Blair's deal with Bush is only the first stage, campaigners say

Aid agencies have given a cautious welcome to plans agreed by Britain and the United States to wipe out £8bn of debt owed by poor countries in Africa.

Bob Geldof, the Live8 concerts organiser, said he was encouraged by the outcome of the talks between George Bush and Tony Blair at the White House on Tuesday.

He said: "Blair went [to Washington] and there were lots of signals saying it was all a disaster but I think the US and UK have got an agreement on debt relief. With regard to doubling of aid, the Americans were never going to come that far, because the American economy is so bad."

A deal to eliminate 100 per cent of the debts of 25 poor countries is expected to be approved by finance ministers of the world's richest nations meeting in London tomorrow and Saturday. But campaigners say it would only be a first step towards a much bigger aid plan needed for Africa, which Mr Blair hopes will be approved at next month's G8 summit at Gleneagles.

Kevin Watkins, director of the United Nations human development report office, said: "On debt relief, it sounds encouraging, it seems there has been some progress. It's also good news that more aid has been announced for Africa, but all this stops an awful long way short of where we need to be."

Jamie Drummond, executive director of campaign group Data, said: "President Bush and Prime Minister Blair underlined significant progress on debt and strong momentum toward a bigger and better debt-aid-trade deal to make poverty history at the Gleneagles G8 summit. A final debt deal is inches away and will see these countries save hundreds of millions of dollars which they can put into lifesaving programmes to fight Aids and extreme poverty."

Mr Blair's spokesman welcomed President Bush's important pledge to provide additional funds for the World Bank and International Monetary Fund to ensure the debt write-offs would not cut future aid budgets. "We are not there yet, but what yesterday confirmed was our belief that the ambitions we have set for Gleneagles can still be realised and that, as President Bush said, the US is determined to take a lead," he said.

In the Commons, the Prime Minister won praise from Michael Howard for persuading President Bush to back the debt-relief plan. But the Tory leader added: "The best way of helping developing countries would be to get rid of the barriers which both the US and the EU place in the way of trading opportunities." He said US cotton subsidies had a harmful effect on west and central Africa, while the US Farm Act, which gave an unfair advantage to American farmers, and EU export subsidies for agricultural goods both helped to impoverish developing countries.

Mr Blair said he raised all these issues in Washington, and that trade would form a very important part of a G8 package that would also cover aid, debt, peace-keeping and enforcement, conflict resolution, the main killer diseases, governance and action against corruption.