Today's papers

HOPES are rising that the Provisional IRA will call an extended autumn ceasefire the Observer reports. Senior Republican sources said they are 'extremely hopeful' about a ceasefire, aimed at improving direct contacts between the British Government and Sinn Fein.

Britain is preparing to abandon its long-standing opposition to arming the Bosnian Muslims. The move foreshadows a bloody escalation of the civil war in the former Yugoslavia and the withdrawal of British and other United Nations troops, according to the Sunday Telegraph.

The Sunday Mirror reports that a court has ordered Mark Thatcher to come clean about his business empire. Lady Thatcher's son will be forced to give video evidence about his worldwide dealings. Thatcher, 40, has been ordered to appear as a witness in the district court of Harris County, Texas on

31 August.

Britain's SAS and Parachute Regiment troops are to be taught to jump from planes by instructors from private firms. The Government has decided to save money by scrapping the RAF's Balloon Operations Squadron and put the job out to tender, the News of the World reports.

The Cabinet minister who must convince the Germans that British beef is safe has revealed that mad cow disease has hit his own dairy herd, says the Mail on Sunday. A dozen Friesian cows on new agriculture minister William Waldegrave's 1,000 acre estate have had to be destroyed.

Crash investigators are examining whether a mobile phone caused the worst disaster in British intelligence history. The Sunday Express claims that Boeing engineers have been cleared of blame for the crash on 2 June when an RAF Chinook crashed into a hill on the Mull of Kintyre.

Kenneth Clarke, the Chancellor, is to reject demands for a cut in the 25p basic rate of income tax in his November Budget, according to the Sunday Times. Mr Clarke and his advisors last week agreed that significant tax cuts this year would not be justified on economic or political grounds.

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