US will gain most from green aid for poor nations

The bank would offer financial incentives to developing countries to cut their greenhouse gas emissions and adopt "clean" technologies. But the move could provoke controversy since US companies, which are in the lead in this new industry, will benefit most from the bank's grants.

The proposal is designed partly to persuade the US President George Bush to sign up to a firmer than expected declaration on climate change. Yesterday, he accepted that "an increase in greenhouse gases caused by humans is contributing to the problem".

Gordon Brown, the Chancellor, disclosed the proposal last night, sayingthe bank would "bring together" the US, Europe and other nations for talks on tackling the problem. "I think the World Bank will put up the money for this," he said.

"We have got to look at alternative sources of energy, we have got to look at better and more efficient use of energy. We have got to take on board the scientific research and I think there has got to be money behind this so that we can actually persuade people to do things, particularly in the developing countries."

After arriving at Gleneagles, Tony Blair rejected calls by environmental groups for him to isolate President Bush over climate change rather than sign a watered-down deal.

He said: "If you don't get an agreement that includes America, you won't get an agreement that works. That is the blunt truth. I hope to be able to do this and bring people together. What we have got to have is a dialogue post-G8."

When the summit gets under way today, France and Germany will press for the communiqué to include a reference to urgency, that global warming is human-induced, that the Kyoto protocols are important and that carbon trading should be supported.

Mr Brown revealed that the draft communique to be issued tomorrow would double aid to Africa by 2010 - and put Britain at odds with other G8 members by saying that was not quick enough. He told the ITV programmme, Making Poverty History: "I hope it will be by 2008... I want it to happen earlier."

He said that his proposal to harness the capital markets, using the International Finance Facility, which is opposed by the US, would have enabled the aid to be paid "a lot quicker".

Mr Brown's hopes of securing an agreement to eliminate unfair farm subsidies by 2010 was dealt a blow yesterday when Peter Mandelson, the EU trade commissioner, dismissed the target as "not credible". Mr Mandelson doubted whetherG8 would set a timetable for cutting agricultural subsidies.

"Such a date may not be credible given that the more rapidly we remove subsidies on agriculture, the more it costs us to do so."

But he criticised French demands that the abolition of export subsidies within the Common Agricultural Policy be phased out over 10 years, which would mean that even if a global trade deal were signed in 2006, farm subsidies would not go until 2016.

Bush comes a cropper on his bicycle

President George Bush's pride, hands and bicycle were damaged in a collision with a police officer while cycling in the grounds of Gleneagles yesterday. President Bush, celebrating his 59th birthday, was riding at "pretty good speed", Scott McClellan, the White House press secretary, said. The collision with the policeman caused scrapes to the President's hands and arms that required bandaging. The policeman, who was from a Glasgow-area unit assigned to the G8, may have an ankle injury and was taken to a local hospital as a precaution.

Genevieve Roberts

Faith in politics at stake, warns Bono

Bono has warned G8 leaders they must strike a deal on aid to Africa during the summit or there could be more violence. After meeting Tony Blair and Gerhard Schröder, the German Chancellor, Bono said: "There is a lot at stake. Not just the lives in Africa but faith in the political process. We have seen millions of people out on the street. They feel part of a positive protest movement. The alternative you have also seen: smashed cars, smashed shopfronts, anger and rage. I would like to think our way is better but we don't know yet. We have a couple of days to find out."

Colin Brown