Jospin supports Tobin tax on financial dealings

Hopes that the world's richest nations will back controversial plans for a global tax on currency speculation rose yesterday after the Government gave a cautious welcome to French support for the idea.

Lionel Jospin, France's prime minister, said he would put forward proposals for the so-called "Tobin tax" at the next meeting of European finance ministers.

The move makes France the first member of the Group of Seven nations to support proposals for a tax on international financial transactions.

Mr Jospin said: "The Belgian presidency [of the European Union] plans to submit the question of the Tobin tax in the European framework. I support the idea that France proposes that the EU takes an initiative on this in international bodies."

He said money raised could be used in less economically-developed countries.

The move surprised analysts but pleased charities who have been campaigning for the measure, which was first proposed in the 1970s by James Tobin, winner of the Nobel prize and economics professor at Yale University.

A UK Treasury spokeswoman said the Government "sympathised" with arguments for delivering greater resources to tackle global poverty. "We are happy to look at ways of progressing this agenda without European colleagues," she said.

The move hasthe support of Clare Short, the International Development Secretary.