen. James, Mills, Distin, Dunne, Thatcher, Shaun Wright Phillips, Bosvelt, Barton, Sibierski (McManaman 85), Musampa, Fowler. Subs Not Used: Macken, Weaver, Onuoha, Jordan. Bosvelt. 42,093 H Webb (S Yorkshire).


A call for ethnic minority shortlists to boost the number of black and Asian MPs has been rejected by one of Labour's most senior Asians. Shahid Malik, who is on Labour's ruling NEC, accepted people's frustration but said there should be targets not lists to boost representation of minorities. Just 13 of Britain's 659 MPs are from ethnic minority groups, he added. Commission for racial equality chief Trevor Phillips argued on Sunday the time had come for such shortlists. That came after it emerged that one of Britain's most ethnically diverse constituency, West Ham, was to get a women only shortlist for the next election following an NEC ruling. Mr Phillips said changes to the race relations legislation might allow political parties to reserve seats for under represented groups. For example in West Ham, this might allow only women and minorities to seek to be candidates. "If we get to the other side of the general election and find that minorities are not represented, we have to say that after 20 or 30 years of talking about this, we cannot go on the same way," he said. He added: "It would be terribly disappointing if in the least white constituency West Ham in the whole of Europe we didn't have a minority candidate." Appearing on BBC Radio 4's Today programme, Mr Malik, who is himself running for the seat of Dewsbury, acknowledged that so far women only shortlists had failed to deliver a boost in the number of ethnic minority candidates. But he argued: "I do think that there currently things that parties can do and which they aren't doing... for example setting targets to ensure that existing democratic structures are more reflective." Labour MP Diane Abbot, who backs Mr Phillips' proposal of shortlists, said she had been elected along with three other ethnic minority MPs Keith Vaz, Paul Boateng and Bernie Grant in 1987 but it took another 10 years before another black woman was able to win a seat. That was a rate of progress Ms Abbott described as "painful". "I am a little older than Shahid and served on the National Executive Committee in the 1990s I was the first black person on the NEC ... crossing our fingers and hoping we are going to get more black and Asian MP hasn't worked," she said. "The shortlist strategy works for women and I believe that it can be made to work for black and Asian people." On Tuesday Labour chairman Ian McCartney said his party was "ambitious" to improve black and Asian representation. "We haven't ruled out all black shortlists and welcome a debate in the party about this," he said.


Thousands of website bulletin boards have been defaced by a virus that used Google to spread across the net. The Santy worm first appeared on 20 December and within 24 hours had successfully hit more than 40,000 websites. The malicious program exploits a vulnerability in the widely used phpBB software. Santy's spread has now been stopped after Google began blocking infected sites searching for new victims. The worm replaces chat forums with a webpage announcing that the site had been defaced by the malicious program. Soon after being infected, sites hit by the worm started randomly searching for other websites running the vulnerable phpBB software. Once Google started blocking these search queries the rate of infection tailed off sharply. A message sent to Finnish security firm F Secure by Google's security team said: "While a seven hour response for something like this is not outrageous, we think we can and should do better." "We will be reviewing our procedures to improve our response time in the future to similar problems," the Google team said. Security firms estimate that about 1m websites run their discussion groups and forums with the open source phpBB program. The worst of the attack now seems to be over as a search conducted on the morning of the 22 December produced only 1,440 hits for sites showing the text used in the defacement message. People using the sites hit by Santy will not be affected by the worm. Santy is not the first malicious program to use Google to help it spread. In July a variant of the MyDoom virus slowed down searches on Google as the program flooded the search site with queries looking for new e mail addresses to send itself to.


Labour MP Stephen Pound has told of his shock and his joy on learning he fathered a daughter when he was "out of control" during the "wild" 1960s. Lucy, 36, tracked down Mr Pound after her birth mother told her he was known as "Precious" at school. Despite being told he was a "nutter who died at sea" she found a reference to Mr Pound on Friends Reunited. Lucy's mother kept her pregnancy secret and had her adopted at four weeks. Mr Pound found out about it last year. That happened when Lucy wrote to his Parliamentary office saying she believed he was her father. Mr Pound, who is now married with two other teenage children, said: "I was a nutter and I was a sailor but I wasn't dead." He said his first reaction was to wonder if he was victim of a "set up" but he then realised all the dates fitted. "It was a pretty horrible thing with a pretty happy ending. I felt guilt in the marrow of my bones," said the Ealing North MP. "I don't blame Lucy's mother. I was pretty much out of control. I was 18 when she was conceived. It was a different time it was pretty wild." Mr Pound says he rang Lucy as soon as he got her letter, they met up and have been in contact ever since. Describing that first meeting at London's King Cross station, he said: "The earth went from under my feet ... We were walking across the Euston Road and I took her arm to take her across and there was an immediate connection. "We were finishing each other sentences." Lucy, who was adopted by a family from Essex, wants to remain anonymous for the sake of her adoptive father and her children. Mr Pound said his wife Maggie had been fully supportive and their two children Emily, 16, and Pelham, 14 were pleased to have an older sister.


Kelly Holmes has been chosen for both the 800m and 1500m at next month's European Indoor Championships despite not yet confirming her availability. The double Olympic champion is still undecided about whether to compete in her first European Indoors in Madrid. But UK Athletics chief Max Jones believes it is likely Holmes will race. He said: "It's worth a punt, isn't it? She's gone back to training. If she's confident she will pick one (distance). The programme does not permit both." If Holmes does take her place in the GB side, she has already indicated that 1500m will be her favoured distance. Under championship rules, she does not have to decide until 24 hours before the event begins in Madrid on 4 March. Jones added: "She was pleased with her run in Birmingham (at last weekend's Grand Prix). "I am inclined to think she will (compete). It could depend on how training goes and she will have to be close to top form." And he admitted Holmes' presence would be a great boost to the rest of the Norwich Union GB team. "She is a very good team member and is very good to have there," he added. Meanwhile, there is no surprises in the rest of the Great Britain team announced on Tuesday. Defending 60m champion Jason Gardener is included and will be chasing his third successive gold medal. He will be joined in the event by Mark Lewis Francis runner up behind him three years ago in Vienna and new boy Darren Chin. Kelly Sotherton has been invited by championship organisers to compete against Carolina Kluft in the pentathlon. Sotherton finished third in the Olympic heptathlon in Athens, where the Swede took gold. There are 16 newcomers at this level of competition in GB's 46 strong team. The championships will be the last to be attended by Jones before he retires to be succeeded by Dave Collins. Jones said: "The Olympic Games is the overwhelming target for UKA and therefore it is beneficial to start the next four year cycle with a not so pressurised major games. "The European Indoor Championships always provide a chance for the young and inexperienced to make a name for themselves and the current indoor season has produced some exciting new talent. "Madrid is the first small step on a long journey to Beijing and the 2008 Olympics but for some of the emerging athletes, this will be a very important step." 60m: D Chin (Belgrave Harriers), J Gardener (Wessex and Bath), M Lewis Francis (Birchfield Harriers). T Abeyie (Woodford Green with Essex Ladies), C Lambert (Belgrave Harriers). D Garland (Channel Islands AC). J McIlroy (Windsor, Slough, Eton and Hounslow AC), Jimmy Watkins (Cardiff AAC). Ed Jackson (Aldershot, Farnham and District), N Speaight (Belgrave Harriers), J Thie (Cardiff AAC). A Baddeley (Harrow AC), M Farah (Windsor, Slough, Eton and Hounslow AC), J Mayock (Barnsley AC). D Greaves (Newham and Essex Beagles), A Scott (Shaftesbury Barnet Harriers), A Turner (Notts AC). B Challenger (Belgrave Harriers). Pole vault: N Buckfield (Crawley AC). N Morgan (Birchfield Harriers), C Tomlinson (Newham and Essex Beagles). L Achike (Shaftesbury Barnet Harriers), N Douglas (Oxford City AC), P Idowu (Belgrave Harriers). D Cossins (Birchfield Harriers), R Davenport (Gloucester AC), D Garland (Channel Islands AC), R Preddy (Gloucester AC), G Warburton (Cardiff AAC). K Endacott (City of Plymouth AC), J Kwakye (Woodford Green with Essex Ladies), J Maduaka (Woodford Green with Essex Ladies). K Wall (Basildon AC). K Holmes (Ealing, Southall and Middlesex AC). H Clitheroe (Preston Harriers), K Holmes (Ealing, Southall and Middlesex AC). J Pavey (Exeter Harriers). D Allahgreen (Trafford AC), S Claxton (Belgrave Harriers). J Crane (Sale Harriers Manchester), S Jones (Trafford AC). J Whitlock (Trafford AC). J Johnson (Herne Hill Harriers). K Sotherton (Birchfield Harriers). D Fraser (Croydon Harriers), L McConnell (Shaftesbury Barnet Harriers), C Murphy (Woodford Green with Essex Ladies), M Purkiss (Southampton AC).


Your computer can now help solve the world's most difficult health and social problems. Launched this week, the World Community Grid will use idle computer time to test solutions to these problems. The donated processor cycles will help the WCG create virtual supercomputers via the net. The idea follows the success of other similar projects that have used the untapped processing power of millions of desktop PCs. One of the most successful collaboration projects was Seti home, run by the Search for Extra Terrestrial Life project, which sorted through radio signals looking for signs of alien communication. Anyone can volunteer to donate the spare time of their computers by downloading a special screensaver from the WGC website. Once installed, the virtual terminal gets a chunk of the computational task to process, and reports back after completing that task. The first WCG problem being tackled will be the Human Proteome Folding Project, which hopes to identify the ways that the proteins in our body fold. The subjects of study are being selected by an international advisory board of experts specializing in health sciences, and technology. The body will evaluate proposals from leading research, public and not for profit organizations, and is expected to oversee up to six projects a year. Organisations also represented on the board include the United Nations Development Programme and the World Health Organisation. "The World Community Grid will enable researchers around the globe to gather and analyze unprecedented quantities of data to help address important global issues," said Elain Gallin, program director for medical research at the Doris Duke Charitable Foundation. " It will inspire us to look beyond the technological limitations that have historically restricted us from addressing some of our most intractable problems", she added. IBM has donated the hardware, software, technical services and expertise to build the basic infrastructure for the grid. The computer company, working with United Devices, previously developed the Smallpox Research Grid, which linked together more than two million volunteers from 226 countries to speed the analysis of some 35 million drug molecules in the search for a treatment for Smallpox.


Plans to abolish 162 quangos have been unveiled by the Conservatives as part of their effort to show how government red tape can be cut. Six government units would also be scrapped under proposals which the Tories say would save more than 4.3bn. Among the targets are strategic health authorities and the new fair access regulator for universities. Tory frontbencher John Redwood said Britain needed a slimmer government and lower taxes to be competitive. The plans would abolish regional assemblies and other regional bodies, such as boards tackling industrial development and housing. Their powers would be returned to elected local councils or national government. The Tories say the strategic health authorities are not needed as it is better that local people, rather than officials, run hospitals and surgeries. Announcing the plans, Mr Redwood said: "Mr Blair has forgotten the interests of taxpayers, and has broken the pledges he made. "Far from improving public services, spending taxpayers' money on quangos has led only to more bureaucrats, more regulation and higher taxes." His party leader, Michael Howard, argued a change in direction was needed to get a grip on spending. "Labour are creating Two Britains: the Britain of the forgotten majority and bureaucratic Britain," he said. "In the real world, people are working harder just to stand still. They've seen their pensions knocked for six. "They're being squeezed by extra taxes. The forgotten majority are paying the price of bureaucratic Britain." The government has announced plans to cut 100,000 civil servants as part of its efficiency drive. The Liberal Democrats have said they would cut the number of Whitehall departments to make sure money reaches frontline services.


Tony Blair has rejected calls for the publication of advice on the legality of the Iraq war amid growing calls for an investigation. The prime minister told his monthly press conference the matter had been dealt with by the Attorney General. Earlier, Conservative MP Michael Mates joined calls for a probe into claims Lord Goldsmith's statement to Parliament was drawn up at Number 10. Mr Blair said the statement was a "fair summary" of Lord Goldsmith's opinion. "That's what he (Lord Goldsmith) said and that's what I say. He has dealt with this time and time and time again," Mr Blair told his monthly news conference in Downing Street. He refused to answer further questions on the issue, saying it had been dealt with "literally scores of times and the position has not changed". Lord Goldsmith has denied being "leaned on" and says the words written were his. The government refuses to publish his advice on the legality of the war saying such papers have always been kept confidential. Mr Mates, who is a member of the Commons intelligence and security committee and was part of the Butler inquiry into pre war intelligence, told the BBC on Friday: "That, as a general rule, is right, but it's not an absolute rule." He said there had been other occasions when advice had been published, most recently regarding Prince Charles's marriage plans. The government could not pick and choose when to use the convention, he said. Mr Mates added: "We discovered that there were two or three occasions in the past when law officers' advice to the government has been published. "And this may be one of those special occasions... when it would be in the public interest to see the advice which the attorney general gave to the prime minister." This is argument was rejected by Mr Blair, who said: "Firstly, we haven't broken the precedent, and secondly Peter Goldsmith has made his statement and I have got absolutely nothing to add to it." In a book published this week, Philippe Sands QC, a member of Cherie Blair's Matrix Chambers, says Lord Goldsmith warned Tony Blair on 7 March 2003 that the Iraq war could be illegal without a second UN resolution sanctioning military action. But a short statement about Lord Goldsmith's position was presented in a written parliamentary answer on 17 March 2003 just before a crucial Commons vote on the military action. Mr Sands' book suggests it was actually written by Home Office Minister Lord Falconer and Downing Street adviser Baroness Morgan. Former minister Clare Short, who resigned from the government over the Iraq war, said it was the same statement that was earlier shown to the cabinet as it discussed military action. She told the BBC the full advice should have been attached, according to the ministerial code. "My view is we need the House of Lords to set up a special committee, summon the attorney, get all the papers out, look at exactly what happened," she said. The Conservatives and Liberal Democrats say they want the publication of the full legal advice given by the Attorney General. On Thursday, Lord Goldsmith said his statement had not been "written by or at Number 10". "In my parliamentary answer on March 17 2003, I explained my genuinely held independent view, that military action was lawful under the existing Security Council resolutions," he said.


US car firms General Motors (GM) and Ford have been forced to cut production in the face of falling car sales. US sales at GM sank 12.7% in February compared to a year ago while Ford sales dropped 3% as foreign rivals took a bigger share of the market. Meanwhile, Asian carmakers fared well Toyota sales jumped 11% while rival Nissan notched up a 10% increase. Overall. sales across the industry also fell to 1.25 million vehicles from 1.27 million a year earlier. GM and Ford blamed high fuel prices for low sales of big trucks and gas guzzling sports utility vehicles (SUVs) the vehicles that provide the biggest profits. GM added that US truck sales fell 9% in February while car business tumbled 17%, however it did acknowledge that some new products such as the Pontiac G6 and Chevrolet Cobalt had put in solid performances. "The calendar year is starting off slower than expected, both for GM and the industry," said Mark LaNeve, GM's vice president for North American sales, service and marketing. The slump in sales prompted the group to cut production in North America by 3% it has already reduced output by around 9% in the face of growing stockpiles. Meanwhile, Ford which posted its ninth consecutive drop in monthly US sales, said it was cutting first quarter North American production by another 10,000 vehicles, or 1.2%. Chrysler, the US unit of Germany's DaimlerChrysler, was the only Detroit based automaker to boast an increase in market share during the month with sales rising 8%. But America's loss was its foreign rivals' gain as they continued to nibble away at the US market. While Japan's top car maker Toyota and Nissan saw sales accelerate, even the smaller Suzuki Motor Corp snapped up a more business with sales improving 17.6% on a year ago. In 2003, the firm launched an ambitious plan to triple US sales by 2007 as it seeks to become a bigger player in the Asian assault on the US market. Korea's Hyundai was another big gainer, turning in a 19% surge in February sales. Toyota put its rise in sales down to strong results for its redesigned Avalon sedan and a 120% surge in sales of its gas electric Prius hybrid mid size sedan as petrol price conscious consumers looked to vehicles that were cheaper to run. "As gas prices continue their upward march, fuel efficiency catches the public eye," Jim Press, vice president and chief operating officer of Toyota's US sales arm, said in a statement.


Tony Blair has pledged to "never, ever, ever" attack Tory leader Michael Howard over his Jewish beliefs. The prime minister told the Jewish Chronicle: "If you look at what I do, I attack Michael Howard politically." Mr Blair also distanced himself from recent Labour campaign posters featuring Mr Howard, which critics claimed were "anti Semitic". These were "not intended to cause any offence to anyone on the Jewish community," Mr Blair insisted. One poster depicted Mr Howard and his shadow chancellor Oliver Letwin, who is also Jewish, as flying pigs. Another pictured the Tory leader swinging a pocket watch on a chain, which critics said echoed the Jewish money lender Shylock in Shakespeare's Merchant of Venice. Others compared the image to the character Fagin in Charles Dickens' Oliver Twist. Labour has since taken the designs of its website, saying members had preferred other designs. During his interview with the Jewish Chronicle, Mr Blair said: "I've been a very strong supporter of the Jewish community and Israel, and will always be so." Pressed on whether he would draw attention to Mr Howard's Jewish beliefs in an attempt to attract Muslim support, he replied: "The idea that I would allow anybody to make such a charge is outrageous. It's untrue. "If you look what I do, I attack Michael Howard politically. I would never, ever, ever attack him on that basis." Mr Blair also defended his party's attitude towards the Jewish community, pointing out that it was his government that had introduced the Holocaust Memorial Day. He added that Labour also aggressively fought all forms of racism. Neither the Conservatives nor the Liberal Democrats wished to comment on Mr Blair's words. The prime minister was speaking as London's Labour mayor Ken Livingstone remains embroiled in a row over comments he made to a Jewish reporter from the city's Evening Standard newspaper. Mr Blair repeated calls for the mayor to apologise for likening the reporter, Oliver Finegold, to a concentration camp guard. Mr Livingstone "should have withdrawn the comment immediately" once he realised the journalist was Jewish, said Mr Blair. "I'm sure that is what in truth he wants to do. Well, he should do it." Mr Livingstone has said he could not sincerely say sorry for the comments he made, and claims he has been targeted by the newspaper. He conceded his comments may have been offensive but were not racist, and said earlier this week he would not apologise even if Mr Blair asked.


The European Commission (EC) has called a truce in its battle with France and Germany over breaching deficit limits. The move came after France and Germany vowed to run their budget deficits below the EU cap in 2005 for the first time in four years. But, the EC did warn the two were under close scrutiny and it would act if their fiscal situations deteriorated. Under EU rules, member countries must keep their deficits below 3%. France and Germany will breach that this year. It will be the third year in a row that the two countries have broken the European Union's Stability and Growth Pact rules. The eurozone's two biggest economies left the pact in tatters in November 2003 when they persuaded fellow EU members to put the threat of penalties for deficit breaches on hold. The commission then took the pair to the European Court of Human Justice which ruled EU countries could not put the pact "in abeyance", and confirmed the EC's right to launch "excessive debt procedures". After announcing its decision to erase France and Germany from its list of deficit rule breakers, the EU said that the time lag created by the ruling meant that 2005 should be the target year for the pair to bring their budget's below 3%. "The commission concludes that the two countries appear to be on track to correct their excessive deficits by 2005," it said in a statement. The EU expects the German deficit to fall to fall to 2.9% of GDP next year from 3.9% this year, while France's is forecast to drop to 3% from an expected 3.7% this year. The forecasts are based on EC predictions of GDP growth of 1.5% in Germany next year and 2.2% in France. Berlin welcomed the decision, with finance minister Hans Eichel saying it showed that the EC recognised Germany's fiscal policy was "on the right track even amid very difficult economic conditions". However Paris was more subdued, with finance minister Herve Gaymard telling parliament: "We must continue along this path of saving money." However, the move still had its critics, with the European People's Party (EPP) attacking the EC for backing down from punitive action. "The Commission is buckling under the pressure from Germany and France, " EPP spokesman Alexander Radwan said. "The scary fact is that budget sinners, despite having repeatedly exceeded the 3% deficit limit, do not have to fear any sanctions." Despite the commission delivering its decision on the two biggest eurozone economies, it refused to comment on similar action against Greece which has also broken the 3% deficit ceiling. Monetary Affairs Commissioner Joaquin Almunia said that it was a matter for next week.


Plans to extend paid maternity leave beyond six months should be prominent in Labour's election manifesto, the Trade and Industry Secretary has said. Patricia Hewitt said the cost of the proposals was being evaluated, but it was an "increasingly high priority" and a "shared goal across government". Ms Hewitt was speaking at a gender and productivity seminar organised by the Equal Opportunities Commission (EOC). Mothers can currently take up to six months' paid leave and six unpaid. Ms Hewitt told the seminar: "Clearly, one of the things we need to do in the future is to extend the period of payment for maternity leave beyond the first six months into the second six months. "We are looking at how quickly we can do that, because obviously there are cost implications because the taxpayer reimburses the employers for the cost of that." Ms Hewitt also announced a new drive to help women who want to work in male dominated sectors, saying sexism at work was still preventing women reaching their full potential. Plans include funding for universities to help female science and engineering graduates find jobs and "taster courses" for men and women in non traditional jobs. Women in full time work earn 19% less than men, according to the Equal Opportunities Commission (EOC). The minister told delegates that getting rid of "career sexism" was vital to closing the gender pay gap. "Career sexism limits opportunities for women of all ages and prevents them from achieving their full potential. "It is simply wrong to assume someone cannot do a job on the grounds of their sex," she said. Earlier, she told BBC Radio 4's Today programme: "What we are talking about here is the fact that about six out of 20 women work in jobs that are low paid and typically dominated by women, so we have got very segregated employment. "Unfortunately, in some cases, this reflects very old fashioned and stereotypical ideas about the appropriate jobs for women, or indeed for men. "Career sexism is about saying that engineering, for instance, where only 10% of employees are women, is really a male dominated industry. Construction is even worse. "But it is also about saying childcare jobs are really there for women and not suitable for men. Career sexism goes both ways." She added that while progress had been made, there was still a gap in pay figures. "The average woman working full time is being paid about 80p for every pound a man is earning. For women working part time it is 60p." The Department for Trade and Industry will also provide funding to help a new pay experts panel run by the TUC. It has been set up to advise hundreds of companies on equal wage policies. Research conducted by the EOC last year revealed that many Britons believe the pay gap between men and women is the result of "natural differences" between the sexes. Women hold less than 10% of the top positions in FTSE 100 companies, the police, the judiciary and trade unions, according to their figures. And retired women have just over half the income of their male counterparts on average.


Chelsea manager Jose Mourinho expects the Champions League clash with Barcelona to be a fight to the finish. Mourinho is relishing the first leg of the tie against his former club in the last 16 in the Nou Camp. He said: "I wouldn't be surprised if nothing had been decided by the last minute of the return leg and the match had to go into extra time. "I have to defend what is mine and the Champions League is mine at the moment. I'm the last manager to have won it." Mourinho never coached Barcelona, assisting both Sir Bobby Robson and Louis van Gaal. But he is not envious, insisting: "I don't have to be jealous about Barcelona because they have 100 years of history and have won the European Cup once. "I have been managing for five years and I have the same amount of Champions League trophies to my name." Barcelona star Ronaldinho admitted: "I think that it is going to be a difficult match for us because Chelsea have a good team full of big stars. "I have seen Chelsea a few times on television, tactically they are very good and they are very strong on the counter attack. "They pressure very well and keep possession of the ball so it will be important that we play our own game. "I believe they are the two strongest teams in Europe. Nevertheless, Barcelona are accustomed to playing big games at the Nou Camp, where they have to face the likes of Real Madrid each season. "It is a special game, the atmosphere in the city changes, there are lots of journalists but inside the dressing room there is not a lot of difference," Ronaldinho added. "We are only thinking of winning the match with all respect to the opposition."


Injured Chelsea winger Arjen Robben has insisted that he only has a 10% chance of making a return against Barcelona in the Champions League. The 21 year old has been sidelined since breaking a foot against Blackburn last month. Chelsea face Barcelona at home on 8 March having lost 2 1 in the first leg. And Robben told the Daily Star: "It is not impossible that I will play against Barcelona but it is just a very, very small chance about 10%." Robben has been an inspirational player for Chelsea this season following a switch from PSV Einhoven last summer. He added: "My recovery is going better than we expected a few weeks ago but I think the Barcelona game will come too soon. "I won't take any risks and come back too soon."


Former Olympic champion Michael Johnson has accused Britain's top sprinters of lacking pride and ambition. "At the moment, the biggest factor on the mind of British sprinters is to be number one in Britain," the world 200m and 400m record holder told Five Live. "Athletics at the moment is all about international competitions and they need to show a little more pride." However, Linford Christie countered: "It's easy to criticise when you haven't gone through the system here." Johnson was involved in a verbal spat with Britain's Darren Campbell earlier this year. The American had cast doubt on Campbell's claims he had torn a hamstring in the wake of his failure to reach the Olympic 100m and 200m finals. And the American remains highly critical of aspects of British sprinting. "The only time you see British sprinters getting upset or riled is when there is a debate as to which one is better than the other," he claimed. "Athletes here have to compete more outside the UK. Their focus has to be on being the best in the world and not just on being the top British sprinter." Speaking at an elite coaches' conference in Birmingham, Johnson also argued that although there has been more investment in the sport in Britain, it had not necessarily reaped the rewards. "You can't fix everything with money," he admitted. "You contrast the situation here to that of some US athletes who have no funding. "Those who aren't funded might be hungrier and more motivated because their road to success is a lot more difficult and challenging. "So when they get to the top they are more appreciative."


Ex chat show host Robert Kilroy Silk has quit the UK Independence Party and accused it of betraying its supporters. The MEP said he was ashamed to have joined the party, which he labelled as a "joke". He plans to stand in the next general election but refused to confirm he is setting up a new political party called Veritas Latin for truth. UKIP leader Roger Knapman said he would "break open the champagne", adding: "It was nice knowing him, now 'goodbye'." However, he did say the ex chat show host had been "quite useful initially". "He has remarkable ability to influence people but, sadly, after the (European) election it became clear that he was more interested in the Robert Kilroy Silk Party than the UK Independence Party so it was nice knowing him, now 'goodbye'," Mr Knapman told BBC Radio 4's Today programme. Mr Knapman rejected the idea Mr Kilroy Silk posed a threat to UKIP and queried why he had failed to confirm rumours he was starting a new political party. Mr Kilroy Silk explained his reasons to his East Midlands constituents at a meeting in Hinckley, Leicestershire. His decision came as UKIP officials began a process which could have triggered Mr Kilroy Silk's expulsion. It marks the end of his membership of UKIP after just nine months. It began with a flood of publicity which helped UKIP into third place in last June's European elections but became dominated by rancour as he tried to take over the party leadership. Mr Kilroy Silk accused his fellow UKIP MEPs of being content with growing fat "sitting on their backsides" in Brussels. He told BBC News 24: "I tried to change the party, I nagged all the way through the summer to do things, to get moving because I thought it was criminal what they were doing, it was a betrayal." Mr Kilroy Silk also told Sky News there was "masses of support" for him to form a new party something he has yet to confirm will happen. UKIP won 12 seats and 16.1% of the vote at the European elections on the back of its call for the UK to leave the European Union In his speech, Mr Kilroy Silk says the result offered UKIP an "amazing opportunity" but the party's leadership had done nothing and "gone AWOL". There were no policies, no energy, no vision and no spokespeople, he said. "The party is going nowhere and I'm embarrassed with its allies in Europe and I'm ashamed to be a member of the party," said Mr Kilroy Silk. He said his conviction in Britain's right to govern itself had not changed. He would continue that campaign outside UKIP when he contested the general election in an East Midlands constituency. Reports of his new party plans have prompted a formal complaint to UKIP's disciplinary committee for bringing the party into "disrepute". On Thursday, the party challenged Mr Kilroy Silk to stand down as an MEP so voters can get a genuine UKIP candidate.


Swiss drugmaker Novartis has announced 5.65bn euros ( 7.4bn; 3.9bn) of purchases to make its Sandoz unit the world's biggest generic drug producer. Novartis, which last month forecast record sales for 2005, said it had bought all of Germany's Hexal. It also acquired 67.7% of Hexal's US affiliate Eon Labs, and offered to buy the remaining shares for 31 each. Novartis said that it would be able to make cost savings of about 200m a year following the acquisitions. Novartis' shares rose 1% to 57.85 Swiss francs in early trading. The deal will see Novartis' Sandoz business overtake Israel's Teva Pharmaceuticals as the world's biggest maker of generics. Based on 2004 figures the newly merged producer would have sales of more than 5bn, the company estimated. Novartis said that it would merge a number of departments, adding that there may be job cuts. "The strong growth outlook for Sandoz, which will create jobs, is expected to partially compensate for necessary reductions in the work force," the firm said in a statement. Generic drugs are chemically identical to their more expensive branded rivals. Producers such as Sandoz can copy the branded products usually after their patent protection expires and can sell them more cheaply as they do not have to pay research and development cost. There are more than 150 generic drugmakers worldwide and analysts have predicted consolidation in a market that they call fragmented. However, not all analysts were initially convinced about the deal. "This is a very expensive acquisition," Birgit Kuhlhoff, from Sal Oppenheim investment bank, told Reuters. "I find it strange that they are making acquisitions in exactly those markets where they suffered price pressure."


A row over whether only Greece should be allowed to label its cheese feta has reached the European Court of Justice. The Danish and German governments are challenging a European Commission ruling which said Greece should have sole rights to use the name. The Commission's decision gave the same legal protection to feta as to Italian Parma ham and French Champagne. But critics of the judgement say feta is a generic term, with the cheese produced widely outside Greece. The Commission's controversial 2002 ruling gave "protected designation of origin" status to feta cheese made in Greece, effectively restricting the use of the feta name to producers there. From 2007 onwards, Greek firms will have the exclusive use of the feta label and producers elsewhere in Europe must find another name to describe their products. The German and Danish governments argue that feta does not relate to a specific geographical area and that their firms have been producing and exporting the cheese for years. "In our opinion it is a generic designation and we do not have any other name or term for this type of cheese," Hans Arne Kristiansen, a spokesman for the Danish Dairy Board, told the BBC. Denmark is Europe's second largest producer of feta after Greece producing about 30,000 tonnes a year and exports its products to Greece. It is concerned that the ruling could threaten the production of other cheeses in Denmark such as brie. "It would cost millions if we wanted to introduce a new designation," Mr Kristiansen said. "That is just one of the costs." The case will also have a major impact on Britain's sole feta producer, Yorkshire company Shepherds Purse Cheeses. Judy Bell, the company's founder, said it would cost a huge amount to rebrand its product. "If we lose we will have to go through a massive re merchandising process and reorganisation," she said. "We have never tried to pull the wool over anyone's eyes it's very clear from the label that it's Yorkshire feta." The original decision was a victory for Greece, where feta cheese is believed to have been produced for about 6,000 years. Feta is a soft white cheese made from sheep or goat's milk, and is an essential ingredient in Greek cuisine. Greece makes 115,000 tonnes, mainly for domestic consumption. The Court is expected to reach a verdict in the case in the autumn.


Aston Villa's Carlton Cole could be out for six weeks with a knee injury. The striker, who is on a season long loan from Chelsea, picked up the knock in an England Under 21 match against Holland earlier this month. "Carlton will be out of action for four to six weeks after a bad challenge," said Villa boss David O'Leary. "I won't be able to tell you whether he will need an operation until maybe next week. Whether he has an operation has got to be left to Chelsea." Cole, who also struggled with an ankle problem earlier in the season, was unable to rest because O'Leary had a shortage of strikers. The return to fitness of Darius Vassell after four months out with a broken ankle and the emergence of Luke Moore has alleviated some of the Villa's manager's problems in that department.


Federal Reserve chairman Alan Greenspan has warned that allowing huge US budget deficits to continue could have "severe" consequences. Speaking to the House Budget Committee he urged Congress to take action to cut the deficit, such as increasing taxes. While the US economy is growing at a "reasonably good pace" he warned that budget concerns were clouding the economic outlook for the US. Pension and healthcare costs posed the greatest risks to the economy, he said. The government program faces severe financial strains in coming decades as the massive baby boom generation retires. "I fear that we may have already committed more physical resources to the baby boom generation in its retirement years than our economy has the capacity to deliver. If existing promises need to be changed, those changes should be made sooner rather than later," Mr Greenspan said. He also warned that unless the nation sees unprecedented rises in productivity "retirement and health programmes would need "significant" changes. He called on Congress to cut promised benefits for retirees, as the promised benefits for the soon to retire baby boom generation were much larger than the government could afford. Meanwhile any move to narrow the deficit gap by raising taxes could pose a significant risk to the economy by dampening growth and spending, he added. He also urged Congress to reinstate lapsed rules that require tax cuts and spending to be offset elsewhere in the budget in an effort to prevent the US heading further into the red. Despite the dire warnings, Mr Greenspan did offer some good news for the short term. As US growth gathers steam and incomes rise that should lead to a narrowing of the deficit. Recent increases in defence and homeland security spending were also not expected to continue indefinitely, which should cut some costs. Since President George W Bush came to office the federal budget has swung from a record surplus to a record deficit of 412bn last year.


Scotland manager Walter Smith says he wants to restore the national team's respectability in world football. Smith has joined his first squad for a three day get together near Manchester in preference to playing a friendly. While qualification for the 2006 World Cup appears to be beyond Scotland, Smith is anxious that the remainder of the campaign should be positive. "I think we have got to try to get a bit of respectability back in whatever way we can," he said. "We will have to approach each game differently. Obviously we will have to approach the Italian game away from home in a different manner to Moldova at home. "We have to meet the challenge of each match." Smith, meeting a number of his squad for the first time, brought them together on Monday to outline his ideas for improving the nation's fortunes. He said: "I pointed out how I see the international team going forward and that was the main topic. "This is a relaxed gathering and I don't think there is a lot of doom and gloom about the squad that a lot of people think exists." A 25 man squad will spend the next three days based at the Mottram Hall hotel in Cheshire and will train at Manchester United's nearby Carrington complex. Smith will be absent for the final sessions, however, as he is due to fly out to Sardinia on Wednesday to watch Italy's friendly with Russia.


Venezuela is to review all foreign investment in its mining industries in an effort to strengthen its indigenous industrial output. President Hugo Chavez has ordered all existing contracts with foreign firms to be examined to see if they provide maximum benefits to the country. The review will cover production of gold, aluminium and iron ore although it excludes the country's oil sector. Chavez has sought to extend the state's role in all sectors of the economy. The left wing president is conducting a controversial review of land ownership in the country while also seeking to create a state run telecoms firm to compete with foreign owned businesses. He has argued that major economic reforms are vital to improve the lives of Venezuela's poorest citizens. Announcing the review of raw material production, minister Victor Alvarez said the government would seek to transfer technology, training capability and content from projects with foreign partners. "We are defending our national sovereignty over the use of our national resources which must serve the endogenous development of the nation," Mr Alvarez said. "For this reason we are reviewing all memorandums of understanding, all letters of intent, all agreements that have been signed, all contracts, to check which of these comply with these directives. "Everything, absolutely everything, has to be reviewed." Venezuela has previously assured foreign companies with operations in the mineral rich country that it respects existing contracts. However, the government insisted that it needed to develop its own industrial infrastructure in order to create new jobs and lessen its reliance on foreign partners. "If we don't do this, we are just going to carry on being slaves, suppliers of raw materials, all our lives and we will never develop our own productive capacity," Mr Alvarez added. Companies from the United States, Canada, France and Switzerland all have substantial investments in Venezuela's mining sector.


The luxury cruise liner Crystal Harmony, currently in the Gulf of Mexico, is the unlikely setting for tests of biometric technology. As holidaymakers enjoy balmy breezes, their ship's crew is testing prototype versions of the world's first internationally issued biometric ID cards, the seafarer's equivalent of a passport. Along with the owner's picture, name and personal details, the new Seafarers' Identity Document incorporates a barcode representing unique features of its holder's fingerprints. The cards are due to be issued in February next year, in line with the revised UN Convention on Seafarers' Identity Documents of June 2003. Tests currently under way in the Caribbean are designed to ensure that new cards and their machine readers, produced by different companies in different countries, are working to interoperable standards. Results of the current tests, which involve seafarers from a wide range of occupations and nationalities, will be published by the International Labour Organisation (ILO) by the end of November. Crystal Cruises, which operates the Crystal Harmony, is exploring the use of biometrics but has not yet committed to the technology. Authenti corp, the US technology consultancy, has been working with the ILO on its technical specifications for the cards. "If you're issued a seafarer's ID in your country, you want to be sure that when the ship lands in a port in, say, my country you can validate yourself using whatever equipment we have installed," Authenti corp's CEO, Cynthia Musselman, told the BBC's Go Digital programme. She said French, Jordanian and Nigerian nationals would be the first seafarers to get the new ID cards since their countries have already ratified the convention. It aims to combat international terrorism whilst guaranteeing the welfare the one million seafarers estimated to be at sea. The convention highlights the importance of access to shore facilities and shore leave as vital elements to a sailor's wellbeing and, therefore, it says, to safer shipping and cleaner oceans. "By increasing security on the seas as well as border control and protection, the cards will hopefully reduce the number of piracy problems around the world," said Ms Musselman. "It should be a safer environment for seafarers to work in, and will allow people protecting their borders to have confidence that the people getting off the ship are, in fact, seafarers."


Tate Lyle's chief executive has been named European Businessman of the Year by a leading business magazine. Iain Ferguson was awarded the title by US publication Forbes for returning one of the UK's "venerable" manufacturers to the country's top 100 companies. The sugar group had been absent from the FTSE 100 for seven years until Mr Ferguson helped it return to growth. Tate's shares have leapt 55% this year, boosted by firming sugar prices and sales of its artificial sweeteners. "After years of a sagging stock price and a seven year hiatus from the FTSE 100, one of Britain's venerable manufacturers has returned to the vaunted index," Forbes said. Mr Ferguson took the helm at the company in 2003, after spending most of his career at consumer goods giant Unilever. Tate Lyle, which was an original member of the historic FT 30 index in 1935, operates more than 41 factories and 20 more additional production facilities in 28 countries. Previous winners of the Forbes award include Royal Bank of Scotland chief executive Fred Goodwin and former Vodafone boss Chris Gent.


US tobacco companies have welcomed an appeal court's decision to reject the government's 280bn ( 155bn) claim for alleged deceit about smoking dangers. Tobacco stocks rose sharply on Wall Street after the 2 1 decision. The court in Washington found the case filed by the Clinton administration in 1999 could not be brought under federal anti racketeering laws. Anti smoking groups urge the government to fight on, but the Justice Department has not said if it will appeal. Among the accused were Altria Group, RJ Reynolds Tobacco, Lorillard Tobacco, Liggett Group and Brown and Williamson. They were delighted by the decision, which sent Reynolds shares up 4.5% and Altria shares up 5.11%. Charles A Blixt, executive vice president of RJ Reynolds Tobacco, said the ruling "dramatically transforms" the government's lawsuit. Altria Group said, in a statement, the government now "must not only prove that the companies have engaged in fraudulent behaviour in the past, but that they are likely to do so in the future." The government had claimed tobacco firms manipulated nicotine levels to increase addiction targeted teenagers with multi billion dollar advertising campaigns lied about the dangers of smoking and ignored research to the contrary. Prosecutors wanted the cigarette firms to "disgorge" 280bn in profits accumulated over the past 50 years and impose tougher rules on marketing their products. They brought the case under racketeering laws, which were passed to deny mafia gangs the profits of their crimes. But the tobacco companies denied that they illegally conspired to promote smoking and defraud the public. They also said they had already met many of the government's demands in a landmark 206bn settlement reached with 46 states in 1998. The three judge panel in the District of Columbia's Court of Appeals ruled on Friday that the US government could not sue the firms under the anti racketeering laws. Judge David Sentelle, in his ruling, said such laws were aimed at putting an end to illegal conduct going forward. "We hold that the language of (the law) and the comprehensive remedial scheme of (the law) preclude disgorgement as a possible remedy in this case," he wrote. The Justice Department refused to say if it would appeal. "All we're saying today is that we have received the ruling and are reviewing it," a spokeswoman said on Friday. But William Corr of the Campaign for Tobacco Free Kids urged the government to continue pressing its case. "Today's ruling should not be an excuse for this administration to seek a weak settlement that lets the tobacco industry off the hook," he said.


Russia's renationalisation of its energy industry needs to be reversed, a senior government figure has warned. Economy minister German Gref told the Kommersant newspaper that direct state involvement in oil was "unjustified". His comments follow the sale of much of oil giant Yukos to cover back taxes a deal which effectively took most of the firm's assets into public ownership. On 28 December, another senior economic adviser called the sale "the swindle of the century". Yuganskneftegaz, the unit which produced 60% of Yukos' output, had been seized and sold in December for less than 10bn to a previously unknown firm called Baikal. Baikal promptly passed into the hands of state controlled firm Rosneft, itself shortly to merge with state gas giant Gazprom. "We used to see street hustlers do this kind of thing," Andrei Illarionov then economic adviser to President Vladimir Putin told a press conference. "Now officials are doing it." Within days, he was stripped of most of his responsibilities. Mr Gref, a well known opponent of nationalisation in competitive parts of the market, was keen to distance himself from Mr Iliaronov's comments. The privatisation of companies such as Yukos in the 1990s had been badly handled, he said. But he stressed that the government needed to get out of oil. "I think that Rosneft and Yuganskneftegaz, should it become a state owned company, must be privatized," he said. "Today our government is ineffective and state companies, as a result, are for the overwhelming part ineffective as well." And he warned that using back taxes to deal with firms like Yukos a technique now being applied by the Kremlin to several other firms was a mistake. "If we follow that logic, we should nationalise all businesses," he said. Many large Russian companies, particularly in the energy sector, use complex webs of offshore companies to avoid taxes. Mr Gref also poured cold water on President Putin's promises of doubled economic growth within a decade. The assault on Yukos' assets has been widely blamed for a slowdown in economic growth in recent months. "The task is not simply to double GDP; instead it is to use GDP to qualitatively improve people's lives," Mr Gref told Kommersant. "We don't need simply to increase GDP, but to improve its structure." Instead of focusing on headline growth figures, Russia needed to focus on better institutions, such as a more efficient and less corrupt court system.


Sri Lanka faces a 1.3bn ( 691m) bill in 2005 for reconstruction after the tsunami which killed more than 30,000 of its people, its central bank says. This estimate is preliminary, bank governor Sunil Mendis told reporters, and could rise in 2006. The island state is asking for about 320m from the International Monetary Fund to help pay for relief, he said. The bank has 5bn rupees ( 50m; 27m) set aside to lend at a lower interest rate to those who lost property. According to Mr Mendis, half the IMF support could come from a freeze on debt repayments, which would free up resources immediately. The rest could come from a five year emergency loan. Sri Lanka is hoping for a wider freeze from other creditors. The Paris Club of 19 creditors meets on 12 January to discuss a debt moratorium for the nations hit by the tsunami, which ravaged south and east Asia on 26 December. Some 150,000 people across the region are feared to be dead and millions have been left homeless and destitute. A full reckoning of the economic cost to Sri Lanka of the tsunami will not be clear for some time to come. But already it looks likely that growth in the first half of 2005 will slow, Mr Mendis told reporters, although he would not say by how much. One side effect of the disaster has been that the value of the rupee has risen as foreign funds have flooded into the country. The currency has strengthened 4% since late December, coming close to 100 rupees to the US dollar for the first time in more than six months.


Tony Blair should set out a proper exit strategy from Iraq in the wake of next Sunday's elections in the country, Lib Dem leader Charles Kennedy has said. In a speech focusing on issues arising from the re election of George W Bush, Mr Kennedy said Iraq had become a "crucible of militant terrorism". He wants to see a phased withdrawal of UK troops "as soon as the situation allows", he said in London. Any exit strategy must "augment and support" the democratic process. "There are some who are of the opinion that the mere presence of British and American troops in Iraq feeds the insurgency," he said. "There is some truth in that, especially after the initial mistakes that were made the heavy handedness of operations like Fallujah, and the well publicised instances of abuse at the hands of coalition forces." Mr Kennedy pointed out that the Netherlands, Portugal and the Czech Republic, which all have troops operating in the southern sector of Iraq, have announced their imminent withdrawal "regardless of the situation on the ground". He accused Mr Blair's government of "being less than straightforward" over its plans. "Next week the prime minister should make a statement regarding the elections in Iraq," Mr Kennedy said during his City of London speech. "He should set out a proper exit strategy, including the phased withdrawal of British troops, as the security situation allows." Mr Kennedy also argued that British troops deployed in Iraq should be replaced with forces from other countries "especially Islamic countries".