Campaigners on verge of stunning victory in battle for Africa debt deal

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A popular campaign which mobilised millions of people to demand that rich countries lift Africa out of debt, poverty and disease will score a stunning victory later today.

A popular campaign which mobilised millions of people to demand that rich countries lift Africa out of debt, poverty and disease will score a stunning victory later today.

At lunchtime, the Chancellor, Gordon Brown, will unveil a deal to slash billions of pounds of debt payments by some of the world's poorest countries.

The final terms of the deal were struck last night after last-minute negotiations between finance ministers from the G8 nations.

Mr Brown yesterday hailed the agreement as "the biggest debt settlement the world has ever seen" that would be worth more than $50bn (£25bn). "America, Britain, France, Germany, Japan, Canada and Italy have all come together with one proposal, that is comprehensive, in other words it involves dozens of countries," he said. He added that 18 countries would have their $40bn debt of wiped out immediately, saving them aid payments of $15bn over the next decade. That would be extended to a further nine countries in 12 to 18 months - taking the total to $51bn and a final 11 raising the total-write-off to $55bn.

"The uniqueness of this deal is that so much would be written off almost immediately - more than $40bn within a few weeks of the agreement," the Chancellor said.

But while the deal will be seen an astonishing success of the myriad of campaign groups and their supporters - and a face-saving exercise for politicians - it will leave many problems in Africa unsolved.

It still falls short of the ambitious targets set by Mr Brown and Tony Blair when they declared 2005 as the year for Africa. UK officials are hoping the deal will pave the way for progress towards a deal on aid and trade for Africa at next month's summit of the G8 at Gleneagles in Scotland

Campaign groups applauded the deal as a breakthrough but said there was still a huge amount of work to be done. Data, the group set up by U2's singer Bono, said that supporters of the anti-debt campaign around the world could claim credit for the deal.

Ollie Buston, its European director, said: "It shows campaigns around the world such as Make Poverty History and the One Campaign in America and Live8 have an effect.

"There's a sense we have a real momentum going forward to the G8 but this debt deal must be the first piece of a bigger deal on effective aid and real progress on trade justice."

The deal was struck between Mr Blair and President George Bush after the Prime Minister flew to Washington to secure a firm commitment before this weekend.

The US and Britain had adopted very different approaches but struck a compromise after days of negotiations in both capitals.

The US had wanted a write-off of the debt to be paid for by lower aid payments but the UK wanted a cancellation of interest.

Paul Wolfowitz, the new head of the World Bank, told The Independent: "I am hopeful that it will be debt relief that will bring additional resources and will not be at the expense of World Bank resources."

After securing agreement from Canada, Mr Brown set about securing agreement from the fellow G7 - G8 minus Russia - members France, Germany, Italy, and Japan to back their scheme last night.

France, Germany and Japan put forward a more limited proposal that would tie aid to fighting corruption, and which would help five countries. But one source said the UK would settle for nothing less than a blanket commitment to cancel debts.

Mr Brown said the US/UK proposal needed approval from all countries to ensure they made up for the shortfall in income for international institutions such as the World Bank.

He highlighted Malawi, where one in five people are HIV positive, that spends more on debt interest than health - and Zambia, where 40 per cent of women cannot read or write, but is spending more on debt interest than education.

There was no sign the UK had persuaded the US to support a plan to double aid to $100bn a year by borrowing money on capital markets.