Donor conference on Iraq to be held despite UN impasse

Spain has pledged to host a donor conference for Iraq, despite persistent rumours of a postponement because of lack of progress on a UN resolution on control of the country.

With no sign of an agreement in New York over a text spelling out Iraq's political future, countries which opposed the war have privately questioned the point of a donors' meeting.

Asked if he wanted the conference postponed, the German Chancellor, Gerhard Schröder, one of those thought to favour a delay, said: "The Spanish government is the one to take a decision."

The Russian President, Vladimir Putin, said a UN resolution laying out a path for the Iraqi people to resume sovereignty was needed for there to be a successful conference. The meeting scheduled to take place in Madrid on 23 and 24 October.

"Iraq needs funds, but only on condition that all political matters are settled," said Mr Putin who, like the German Chancellor, opposed the war in Iraq. But in Madrid, a spokesman for Spanish Prime Minister Jose Maria Aznar said: "We don't have any news [of postponement] and are going ahead as planned."

At a meeting of EU ambassadors in Brussels yesterday, there was no call for a delay and diplomats continued their technical work on preparations.

EU foreign ministers are to discuss the issue at a meeting in Luxembourg next Monday at which point the scale of potential pledges should become clearer.

Some diplomats believe that, in the absence of a new UN resolution, the donor conference may simply reopen divisions on the Iraq.

But others saw the threat of postponement as an attempt to put more pressure on the US to agree to a resolution at the UN Security Council.

The European Commission says it wants to proceed with the meeting which, even without more firm cash pledges, could perform important work in considering a needs assessment and identifying spending priorities.

In New York, there was speculation that the Bush administration may abandon a resolution rather than yield to calls from Germany, France, Russia and the UN secretary general, Kofi Annan, to give the United Nations and Iraqis a bigger say.

The resolution is aimed at broadening financial and military support and pointing the way to the end of occupation, without giving a specific timetable.

But without it only a limited number of countries seem willing to commit themselves to firm pledges. Britain and Spain, both of whom backed the war and have forces in Iraq, are keen to see an increase in the European Commission's proposal to give €200m (£141m) in EU funds until the end of 2004. Senior diplomats are at present unwilling to put any estimate on the global amount that could be raised.