Yukos unit buyer faces loan claim

The owners of embattled Russian oil giant Yukos are to ask the buyer of its former production unit to pay back a $900m (£479m) loan.

State-owned Rosneft bought the Yugansk unit for $9.3bn in a sale forced by Russia to part settle a $27.5bn tax claim against Yukos. Yukos' owner Menatep Group says it will ask Rosneft to repay a loan that Yugansk had secured on its assets. Rosneft already faces a similar $540m repayment demand from foreign banks. Legal experts said Rosneft's purchase of Yugansk would include such obligations. "The pledged assets are with Rosneft, so it will have to pay real money to the creditors to avoid seizure of Yugansk assets," said Moscow-based US lawyer Jamie Firestone, who is not connected to the case. Menatep Group's managing director Tim Osborne told the Reuters news agency: "If they default, we will fight them where the rule of law exists under the international arbitration clauses of the credit."

Rosneft officials were unavailable for comment. But the company has said it intends to take action against Menatep to recover some of the tax claims and debts owed by Yugansk. Yukos had filed for bankruptcy protection in a US court in an attempt to prevent the forced sale of its main production arm. The sale went ahead in December and Yugansk was sold to a little-known shell company which in turn was bought by Rosneft. Yukos claims its downfall was punishment for the political ambitions of its founder Mikhail Khodorkovsky and has vowed to sue any participant in the sale.
Pernod takeover talk lifts Domecq

Shares in UK drinks and food firm Allied Domecq have risen on speculation that it could be the target of a takeover by France's Pernod Ricard.

Reports in the Wall Street Journal and the Financial Times suggested that the French spirits firm is considering a bid, but has yet to contact its target. Allied Domecq shares in London rose 4% by 1200 GMT, while Pernod shares in Paris slipped 1.2%. Pernod said it was seeking acquisitions but refused to comment on specifics.

Pernod's last major purchase was a third of US giant Seagram in 2000, the move which propelled it into the global top three of drinks firms. The other two-thirds of Seagram was bought by market leader Diageo. In terms of market value, Pernod - at 7.5bn euros ($9.7bn) - is about 9% smaller than Allied Domecq, which has a capitalisation of £5.7bn ($10.7bn; 8.2bn euros). Last year Pernod tried to buy Glenmorangie, one of Scotland's premier whisky firms, but lost out to luxury goods firm LVMH. Pernod is home to brands including Chivas Regal Scotch whisky, Havana Club rum and Jacob's Creek wine. Allied Domecq's big names include Malibu rum, Courvoisier brandy, Stolichnaya vodka and Ballantine's whisky - as well as snack food chains such as Dunkin' Donuts and Baskin-Robbins ice cream. The WSJ said that the two were ripe for consolidation, having each dealt with problematic parts of their portfolio. Pernod has reduced the debt it took on to fund the Seagram purchase to just 1.8bn euros, while Allied has improved the performance of its fast-food chains.
Japan narrowly escapes recession

Japan's economy teetered on the brink of a technical recession in the three months to September, figures show.

Revised figures indicated growth of just 0.1% - and a similar-sized contraction in the previous quarter. On an annual basis, the data suggests annual growth of just 0.2%, suggesting a much more hesitant recovery than had previously been thought. A common technical definition of a recession is two successive quarters of negative growth.

The government was keen to play down the worrying implications of the data. "I maintain the view that Japan's economy remains in a minor adjustment phase in an upward climb, and we will monitor developments carefully," said economy minister Heizo Takenaka. But in the face of the strengthening yen making exports less competitive and indications of weakening economic conditions ahead, observers were less sanguine. "It's painting a picture of a recovery... much patchier than previously thought," said Paul Sheard, economist at Lehman Brothers in Tokyo. Improvements in the job market apparently have yet to feed through to domestic demand, with private consumption up just 0.2% in the third quarter.
Jobs growth still slow in the US

The US created fewer jobs than expected in January, but a fall in jobseekers pushed the unemployment rate to its lowest level in three years.

According to Labor Department figures, US firms added only 146,000 jobs in January. The gain in non-farm payrolls was below market expectations of 190,000 new jobs. Nevertheless it was enough to push down the unemployment rate to 5.2%, its lowest level since September 2001. The job gains mean that President Bush can celebrate - albeit by a very fine margin - a net growth in jobs in the US economy in his first term in office. He presided over a net fall in jobs up to last November's Presidential election - the first President to do so since Herbert Hoover. As a result, job creation became a key issue in last year's election. However, when adding December and January's figures, the administration's first term jobs record ended in positive territory.

The Labor Department also said it had revised down the jobs gains in December 2004, from 157,000 to 133,000.

Analysts said the growth in new jobs was not as strong as could be expected given the favourable economic conditions. "It suggests that employment is continuing to expand at a moderate pace," said Rick Egelton, deputy chief economist at BMO Financial Group. "We are not getting the boost to employment that we would have got given the low value of the dollar and the still relatively low interest rate environment." "The economy is producing a moderate but not a satisfying amount of job growth," said Ken Mayland, president of ClearView Economics. "That means there are a limited number of new opportunities for workers."
India calls for fair trade rules

India, which attends the G7 meeting of seven leading industrialised nations on Friday, is unlikely to be cowed by its newcomer status.

In London on Thursday ahead of the meeting, India's finance minister, lashed out at the restrictive trade policies of the G7 nations. He objected to subsidies on agriculture that make it hard for developing nations like India to compete. He also called for reform of the United Nations, the World Bank and the IMF.

Palaniappan Chidambaram, India's finance minister, argued that these organisations need to take into account the changing world order, given India and China's integration into the global economy. He said the issue is not globalisation but "the terms of engagement in globalisation." Mr Chidambaram is attending the G7 meeting as part of the G20 group of nations, which account for two thirds of the world's population. At a conference on developing enterprise hosted by UK finance minister Gordon Brown on Friday, he said that he was in favour of floating exchange rates because they help countries cope with economic shocks. "A flexible exchange rate is one more channel for absorbing both positive and negative shocks," he told the conference. India, along with China, Brazil, South Africa and Russia, has been invited to take part in the G7 meeting taking place in London on Friday and Saturday. China is expected to face renewed pressure to abandon its fixed exchange rate, which G7 nations, in particular the US, have blamed for a surge in cheap Chinese exports. "Some countries have tried to use fixed exchange rates. I do not wish to make any judgements," Mr Chidambaram said. Separately, the IMF warned on Thursday that India's budget deficit was too large and would hamper the country's economic growth, which it forecast to be around 6.5% in the year to March 2005. In the year to March 2004, the Indian economy grew by 8.5%.
Ethiopia's crop production up 24%

Ethiopia produced 14.27 million tonnes of crops in 2004, 24% higher than in 2003 and 21% more than the average of the past five years, a report says.

In 2003, crop production totalled 11.49 million tonnes, the joint report from the Food and Agriculture Organisation and the World Food Programme said. Good rains, increased use of fertilizers and improved seeds contributed to the rise in production. Nevertheless, 2.2 million Ethiopians will still need emergency assistance.

The report calculated emergency food requirements for 2005 to be 387,500 tonnes. On top of that, 89,000 tonnes of fortified blended food and vegetable oil for "targeted supplementary food distributions for a survival programme for children under five and pregnant and lactating women" will be needed.

In eastern and southern Ethiopia, a prolonged drought has killed crops and drained wells. Last year, a total of 965,000 tonnes of food assistance was needed to help seven million Ethiopians. The Food and Agriculture Organisation (FAO) recommend that the food assistance is bought locally. "Local purchase of cereals for food assistance programmes is recommended as far as possible, so as to assist domestic markets and farmers," said Henri Josserand, chief of FAO's Global Information and Early Warning System. Agriculture is the main economic activity in Ethiopia, representing 45% of gross domestic product. About 80% of Ethiopians depend directly or indirectly on agriculture.
Court rejects $280bn tobacco case

A US government claim accusing the country's biggest tobacco companies of covering up the effects of smoking has been thrown out by an appeal court.

The demand for $280bn (£155bn) - filed by the Clinton administration in 1999 - was rejected in a 2-1 decision. The court in Washington found that the case could not be brought under federal anti-racketeering laws. Among the accused were Altria Group, RJ Reynolds Tobacco, Lorillard Tobacco, Liggett Group and Brown and Williamson. In its case, the government claimed tobacco firms manipulated nicotine levels to increase addiction, targeted teenagers with multi-billion dollar advertising campaigns, lied about the dangers of smoking and ignored research to the contrary.

Prosecutors wanted the cigarette firms to surrender $280bn in profits accumulated over the past 50 years and impose tougher rules on marketing their products. But the Court of Appeals for the District of Columbia ruled that the US government could not sue the firms under legislation drawn up to counteract Mafia infiltration of business. The tobacco companies deny that they illegally conspired to promote smoking and defraud the public. They also say they have already met many of the government's demands in a landmark $206bn settlement reached with 46 states in 1998. Shares of tobacco companies closed higher after the ruling, with Altria rising 5% and Reynolds showing gains of 4.5%.
Ask Jeeves tips online ad revival

Ask Jeeves has become the third leading online search firm this week to thank a revival in internet advertising for improving fortunes.

The firm's revenue nearly tripled in the fourth quarter of 2004, exceeding $86m (£46m). Ask Jeeves, once among the best-known names on the web, is now a relatively modest player. Its $17m profit for the quarter was dwarfed by the $204m announced by rival Google earlier in the week. During the same quarter, Yahoo earned $187m, again tipping a resurgence in online advertising.

The trend has taken hold relatively quickly. Late last year, marketing company Doubleclick, one of the leading providers of online advertising, warned that some or all of its business would have to be put up for sale. But on Thursday, it announced that a sharp turnaround had brought about an unexpected increase in profits. Neither Ask Jeeves nor Doubleclick thrilled investors with their profit news, however. In both cases, their shares fell by some 4%. Analysts attributed the falls to excessive expectations in some quarters, fuelled by the dramatic outperformance of Google on Tuesday.
Indonesians face fuel price rise

Indonesia's government has confirmed it is considering raising fuel prices by as much as 30%.

Millions of Indonesians use kerosene for basic cooking, and prices have been heavily subsidised for years. President Susilo Bambang Yudhoyono's government has said it wants to curb fuel subsidies and direct the money into aid programmes for the poor. But critics argue cutting subsidies will hurt the poorer families that his government says it wants to help. Millions of people were left homeless in Indonesia Aceh's region following the earthquake and tsunami disaster in late December.

Indonesia pays subsidies to importers in order to stabilise domestic fuel prices, but higher oil prices have forced the government to spend more on holding prices down. It spent 59.2 trillion rupiah ($6.58bn; £3.5bn) on fuel subsidies in 2004, a sum far in excess of its original projection of 14.5 trillion rupiah. Since President Yudhoyono's government came to power in October, it has indicated its intention of raising domestic fuel prices by cutting subsidies. "The (January to March) quarter of this year is the best time for us to increase fuel prices," said Sri Mulyani Indrawati, State Minister for National Development Planning. "We are still considering if a 30% hike is suitable at the moment. The sooner the better for the state budget." The BBC's correspondent in Jakarta, Rachel Harvey, told World Business Report that there was likely to be a strong public reaction to any price rise. "The big question is whether they go for one big, short, sharp shock and raise prices between 20% and 30% or whether they try to stagger it," she said. Indonesia's previous government, led by President Megawati Sukarnoputri, also attempted to cut subsidies in 2003, but was forced to back down in the face of public protests.
Peugeot deal boosts Mitsubishi

Struggling Japanese car maker Mitsubishi Motors has struck a deal to supply French car maker Peugeot with 30,000 sports utility vehicles (SUV).

The two firms signed a Memorandum of Understanding, and say they expect to seal a final agreement by Spring 2005. The alliance comes as a badly-needed boost for loss-making Mitsubishi, after several profit warnings and poor sales. The SUVs will be built in Japan using Peugeot's diesel engines and sold mainly in the European market. Falling sales have left Mitsubishi Motors with underused capacity, and the production deal with Peugeot gives it a chance to utilise some of it.

In January, Mitsubishi Motors issued its third profits warning in nine months, and cut its sales forecasts for the year to March 2005. Its sales have slid 41% in the past year, catalysed by the revelation that the company had systematically been hiding records of faults and then secretly repairing vehicles. As a result, the Japanese car maker has sought a series of financial bailouts. Last month it said it was looking for a further 540bn yen ($5.2bn; £2.77bn) in fresh financial backing, half of it from other companies in the Mitsubishi group. US-German carmaker DaimlerChrylser, a 30% shareholder in Mitsubishi Motors, decided in April 2004 not to pump in any more money. The deal with Peugeot was celebrated by Mitsubishi's newly-appointed chief executive Takashi Nishioka, who took over after three top bosses stood down last month to shoulder responsibility for the firm's troubles. Mitsubishi Motors has forecast a net loss of 472bn yen in its current financial year to March 2005. Last month, it signed a production agreement with Japanese rival Nissan Motor to supply it with 36,000 small cars for sale in Japan. It has been making cars for Nissan since 2003.
China keeps tight rein on credit

China's efforts to stop the economy from overheating by clamping down on credit will continue into 2005, state media report.

The curbs were introduced earlier this year to ward off the risk that rapid expansion might lead to soaring prices. There were also fears that too much stress might be placed on the fragile banking system. Growth in China remains at a breakneck 9.1%, and corporate investment is growing at more than 25% a year. The breakneck pace of economic expansion has kept growth above 9% for more than a year. Rapid tooling-up of China's manufacturing sector means a massive demand for energy - one of the factors which has kept world oil prices sky-high for most of this year. In theory, the government has a 7% growth target, but continues to insist that the overshoot does not mean a "hard landing" in the shape of an overbalancing economy. A low exchange rate - China's yuan is pegged to a rate of 8.28 to the dollar, which seems to be in relentless decline - means Chinese exports are cheap on world markets. China has thus far resisted international pressure to break the link or at least to shift the level of its peg. To some extent, the credit controls do seem to be taking effect. Industrial output grew 15.7% in the year to October, down from 23% in February, and inflation slowed to 4.3% - although retail sales are still booming.
Parmalat boasts doubled profits

Parmalat, the Italian food group at the centre of one of Europe's most painful corporate scandals, has reported a doubling in profit.

Its pre-tax earnings in the fourth quarter were 77m euros (£53m; $100m), up from 38m in the same period of 2003. Less welcome was the news that the firm had been fined 11m euros for having violated takeover rules five years ago. The firm sought bankruptcy protection in December 2003 after disclosing a 4bn-euro hole in its accounts. Overall, the company's debt is close to 12bn euros, and is falling only slowly. Its brands, well-known in Italy and overseas, have continued to perform strongly, however, and have barely lost revenue since the scandal broke.

But a crucial factor for the company's future is the legal unwinding of its intensely complex financial position. On Tuesday, the company's administrator, turnaround expert Enrico Bondi, sued Morgan Stanley, its former banker, to return 136m euros relating to a 2003 bond deal. That brought to 49 the number of banks that Mr Bondi has sued, a mass of legal action that could bring in as much as 3bn euros. The company has also sued former auditors and financial advisors for damages. And criminal cases against the company's former management are proceeding separately.
India's rupee hits five-year high

India's rupee has hit a five-year high after Standard & Poor's (S&P) raised the country's foreign currency rating.

The rupee climbed to 43.305 per US dollar on Thursday, up from a close of 43.41. The currency has gained almost 1% in the past three sessions. S&P, which rates borrowers' creditworthiness, lifted India's rating by one notch to 'BB+'. With Indian assets now seen as less of a gamble, more cash is expected to flow into its markets, buoying the rupee.

"The upgrade is positive and basically people will use it as an excuse to come back to India," said Bhanu Baweja, a strategist at UBS. "Money has moved out from India in the first two or three weeks of January into other markets like Korea and Thailand and this upgrade should lead to a reversal." India's foreign currency rating is now one notch below investment grade, which starts at 'BBB-'. The increase has put it on the same level as Romania, Egypt and El Salvador, and one level below Russia.
India widens access to telecoms

India has raised the limit for foreign direct investment in telecoms companies from 49% to 74%.

Communications Minister Dayanidhi Maran said that there is a need to fund the fast-growing mobile market. The government hopes to increase the number of mobile users from 95 million to between 200 and 250 million by 2007. "We need at least $20bn (£10.6bn) in investment and part of this has to come as foreign direct investment," said Mr Maran. The decision to raise the limit for foreign investors faced considerable opposition from the communist parties, which give crucial support to the coalition headed by Prime Minister Manmohan Singh. Potential foreign investors will however need government approval before they increase their stake beyond 49%, Mr Maran said. Key positions, such as those of chief executive, chief technology officer and chief financial officer are to be held by Indians, he added.

Analysts and investors have welcomed the government decision. "It is a positive development for carriers and the investment community, looking to take a longer-term view of the huge growth in the Indian telecoms market," said Gartner's principal analyst Kobita Desai. "The FDI relaxation coupled with rapid local market growth could really ignite interest in the Indian telecommunication industry," added Ernst and Young's Sanjay Mehta. Investment bank Morgan Stanley has forecast that India's mobile market is likely to grow by about 40% a year until 2007. The Indian mobile market is currently dominated by four companies, Bharti Televentures which has allied itself with Singapore Telecom, Essar which is linked with Hong Kong-based Hutchison Whampoa, the Sterling group and the Tata group.
Sluggish economy hits German jobs

The number of people out of work in Europe's largest economy has risen for the tenth straight month as growth remains stubbornly slow.

German unemployment rose 7,000 in November to 4.464 million people, or 10.8% of the workforce. The seasonally adjusted rise showed a smaller rise than expected, as government measures to encourage job creation began to take effect. But officials said stagnant growth was still stifling the job market. "There are clear signs of a revival in domestic demand," said Frank-Juergen Weise, head of the Federal Labour Agency, in a statement. "But growth of 0.1%... in the third quarter is still insufficient to deliver positive momentum to the labour market." High oil prices and the soaring euro - which damages the competitiveness of exporters - were also having a negative effect, he said. The brunt of the unemployment is still being felt in the eastern part of Germany, where the rate is 18.8%.

With unemployment stuck above 4 million for years, the government of Chancellor Gerhard Schroeder has put job creation at the top of the agenda. A controversial package of measures to shake up incentives to get back to work, paid for by cutting some cherished benefits, has sparked anger among some German workers. Strikes in a number of industries, notably among the country's iconic carmakers, have demonstrated the displeasure - as well as fears about further job losses as outsourcing takes hold. Among the new initiatives are the so-called "one-euro jobs" which top up unemployment benefit. The scheme's formal launch is January, but hirings for these positions are already taking place and affecting the unemployment statistics, economists said. "The deterioration of the labour market does not come as a surprise," said Isabelle Kronawitter at Hypovereinsbank. "Job creation measures probably prevented a stronger increase in the seasonally adjusted numbers."
Mixed signals from French economy

The French economy picked up speed at the end of 2004, official figures show - but still looks set to have fallen short of the government's hopes.

According to state statistics body INSEE, growth for the three months to December was a seasonally-adjusted 0.7-0.8%, ahead of the 0.6% forecast. If confirmed, that would be the best quarterly showing since early 2002. It leaves GDP up 2.3% for the full year, but short of the 2.5% which the French government had predicted.

Despite the apparent shortfall in annual economic growth, the good quarterly figures - a so-called "flash estimate" - mark a continuing trend of improving indicators for the health of the French economy. The government is reiterating a 2.5% target for 2005, while the European Central Bank is making positive noises for the 12-nation eurozone as a whole. Also on Friday, France's industrial output for December was released, showing 0.7% growth. "The numbers are good," said David Naude, economist at Deutsche Bank. "They send a positive signal of a rebound in output... and open the way for a continuation in that trend into the New Year." Service sector activity improved in January, hitting a seven-month high. But unemployment remains high at about 10%.
US trade gap hits record in 2004

The gap between US exports and imports hit an all-time high of $671.7bn (£484bn) in 2004, latest figures show.

The Commerce Department said the trade deficit for all of last year was 24.4% above the previous record - 2003's imbalance of $496.5bn. The deficit with China, up 30.5% at $162bn, was the largest ever recorded with a single country. However, on a monthly basis the US trade gap narrowed by 4.9% in December to £56.4bn. The US consumer's appetite for all things from oil to imported cars, and even wine and cheese, reached record levels last year and the figures are likely to spark fresh criticism of President Bush's economic policies.

Democrats claim the administration has not done enough to clamp down on unfair foreign trade practices. For example, they believe China's currency policy - which US manufacturers claim has undervalued the yuan by as much as 40% - has given China's rapidly expanding economy an unfair advantage against US competitors.

Meanwhile, the Bush administration argues that the US deficit reflects the fact the America is growing at faster rate than the rest of the world, spurring on more demand for imported goods. Some economists say this may allow an upward revision of US economic growth in the fourth quarter. But others point out that the deficit has reached such astronomical proportions that foreigners many choose not to hold as many dollar-denominated assets, which may in turn harm growth. For all of 2004, US exports rose 12.3% to $1.15 trillion, but imports rose even faster by 16.3% to a new record of $1.76 trillion. Foreign oil exports surged by 35.7% to a record $180.7bn, reflecting the rally in global oil prices and increasing domestic demand. Imports were not affected by the dollar's weakness last year. "We expect the deficit to continue to widen in 2005 even if the dollar gets back to its downward trend," said economist Marie-Pierre Ripert at IXIS.
Safety alert as GM recalls cars

The world's biggest carmaker General Motors (GM) is recalling nearly 200,000 vehicles in the US on safety grounds, according to federal regulators.

The National Highway Traffic Safety Administration (NHTSA) said the largest recall involves 155,465 pickups, vans and sports utility vehicles (SUVs). This is because of possible malfunctions with the braking systems. The affected vehicles in the product recall are from the 2004 and 2005 model years, GM said. Those vehicles with potential faults are the Chevrolet Avalanche, Express, Kodiak, Silverade and Suburban; the GMC Savana, Sierra and Yukon.

The NHTSA said a pressure accumulator in the braking system could crack during normal driving and fragments could injure people if the hood was open. This could allow hydraulic fluid to leak, which could make it harder to brake or steer and could cause a crash, it warned. GM is also recalling 19,924 Cadillac XLR coupes, SRX SUVs and Pontiac Grand Prix sedans from the 2004 model year. This is because the accelerator pedal may not work properly in extremely cold temperatures, requiring more braking. In addition, the car giant is calling back 17,815 Buick Raniers, Chevrolet Trailblazers, GMC Envoys and Isuzu Ascenders from the 2005 model years because the windshield is not properly fitted and could fall out in a crash. However, GM stressed that it did not know of any injuries related to the problems. News of the recall follows an announcement last month that GM expects earnings this year be lower than in 2004. The world's biggest car maker is grappling with losses in its European business, weak US sales and now a product recall. In January, GM said higher healthcare costs in North America, and lower profits at its financial services subsidiary would hurt its performance in 2005.
Steel firm 'to cut' 45,000 jobs

Mittal Steel, one of the world's largest steel producers, could cut up to 45,000 jobs over the next five years, its chief executive has said.

The Netherlands-based company is due to complete its $4.5bn acquisition of US firm ISG next month, making it one of the largest global firms of its kind. However, Lakshmi Mittal has told investors the combined company will have to shed thousands of jobs. The Indian-born magnate did not say where the job losses would fall.

Mr Mittal told US investors that once the acquisition of International Steel Group was completed, the company would aim to reduce its workforce by between 7,000 and 8,000 annually. This could see its workforce trimmed from 155,000 to 110,000 staff by 2010. "We are investing in modernisation so employees will go down," Mr Mittal told the conference in Chicago.

Mittal Steel was formed last year when Mr Mittal's LNM Holdings merged with Dutch firm Ispat. A combination of Mittal Steel and ISG would have annual sales of $32bn (£16.7bn; 24.1bn euros) and a production capacity of 70 million tonnes.

A Mittal Steel spokeman said that no decisions on job cuts have been made yet. "We are trying to create a sustainable steel industry and if we want to do that, we have to invest in new technology," a spokesman said. Mittal Steel has operations in 14 countries. Many of its businesses - particularly those in eastern Europe - were previously state owned and have huge workforces. It employs 50,000 staff in Kazakhstan alone, and has large operations in Romania, the Czech Republic, South Africa and the United States.
Strong demand triggers oil rally

Crude oil prices surged back above the $47 a barrel mark on Thursday after an energy market watchdog raised its forecasts for global demand.

The International Energy Agency (IEA) warned demand for Opec's crude in the first quarter would outstrip supply. The IEA raised its estimate of 2005 oil demand growth by 80,000 barrels a day to 84 million barrels a day. US light crude rose $1.64 to $47.10, while Brent crude in London gained $1.32 to $44.45.

The Paris-based IEA watchdog, which advises industrialized nations on energy policy, said the upward revision was due to stronger demand from China and other Asian countries. The fresh rally in crude prices followed gains on Wednesday which were triggered by large falls in US crude supplies following a cold spell in North America in January. The US Department of Energy reported that crude stockpiles had fallen 1m barrels to 294.3m. On top of that, ongoing problems for beleaguered Russian oil giant Yukos have also prompted the IEA to revise its output estimates from Russia - a major non-Opec supplier. "I think that prices are now beginning to set a new range and it looks like the $40 to $50 level," said energy analyst Orin Middleton of Barclays Capital.
Irish markets reach all-time high

Irish shares have risen to a record high, with investors persuaded to buy into the market by low inflation and strong growth forecasts.

The ISEQ index of leading shares closed up 23 points to 6661.89 on Thursday, fuelled by strong growth in banking and financial stocks. A fall in the rate of inflation to 2.3% in January gave a fresh boost to shares which have advanced 4% this month. The economy is set for strong growth in 2005 while interest rates remain low.

Several of Ireland's biggest companies saw their market value hit recent highs on Thursday. Allied Irish Banks, Ireland's biggest company by capitalisation, touched a five year peak while Bank of Ireland shares rose to their highest level since August 2002.

Telecoms firm Eircom, which recently revealed that it would re-enter the Irish mobile phone market, hit a yearly high. Analysts said that economic conditions were benign and Irish shares were still trading at a discount to other European markets. "Ireland ticks all the boxes as far as international investors are concerned," Roy Asher, chief investment officer of Hibernian Investment Managers, told Reuters. "Buoyant economic conditions are set to continue in Ireland over the next few years and Irish equities continue to offer quality growth at a reasonable valuation."

Bernard McAlinden, head of equity research at NCB Stockbrokers, said equities represented good value compared to other investments. "It is still looking good," he told Reuters. "We have seen good economic data on Ireland which benefits the financial stocks." Ireland's economic 'miracle' is enjoying a second wind, with 5% growth forecast for 2005 and 2006. The economy cooled markedly between 2001 and 2003 after enjoying spectacular growth of more than 10% in 2000. However, it has bounced back strongly with growth of just under 5% expected in 2004.
Japanese banking battle at an end

Japan's Sumitomo Mitsui Financial has withdrawn its takeover offer for rival bank UFJ Holdings, enabling the latter to merge with Mitsubishi Tokyo.

Sumitomo bosses told counterparts at UFJ of its decision on Friday, clearing the way for it to conclude a 3 trillion yen ($29bn) deal with Mitsubishi. The deal would create the world's biggest bank with assets of about 189 trillion yen ($1.8 trillion). Sumitomo's exit ends the most high profile fight in Japanese bank history.

UFJ Holdings, Japan's fourth-largest bank, has been at the centre of a fierce bid battle over the last year. Sumitomo, Japan's third-largest bank, tabled a higher offer for UFJ than its rival, valuing the company at $35bn.

However, UFJ's management was known to prefer the offer from Mitsubishi Tokyo Financial Group (MTFG), Japan's second-largest bank. Concerns were also raised about Sumitomo's ability to absorb UFJ and the former has now admitted defeat. "We believe the market and most investors accept a UFJ-MTFG merger," Sumitomo said in a statement. "Given the ongoing integration of UFJ and MTFG operations, persisting with our proposal may not be in the best interests of our shareholders or UFJ's."

Mitsubishi's takeover of UFJ - which will be Japan's largest-ever takeover deal - will still have to be approved by shareholders of the two firms. However, this is expected to be a formality. Sumitomo may now turn its attention to deepening its ties with Daiwa Securities, another Japanese financial firm. The two are set to merge their venture capital operations and there has been speculation that this could lead to a full-blown merger. Japanese banks are increasingly seeking alliances to boost profits.
Rich grab half Colombia poor fund

Half of the money put aside by the Colombian government to help the country's poor is benefiting people who do not need it, a study has found.

A total of 24.2 trillion pesos ($10.2bn; £5.5bn) is earmarked for subsidies for the poor, the government department for planning said. But it also found 12.1 trillion pesos was going to the richest part of the population, rather than to those in need. Sound distribution of the cash could cut poverty levels to 36% from 53%, the government believes. "Resources are more than enough to reduce poverty and there is no need for more tax reforms but a better distribution," deputy planning director Jose Leibovich said.

Colombia has a population of about 44 million and half lives below poverty line. However, some large properties are paying less in tax as they are situated inside poor areas, which benefit from cheaper utilities such as electricity and water, government research found. Government expenditure in areas such as pensions, public services, education, property and health should be revised, Mr Leibovich said. He added that the government is now examining the report, but warned there would be no easy solution to the problem. With a good distribution of such subsidies and economic growth of just 2%, by 2019 poverty could fall as low as 15.3%, he said.
Rover deal 'may cost 2,000 jobs'

Some 2,000 jobs at MG Rover's Midlands plant may be cut if investment in the firm by a Chinese car maker goes ahead, the Financial Times has reported.

Shanghai Automotive Industry Corp plans to shift production of the Rover 25 to China and export it to the UK, sources close to the negotiations tell the FT. But Rover told BBC News that reports of job cuts were "speculation". A tie-up, seen as Rover's last chance to save its Longbridge plant, has been pushed by UK Chancellor Gordon Brown. Rover confirmed the tie-up would take place "not very far away from this time".

Rover bosses have said they are "confident" the £1bn ($1.9bn) investment deal would be signed in March or early April.

Transport & General Worker's Union general secretary Tony Woodley repeated his view on Friday that all mergers led to some job cuts. He said investment in new models was needed to ensure the future of the Birmingham plant. "This is a very crucial and delicate time and our efforts are targeted to securing new models for the company which will mean jobs for our people," he said. SAIC says none of its money will be paid to the four owners of Rover, who have been accused by unions of awarding themselves exorbitant salaries, the FT reports. "SAIC is extremely concerned to ensure that its money is used to invest in the business rather than be distributed to the shareholders," the newspaper quotes a source close to the Chinese firm. Meanwhile, according to Chinese state press reports, small state-owned carmaker Nanjing Auto is in negotiations with Rover and SAIC to take a 20% stake in the joint venture. SAIC was unavailable for comment on the job cuts when contacted by BBC News. Rover and SAIC signed a technology-sharing agreement in August.
Ad firm WPP's profits surge 15%

UK advertising giant WPP has posted larger-than-expected annual profits and predicted that it will outperform the market in 2005.

Pre-tax profits rose 15% from a year ago to reach £546m ($1.04bn), ahead of average analysts' forecasts of £532m. Revenues were £4.3bn while the firm's operating margins were 14.1%, which it said could reach 14.8% by 2006. During the year WPP bought US rival Grey Global, creating a giant big enough to rival sector leader Omnicom.

Chief Executive Martin Sorrell on Friday told Reuters news agency that WPP had submitted a proposal for United Business Media's NOP World market research unit. Analysts say the unit sell could sell for up to £350m. WPP in recent years has also bought firms such as Ogilvy & Mather and Cordiant Communications. It also includes the firms Young & Rubicam and J Walter Thompson. Events such as the Olympics helped boost WPP's profits in 2004. The company said the US Congressional elections and the FIFA World Cup are likely to present advertising opportunities in the near future. The long-term outlook looks "very favourable" because of media and technology developments and the strength of the US economy, WPP said.
Deutsche Telekom sees mobile gain

German telecoms firm Deutsche Telekom saw strong fourth quarter profits on the back of upbeat US mobile earnings and better-than-expected asset sales.

Net profit came in at 1.4bn euros (£960m; $1.85bn), a dramatic change from the loss of 364m euros in 2003. Sales rose 2.8% to 14.96bn euros. Sales of stakes in firms including Russia's OAO Mobile Telesystems raised 1.17bn euros. This was more than expected and helped to bring debt down to 35.8bn euros.

A year ago, debt was more than 11bn euros higher. T-Mobile USA, the company's American mobile business, made a strong contribution to profits. "It's a seminal achievement that they cut debt so low. That gives them some head room to invest in growth now," said Hannes Wittig, telecoms analyst at Dresdner Kleinwort Wasserstein. The company also said it would resume paying a dividend, after two years in which it focused on cutting debt.
Chinese wine tempts Italy's Illva

Italy's Illva Saronno has agreed to buy 33% of Changyu, the largest wine maker in China.

Changyu said in a statement to the Shenzhen stock exchange that Illva will pay 481.42m yuan ($58.16m; £30.7m), once the government approves the deal. The Italian liqueur maker will acquire the shares from the Yantai State Asset Management Bureau. Chinese wine sales are growing, the US Agriculture Department said, with wine sales in 2003 up 25% at 61.1bn yuan.

China is encouraging state-owned companies to sell shares to foreign investors. Anheuser-Busch, Heineken and Scottish & Newcastle have all invested in the Chinese beer industry in the last two years and now Illva Saronno is betting on the Chinese wine market. Yantai State Asset Management Bureau - a government agency in the north-eastern city of Yantai - owns 55% of Changyu. The state agency will also sell 10% of its stake in Changyu to another overseas company, although it didn't say who. The remaining 12% will be retained by the Yantai city government. The consumption of wine in China is still low, at just 0.22 litres per capita, said the US Agriculture Department. This compares with 59 litres in France, 12 litres in the US and three litres in Japan.
Umbro profits lifted by Euro 2004

UK sportswear firm Umbro has posted a 222% rise in annual profit after sales of replica England football kits were boosted by the Euro 2004 tournament.

Pre-tax profit for 2004 was £15.4m ($29.4m). Umbro, which recently lost sponsorship deals with Chelsea and Celtic, said on Thursday it had signed a new four-year agreement with Scottish club Rangers. It hopes 2005 sales will benefit from the launch of a new England replica shirt ahead of the 2006 World Cup. In January, Umbro announced its sponsorship agreement with Chelsea, which gave Umbro the lucrative right to make replica shirts, would end in 2006, five years earlier than expected. The firm, which is to receive a payment from Chelsea of £24.5m, said it is "appraising a number of additional investment opportunities as a result of this compensation" . Chief executive Peter McGuigan said the firm plans to grow sales both in the UK and internationally.

The firm, reporting its first annual results since listing on the London Stock Exchange in June, said the UK market had seen sales growth of 8% last year. It said the launch of its Evolution X fashion range had boosted sales. Umbro supplies more than 150 teams across the world including the national sides of Ireland, Sweden and Norway. Shares in Umbro were up 1.76% at 115.5 pence in morning trade.
UK Coal plunges into deeper loss

Shares in UK Coal have fallen after the mining group reported losses had deepened to £51.6m in 2004 from £1.2m.

The UK's biggest coal producer blamed geological problems, industrial action and "operating flaws" at its deep mines for its worsening fortunes. The South Yorkshire company, led by new chief executive Gerry Spindler, said it hoped to return to profit in 2006. In early trade on Thursday, its shares were down 10% at 119 pence. UK Coal said it was making "significant progress" in shaking up the business. It had introduced new wage structures, a new daily maintenance regime for machinery at its mines and methods to continue mining in adverse conditions. The company said these actions should "significantly uplift earnings". It expected 2005 to be a "transitional year" and to return to profitability in 2006.

The recent rise in coal prices has failed to benefit the company as most of its output had already been sold, it said. Total production costs were £1.30 per gigajoule, UK Coal said, but the average selling price was just £1.18 per gigajoule. "We have a long journey ahead to fix these issues. We continue to make progress and great strides have already been made," said Mr Spindler. UK Coal operates 15 deep and surface mines across Nottinghamshire, Derbyshire, Leicestershire, Yorkshire, the West Midlands, Northumberland and Durham.
Saudi ministry to employ women

Women will be employed in Saudi Arabia's foreign ministry for the first time this year, Foreign Minister Prince Saud Al-Faisal has been reported as saying.

The move comes as the conservative country inches open the door to working women. Last year, Crown Prince Abdullah, the de-facto ruler, told government departments to put plans in place for employing women. But progress has been slow, reports from the country say.

Earlier this week, the local Arab News said Labour Minister Ghazi al-Gosaibi had "caused uproar" when he said his ministry was having difficulty hiring women because they demanded segregated offices. The newspaper said many Saudi women found his explanation "a pitiful excuse for not employing women". Women now make up more than half of all graduates from Saudi universities but only 5% of the workforce. "Our educational reforms have created a new generation of highly-educated and professionally trained Saudi women who are acquiring their rightful position in Saudi society," Arab News quoted Prince Saud as saying. "I am proud to mention here that this year we shall have women working in the Ministry of Foreign Affairs for the first time."
US crude prices surge above $53

US crude prices have soared to fresh four-month highs above $53 in the US as refinery problems propelled petrol prices to an all-time high.

US light sweet crude futures jumped to $53.09 a barrel in New York before closing at $53.03. The gains tracked a surge in US gasoline futures to a record high of $1.4850 a gallon. The jump followed a fire at Western Refining Company's refinery in Texas, which shut down petrol production. A spokesman for the group was unable to say when the production unit would be back up and running. "This market simply wants to go up," Citigroup Global Markets analyst Kyle Cooper told Reuters news agency. Ed Silliere, analyst at Energy Merchant, added: "Gasoline is up because of the refinery issues in Texas, which means there will be a scramble for product in the (US) Gulf Coast."

Elsewhere, a refinery in Houston was closed due to mechanical problems, while on Tuesday production at BP's Texas City refinery was taken down for a short time. In the approach to Spring, the market becomes much more sensitive to problems with petrol production as dealers anticipate rising demand for fuel ahead of the holiday season. The rise in prices came despite a US government report that showed domestic supplies of fuel oil and fuel were rising. Meanwhile, oil production cartel Opec's recent announcement that it was now unlikely to cut production levels has also failed to calm fears on the market. Oil prices are roughly 45% higher than a year ago and have risen sharply in recent weeks due to a combination of colder weather, the declining value of the dollar and fears that Opec could rein in production to head off a seasonal drop in demand. Instability in Iraq and underlying fears about terrorism have also played a part in the rally.
Industrial output falls in Japan

Japanese industrial output fell in October while unemployment rose, casting further doubt on the strength of the country's economic recovery.

Production dropped 1.6% in October, reflecting a decline in exports, while unemployment levels edged up 0.1% to 4.7%, slightly higher than forecast. The economy has grown for six quarters but growth slowed dramatically in the last quarter amid weaker global demand. Japan's government remains optimistic due to strong domestic demand.

Analysts had been forecasting a 0.1% rise in month on month industrial output.

According to figures from the Ministry of Economy, Trade and Industry (METI), the decline was led by a fall in demand for electronic parts for mobile phones and digital televisions. Although inventories fell 0.7% month on month, they were 36% higher than a year ago. "It's a sign that the economy's adjustment phase is stronger than expected," said Takashi Yamanaka, an economist with UFJ Bank. Japan downgraded its overall economic assessment earlier this month for the first time in a year.

Growth slowed to 0.3% in the quarter ending September 30, down from 6.3% in the first quarter of 2004. Experts believe the economy -which stagnated for most of the 1990s -may be entering a softer patch on the back of rising oil prices and the falling dollar. Japanese government officials played down the latest data, arguing that domestic consumer demand was still resilient. "The outlook for November is positive so I don't think one can say that conditions have worsened just because of the fall in October," said a METI official. Despite the rise in unemployment, jobless figures are still some way below historical highs of recent years. The comparatively weak economic date preyed on shares with the Nikkei down 1% in afternoon trade.
Ryanair in $4bn Boeing plane deal

Budget airline Ryanair has placed an order for 70 Boeing 737-800 planes, in a deal valued at $4bn (£2.1bn) which should lead to 2,500 new Ryanair jobs.

It also has an option for a further 70 aircraft, a move which brings the Ryanair/Boeing order book up to 225 firm orders and options on 193 more. Ryanair said the new planes would help it to cut operating costs further. The carrier reported a drop in quarterly profit earlier this year after it was hit by higher fuel costs. However, when it reported the results, the airline was upbeat about prospects for 2005, despite tough competition in the budget airline market.

Ryanair chairman David Bonderman said that the 737-800 had "significantly reduced our unit operating costs and allowed us to reduce air fares each year for the last five years".

"With this new order and new pricing in place, Ryanair expects that unit operating costs (excluding fuel) will continue to fall each year for the next five years," he added. At the end of this year, Ryanair will have taken delivery of about 100 new planes, while the 70 new orders are due for delivery between 2008 and 2012. The airline said that when all these planes have been delivered, it will be able to carry more than 70 million passengers a year, making it Europe's largest airline. About 2,500 new jobs should be created in the next seven years, it added. The order can be seen as good news for Boeing, which in recent years has been overtaken by European plane maker Airbus as the world's biggest-selling plane maker.
Parmalat to return to stockmarket

Parmalat, the Italian dairy company which went bust after an accounting scandal, hopes to be back on the Italian stock exchange in July.

The firm gained protection from creditors in 2003 after revealing debts of 14bn euros ($18.34bn; £9.6bn). This was eight times higher than it had previously stated. In a statement issued on Wednesday night, Parmalat Finanziaria detailed administrators' latest plans for re-listing the shares of the group.

As part of the re-listing on the Italian stock exchange, creditors' debts are expected to be converted into shares through two new share issues amounting to more than 2bn euros. The company's creditors will be asked to vote on the plan later this year. The plan is likely to give creditors of Parmalat Finanziaria shares worth about 5.7% of the debts they are owed. This is lower than the 11.3% creditors previously hoped to receive. Creditors of Parmalat, the main operating company, are likely to see the percentage of debt they receive fall from 7.3% to 6.9%.

Several former top Parmalat executives are under investigation for the fraud scandal. Lawmakers said on Wednesday night Enrico Bondi, the turnaround specialist appointed by the Italian government as Parmalat's chief executive, spoke positively about the company during a closed-door hearing of the Chamber of Deputies industry commission. "Bondi supplied us with elements of positive results on the industrial positions and on the history of debt which will find a point of solution through the Parmalat group's quotation on the market in July," Italian news agency Apcom quoted several lawmakers as saying in a statement.
Bad weather hits Nestle sales

A combination of bad weather, rising raw material costs and the sluggish European economy has hit sales at Swiss food and drink giant Nestle.

Revenue dipped 1.4% to 86.7bn Swiss francs ($74.6bn; £39.1bn) in 2004 as sales of ice cream and mineral water were dampened by the wet summer. However, Nestle's profits margins were helped by a strong performance in the Americas and China. Nestle is to raise its dividend by 11% after paying back some of its debt.

Nestle said that the strength of the Swiss franc against the US dollar, the disposal of businesses and challenging trading conditions in Europe all dented sales. A poor summer across the continent - in contrast to the prolonged heat wave in 2003 - "severely affected" demand for ice cream. Sales of bottled water also fell, although chocolate, coffee, frozen goods and petcare products performed better.

Elsewhere, Nestle said it had enjoyed an "exceptional" year in North America, outperforming the market in terms of sales growth. Nestle added that it had performed strongly in Africa and Asia despite the impact of high oil prices and political instability. Nestle's total earnings before interest remained broadly flat over the past year, despite the company managing to boost profit margins. As well as increasing its dividend, Nestle plans to buy back shares worth 1bn Swiss francs ($861m; £451m). Looking forward, Nestle forecasts organic earnings growth of about 5% in 2005, although it warned that trading would remain just as competitive.

Uncertainty remains over the future of Perrier, the iconic French mineral water owned by Nestle. Perrier has been locked in a long-standing dispute with unions about productivity levels at the business, which has lead Nestle to consider selling the firm. "The option of selling is Perrier is still on the table," chief executive Peter Brabeck-Letmathe confirmed on Thursday.
Fiat mulls Ferrari market listing

Ferrari could be listed on the stock market as part of an overhaul of Fiat's carmaking operations, the Financial Times has reported.

It said Fiat was set to restructure its business after reaching a $2bn (1.53bn euros; £1.05bn) settlement with GM about Fiat's ownership. Steps being considered include listing Ferrari and bringing Maserati and Alfa Romeo closer together, it said. Despite strong sales of Alfa Romeo, Fiat's car business is making a loss.

Under the proposals - which the paper said could be announced within days - the iconic sportscar maker could be listed separately on the market. Fiat owns a 56% stake in Ferrari -best known for its dominant Formula One motor racing team - having first bought into the business in 1969. It considered floating Ferrari in 2002 but opted to sell a minority stake to Italian bank Mediobanca for 775m euros ($1bn). That sale valued Ferrari - which owns the Maserati brand - at 2.3bn euros. The price tag would change if Maserati was stripped out. The Financial Times said Fiat may transfer Maserati within its wholly- owned Alfa Romeo division in an effort to exploit commercial synergies. Such a move would help Alfa Romeo and Maserati to share marketing, distribution and research & development costs. Maserati and Ferrari sell about 10,000 cars between them and both companies broke even in 2003.

Fiat, Italy's largest private sector employer, did not comment on the reported changes. Fiat recently negotiated an end to its alliance with General Motors. The US firm agreed to pay $2bn to exit an agreement under which it could have been liable to buy Fiat outright. Analysts said the reported restructuring was evidence of the greater flexibility which Fiat now had to develop the business.
Weak dollar hits Reuters

Revenues at media group Reuters slipped 11% during 2004, mainly due to the weakness of the dollar, the group said.

The company said it was optimistic about growth even as revenues slipped 11% from £3.24bn ($6.13bn) in 2003 to £2.89bn in 2004. Reuters beat profit forecasts, posting a 52% rise in profits for the year to £198m from the £130m seen a year earlier. Reuters also beat its savings target for 2004, delivering £234m of cuts. Under its three-year Fast Forward turnaround plan it had aimed to save £220m during the 12 months to 31 December.

Reuters also managed to slow a decline in underlying revenues to 5.4% from 10.2% in 2003 and cut its debt back to £160m from £610m a year earlier. The news and financial data seller said the year had begun well, adding it expected "further gradual improvement" in the second quarter of the year after good January sales. It added it was planning to deliver a further £105m of savings over the coming year - but said it expects to be hit with an £80m restructuring charge to pay for the cost of moving from Fleet Street to new headquarters in London at Canary Wharf. "Improving customer relationships, more competitive products and continued strong cost discipline position us well for 2005," chief executive Tom Glocer said, adding the company was beginning "to look beyond recovery to growth".
Hyundai to build new India plant

South Korea's Hyundai Motor has announced that it plans to build a second plant in India to meet the country's growing demand for cars.

The company didn't give details of its investment but it said the new plant would produce 150,000 cars a year. This will boost the annual production capacity of the company - India's second-largest car manufacturer - to 400,000 units. Hyundai expects its sales in India to grow 16% to 250,000 in 2005. By 2010, it expects to nearly double sales to 400,000 cars. The new plant will be built close to the existing one in Chennai, in the southern province of Tamil Nadu.

South Korea's top car maker estimates that the Indian market will grow 15% this year, to 920,000 vehicles, reaching 1.6 million vehicles by 2010. Demand in India has been driven by the poor state of public transport and the very low level of car ownership, analysts said. Figures show that currently only eight people per thousand are car owners. "We desperately need to expand our production in order to meet growing demand in the Indian auto market, which is growing over 12 percent every year, and to top our competitors," chairman Chung Mong-koo said in the statement. He said the company plans to use India as a base for exports to Europe, Latin America and the Middle East. The company - which controls half of the South Korean's market - aims to become a global top five auto maker by 2010.
BMW drives record sales in Asia

BMW has forecast sales growth of at least 10% in Asia this year after registering record sales there in 2004.

The luxury carmaker saw strong sales of its three marques - BMW, Mini and Rolls-Royce - in Asia last year after the launch of three new models. The company, which is vying with Mercedes-Benz for the title of leading premium carmaker, is confident about its prospects for the region in 2005. It is launching a revamped version of its 3-Series saloon class next month.

BMW sold nearly 95,000 cars in Asia last year, up 2.6% on 2003.

BMW-brand sales rose 2.3% to 80,600 while sales of Mini models rose 3.6% to 14,800. There was also a significant increase in sales of Rolls-Royces on the continent. BMW sold more than 100 of the iconic models compared with just ten the previous year. The German carmaker is aiming to boost annual sales in Asia to 150,000 by 2008. "Here in Asia, we consider a double-digit increase in retail on the order of 10 to 15% to be realistic on the basis of current features," said Helmut Panke, BMW's group chief executive.

China remains the main area of concern for BMW after sales there fell 16% last year. However, BMW is hopeful of a much better year in 2005 as its direct investment in China begins to pay dividends. The company only began assembling luxury high-powered sedans in China in 2003. 2004 was generally a good year for BMW, which saw revenues from its core car-making operations rise 11%.
Electrolux to export Europe jobs

Electrolux saw its shares rise 14% on Tuesday after it said it would be shifting more of its manufacturing to low-cost countries.

The Swedish firm, the world's largest maker of home appliances, said it is to relocate about 10 of its 27 plants in western Europe and North America. It did not say which facilities would be affected, but intends moving them to Asia, eastern Europe and Mexico. The company has two manufacturing sites in County Durham. It makes lawn and garden products in Newton Aycliffe, and cookers and ovens in Spennymoor. The Newton Aycliffe plant could also be affected by Electrolux's separate announcement that it is to spin-off its outdoor products unit into a new separate company.

Electrolux's subsidiary brands include AEG, Zanussi and Frigidaire. The company said it was speeding up its restructuring programme, which aims to save between £190m and £265m annually from 2009. "We see that about half the plants in high-cost countries - that is around 10 - are at risk," said Electrolux chief executive Hans Straberg. "It looks pretty grim," said Swedish trades union official Ulf Carlsson. "What are we going to end up producing in Sweden?"
Worldcom ex-boss launches defence

Lawyers defending former WorldCom chief Bernie Ebbers against a battery of fraud charges have called a company whistleblower as their first witness.

Cynthia Cooper, WorldCom's ex-head of internal accounting, alerted directors to irregular accounting practices at the US telecoms giant in 2002. Her warnings led to the collapse of the firm following the discovery of an $11bn (£5.7bn) accounting fraud. Mr Ebbers has pleaded not guilty to charges of fraud and conspiracy.

Prosecution lawyers have argued that Mr Ebbers orchestrated a series of accounting tricks at WorldCom, ordering employees to hide expenses and inflate revenues to meet Wall Street earnings estimates. But Ms Cooper, who now runs her own consulting business, told a jury in New York on Wednesday that external auditors Arthur Andersen had approved WorldCom's accounting in early 2001 and 2002. She said Andersen had given a "green light" to the procedures and practices used by WorldCom. Mr Ebber's lawyers have said he was unaware of the fraud, arguing that auditors did not alert him to any problems.

Ms Cooper also said that during shareholder meetings Mr Ebbers often passed over technical questions to the company's finance chief, giving only "brief" answers himself. The prosecution's star witness, former WorldCom financial chief Scott Sullivan, has said that Mr Ebbers ordered accounting adjustments at the firm, telling him to "hit our books". However, Ms Cooper said Mr Sullivan had not mentioned "anything uncomfortable" about WorldCom's accounting during a 2001 audit committee meeting. Mr Ebbers could face a jail sentence of 85 years if convicted of all the charges he is facing. WorldCom emerged from bankruptcy protection in 2004, and is now known as MCI. Last week, MCI agreed to a buyout by Verizon Communications in a deal valued at $6.75bn.
Insurance bosses plead guilty

Another three US insurance executives have pleaded guilty to fraud charges stemming from an ongoing investigation into industry malpractice.

Two executives from American International Group (AIG) and one from Marsh & McLennan were the latest. The investigation by New York attorney general Eliot Spitzer has now obtained nine guilty pleas. The highest ranking executive pleading guilty on Tuesday was former Marsh senior vice president Joshua Bewlay.

He admitted one felony count of scheming to defraud and faces up to four years in prison. A Marsh spokeswoman said Mr Bewlay was no longer with the company. Mr Spitzer's investigation of the US insurance industry looked at whether companies rigged bids and fixed prices. Last month Marsh agreed to pay $850m (£415m) to settle a lawsuit filed by Mr Spitzer, but under the settlement it "neither admits nor denies the allegations".
Further rise in UK jobless total

The UK's jobless total rose for the second month in a row in December, official figures show.

The number of people out of work rose 32,000 to 1.41 million in the last three months of 2004, even as 90,000 more people were in employment. Average earnings rose by 4.3% in the year to December up from November's 4.2%, the Office for National Statistics (ONS) added. Meanwhile, the benefit claimant total fell 11,000 to 813,200 last month. Throughout 2004, the number of people in work increased by 296,000 to 28.52 million - the highest figure since records began in 1971.

The apparent discrepancy between rising unemployment and record numbers in work can be explained by an increase in the working population and a fall in those who are economically inactive. While the UK's jobless rate rose to 4.7% from 4.6% in the previous quarter, the rate still remains one of the lowest in the world, compared with 12.1% in Germany, 10.4% in Spain and 9.7% in France. But, despite more people being in work, the manufacturing sector continued to suffer, with 104,000 workers axed during the last quarter of 2004 - pushing employment in the sector to a record low of 3.24 million by the end of last year. The figures prompted some analysts to forecast that the Bank of England will almost certainly raise rates this year. Marc Ostwald, a strategist at Monument Securities told Reuters that while no immediate market impact could be expected, "it is enough to underline that they (the BoE) will be more hawkish on rates".
Wembley firm won't make a profit

Shares in Multiplex Group, which is building the new Wembley stadium, fell as much as 19% after it said it would not make any money on the project.

The Australian firm said it would only break even on the 1.2bn Australian dollars (£458m; $874m) rebuild, after a rise in costs on the work. Any profits would depend on the outcome of legal cases resulting from a change in steel contractor, it added. It cut A$68m from profit targets for Wembley and another UK project.

Investors were shaken by the news and the firm's shares fell to a four month low of A$4.50, before recovering to close 16% down at A$4.67. The decline came despite Multiplex reporting an 11% rise in pre-tax profits to A$67.7m for 2004 and reaffirming its 2005 profit forecasts. Increased costs at Wembley and a separate development in London's Docklands saw Multiplex's construction division report profits of A$35.1m.

The firm said the result was below expectations but stressed that the majority of its UK projects - which also include the White City redevelopment scheme in west London - were performing strongly.

To recoup any profit from Wembley, where the firm changed its steel contractor due to a legal dispute, Multiplex will have to win legal claims against subcontractors. These claims could take up to two years to resolve. "Multiplex believes its claim are sound and ultimately will exceed the level needed to support the break even position," it said. "It is expected that profits will be possible in future periods as the claims are finalised." Wembley Stadium is to due to be completed in January and will officially open for the 2006 FA Cup Final. Analysts expressed concern at the unexpected paring back in profit. "Such a big writeback on the Wembley project in such a short period has impacted on management credibility," Simon Wheatley, from Goldman Sachs, told Reuters.
Cars pull down US retail figures

US retail sales fell 0.3% in January, the biggest monthly decline since last August, driven down by a heavy fall in car sales.

The 3.3% fall in car sales had been expected, coming after December's 4% rise in car sales, fuelled by generous pre-Christmas special offers. Excluding the car sector, US retail sales were up 0.6% in January, twice what some analysts had been expecting. US retail spending is expected to rise in 2005, but not as quickly as in 2004.

Steve Gallagher, US chief economist at SG Corporate & Investment Banking, said January's figures were "decent numbers".

"We are not seeing the numbers that we saw in the second half of 2004, but they are still pretty healthy," he added. Sales at appliance and electronic stores were down 0.6% in January, while sales at hardware stores dropped by 0.3% and furniture store sales dipped 0.1%. Sales at clothing and clothing accessory stores jumped 1.8%, while sales at general merchandise stores, a category that includes department stores, rose by 0.9%. These strong gains were in part put down to consumers spending gift vouchers they had been given for Christmas.

Sales at restaurants, bars and coffee houses rose by 0.3%, while grocery store sales were up 0.5%. In December, overall retail sales rose by 1.1%. Excluding the car sector, sales rose by just 0.3%. Parul Jain, deputy chief economist at Nomura Securities International, said consumer spending would continue to rise in 2005, only at a slower rate of growth than in 2004. "Consumers continue to retain their strength in the first quarter," he said. Van Rourke, a bond strategist at Popular Securities, agreed that the latest retail sales figures were "slightly stronger than expected".
Lufthansa may sue over Bush visit

German airline Lufthansa may sue federal agencies for damages after the arrival of US president George W Bush disrupted flights.

Lufthansa said that it may lose millions of euros as a result of Air Force One landing at Frankfurt airport. Flights were affected for an hour on Wednesday morning, double the time that had been expected, leading to cancellations and delays. Lufthansa accounts for six out of every 10 planes using Frankfurt's airport.

"We are doing research into the possibilities we have," Michael Lamberty, a Lufthansa spokesman told the BBC. "We are checking if there is action to be taken and in which courts it could be taken." Mr Lamberty explained that the company did not plan to pursue Germany's air traffic controllers' organisation or the airport authority but wanted instead to see if it was possible to sue the German federal agencies that gave the orders. The company said that it had to cancel 77 short and medium-distance flights, affecting about 5,000 passengers. Long-haul travellers were not disrupted.

Central to the problem was that instead of half an hour, the arrival of President Bush on the German leg of his European tour took the best part of an hour, Lufthansa said. During that time, restrictions were put on planes taxiing, taking off and landing at Frankfurt's Rhein-Main airport. The extra time taken by President Bush and his entourage meant that there was a knock-on effect that led to significant delays. Mr Lamberty said that 92 outgoing flights and 86 income flights were delayed by an average of an hour following President Bush's arrival, affecting almost 17,000 passengers. Despite the problems, Mr Lamberty said that it was not certain that Lufthansa would take legal action.
FAO warns on impact of subsidies

Billions of farmers' livelihoods are at risk from falling commodity prices and protectionism, the UN's Food & Agriculture Organisation has warned.

Trade barriers and subsidies "severely" distort the market, the FAO report on the "State of Agricultural Commodity Markets 2004" said. As a result, the 2.5 billion people in the developing world who rely on farming face food insecurity. The most endangered are those who live in the least-developed countries. The FAO report said that support for farmers in industrialised nations was equivalent to 30 times the amount provided as aid for agricultural development in poor countries.

The FAO has urged the World Trade Organisation to swiftly conclude negotiations to liberalise trade, easing developing countries' access to the world market. It also criticised the high tariffs imposed by both developed and developing nations. It recommends that developing countries reduce their own tariffs to encourage trade and take advantage of market liberalisation.

According to the organisation, subsidies and high tariffs have a strong impact on the trade of products such as cotton and rice. Global exports of these products are mainly in the hands of the European Union and the US, who - thanks to subsidies - sell them at very low prices. In fact, almost 30 wealthy nations spend more than $300bn (£158.8bn; 230.9bn euros) in agricultural subsidies. The market situation has divided developing nations in two groups, the FAO said. The first group have a reasonably diverse range of agricultural products while in the second group, agriculture lies largely in the hands of small-scale producers. For 43 developing countries, more than 20% of their export incomes come from the sale of just one product. These countries are mainly situated in Sub-Saharan Africa, Latin America and the Caribbean.
Circuit City gets takeover offer

Circuit City Stores, the second-largest electronics retailer in the US, has received a $3.25bn (£1.7bn) takeover offer.

The bid has come from Boston-based private investment firm Highfields Capital Management, which already owns 6.7% of Circuit City's shares. Shares in the retailer were up 19.6% at $17.04 in Tuesday morning trading in New York following the announcement. Highfield said that it intends to take the Virginia-based firm private.

"Such a transformation would eliminate the public-company transparency into the company's operating strategy that is uniquely damaging in a highly competitive industry where Circuit City is going head-to-head with a tough and entrenched rival," Highfield said. One analyst suggested that a bidding battle may now begin for the company. Bill Armstrong, a retail analyst at CL King & Associates, said he expected to see other private investment firms come forward for Circuit City. The retailer is debt free with a good cash flow, despite the fact that it is said to be struggling to keep up with market leader Best Buy and cut-price competition from the likes of Wal-Mart, said Mr Armstrong.
Japan turns to beer alternatives

Japanese brewers are increasingly making money from beer-flavoured drinks rather than beer itself

Beer and spirits are heavily taxed in Japan, driving breweries to search for alternatives. Japan's long economic downturn helped drive the trend, as drinkers looked for cheaper opportunities to drown their sorrows. Now, according to Asahi Breweries, the market for so-called "beer-like" drinks is set to grow 84% this year.

Asahi is predicting profits to rise 50% in 2005 as it launches a drink based on soybean peptides rather than malt. The chosen name, "Shinnama" or "new draft", disguises its non-beer nature. But despite a record profit in 2004 of 30.6bn yen ($291m; £154m), up 31.8% on the previous year, Asahi is coming late to the market. Key rival Sapporo is already well-established with the beer-flavoured "Draft One". Suntory, meanwhile, is doing well with "Super Blue", which combines happoshu - an existing low-cost beer alternative made with malt and seawater - and shochu, a distilled alcohol derived from sweet potatoes or barley. Happoshu has been a mainstay of brewery profits for years, taking over from beer thanks to its low tax and therefore low cost. Kirin, the fourth big name, is launching its own "third-type" drink in April.
S Korean consumers spending again

South Korea looks set to sustain its revival thanks to renewed private consumption, its central bank says.

The country's economy has suffered from an overhang of personal debt after its consumers' credit card spending spree. Card use fell sharply last year, but is now picking up again with a rise in spending of 14.8% year-on-year. "The economy is now heading upward rather than downward," said central bank governor Park Seung. "The worst seems to have passed." Mr Park's statement came as the bank decided to keep interest rates at an all-time low of 3.25%. It had cut rates in November to help revive the economy, but rising inflation - reaching 0.7% month-on-month in January - has stopped it from cutting further. Economic growth in 2004 was about 4.7%, with the central bank predicting 4% growth this year. Other indicators are also suggesting that the country is inching back towards economic health. Exports - traditionally the driver for expansion in Asian economies - grew slower in January than at any time in 17 months. But domestic demand seems to be taking up the slack. Consumer confidence has bounced back from a four-year low in January, and retail sales were up 2.1% in December. Credit card debt is falling, with only one in 13 of the 48 million cards now in default - down from one in eight at the end of 2003. One of its biggest card issuers, LG Card, was rescued from collapse in December, having almost imploded under the weight of its customers' bad debts. The government last year tightened the rules for card lending to keep the card glut under control.
German growth goes into reverse

Germany's economy shrank 0.2% in the last three months of 2004, upsetting hopes of a sustained recovery.

The figures confounded hopes of a 0.2% expansion in the fourth quarter in Europe's biggest economy. The Federal Statistics Office said growth for the whole of 2004 was 1.6%, after a year of contraction in 2003, down from an earlier estimate of 1.7%. It said growth in the third quarter had been zero, putting the economy at a standstill from July onward. Germany has been reliant on exports to get its economy back on track, as unemployment of more than five million and impending cuts to welfare mean German consumers have kept their money to themselves. Major companies including Volkswagen, DaimlerChrysler and Siemens have spent much of 2004 in tough talks with unions about trimming jobs and costs. According to the statistics office, Destatis, rising exports were outweighed in the fourth quarter by the continuing weakness of domestic demand.

But the relentless rise in the value of the euro last year has also hit the competitiveness of German products overseas. The effect has been to depress prospects for the 12-nation eurozone as a whole, as well as Germany. Eurozone interest rates are at 2%, but senior officials at the rate-setting European Central Bank are beginning to talk about the threat of inflation, prompting fears that interest rates may rise. The ECB's mandate is to fight rising prices by boosting interest rates - and that could further threaten Germany's hopes of recovery.
Turkey-Iran mobile deal 'at risk'

Turkey's investment in Iran's mobile industry looks set to be scrapped after its biggest mobile firm saw its investment there slashed by MPs.

Iran's parliament voted by a large majority to cut Turkcell's stake in a new mobile network from 70% to 49%. The move, which was justified on national security grounds, follows an earlier vote by MPs to give themselves a veto over foreign investments. Turkcell said the decision "increases the risks" attached to the project. Although the company's statement said it would continue to monitor developments, observers said they thought Turkcell was set to pull out of the $3bn deal. "The possibility of carrying out this project is next to zero," said Atinc Ozkan, analyst at Finans Investment in Istanbul. If Turkcell does back out, MTN - the South African firm which lost out in the original tender - may well be back in the running. The company has said it is prepared to accept a minority stake if Iran will award it the mobile deal.

Turkcell's mobile deal is the second Turkish investment in Iran to run into trouble. Turkish-Austrian consortium TAV was chosen to build and run Tehran's new Imam Khomeini International Airport - but the army closed it just hours after it opened in May 2004. In both cases, the justification has been national security, amid allegations that the Turkish firms are too close to Israel. The hardline posture taken by parliament, which is dominated by religious conservatives, could yet impact other inward investments.
EU ministers to mull jet fuel tax

European Union finance ministers are meeting on Thursday in Brussels, where they are to discuss a controversial jet fuel tax.

A levy on jet fuel has been suggested as a way to raise funds to finance aid for the world's poorest nations. Airlines and aviation bodies have reacted strongly against the plans, saying they would hurt companies at a time when earnings are under pressure. The EU said a tax would only be passed after full consultation with airlines. It was keen to point out earlier this week that any new tax on jet fuel should not hurt the "competitiveness of the airlines". Ministers will also be discussing reforms to regulations governing European public spending.

Global leaders have focused attention on poverty reduction and development at recent meetings of the G7 Group and World Economic Forum. The world's richest countries have said they want to boost the amount of aid they give to 0.7% of their annual gross national income by 2015. Many EU ministers are thought to support the plan to tax jet fuel - tabled by France and Germany following the recent G7 meeting. At present, the fuel used by airlines enjoys either a very low tax rate or is untaxed in EU member states.
Palestinian economy in decline

Despite a short-lived increase in Palestinian jobs in 2003, the economy is performing well below its potential, said a World Bank report.

Unemployment stood at 25%, compared with 10% before the uprising against Israeli occupation four years ago. Young people are particularly hard hit with 37% out of work, compared with 14% four years ago. But 104,000 new jobs were created last year during a brief easing of violence and closures. However, during the first half of this year, the Palestinian economy lost more than 22,000 jobs. Last year's growth rate of 6% can also be attributed to this temporary gap in violence, the report said. According to the report, Intifada, Closures and Palestinian Economic Crisis: An Assessment, there is a close link between the number of closures - both border closures and internal closures between cities - and Palestinian economic problems. The closures arranged by Israel restrict the movement of Palestinian people and goods, slowing down trade.

"Closures are a key factor behind today's economic crisis in the West Bank," said Nigel Roberts, World Bank country director for the West Bank and Gaza. Nearly half of all Palestinians - some 47% - live below the poverty line and are particularly vulnerable to economic shocks. The report said even more would be on the poverty line without an average of $950m a year from international donors, some of which goes towards job creation. It also called on the Palestinian Authority to revive its reform programme and maintain financial discipline to create an investment-friendly climate. This week Colin Powell, US Secretary of State was visiting the West Bank to stress US support for a smooth Palestinian election in January.
Deadline nears for Fiat-GM deal

Fiat and General Motors (GM) have until midnight on 1 February to settle a disagreement over a potential takeover.

The deadline marks the point at which Fiat will gain the right to sell its car division to GM, part of an alliance agreed in 2000. GM, whose own European operations are losing money, no longer wants to own the unprofitable Fiat unit. Reports of deadlocked talks sent Fiat shares down 1.2% on Tuesday, after Monday's 4% gain on hopes of a payoff. The US firm is thought to be offering about $2bn (£1.06bn) to extricate itself from the arrangement. It has argued the deal was voided by Fiat's decision to sell off Fiat's finance arm and halve GM's stake via a capital-raising effort.

The 2000 deal resulted from a race between GM and DaimlerChrysler to ally with Fiat. The German firm wanted to buy Fiat outright. But Gianni Agnelli, the godfather of the group, wanted to keep control, and preferred GM's offer to buy a 20% stake and give Fiat the right to sell in the future, known as a "put option". Since then, however, Fiat cars have lost market share and the firm has piled up losses, while a plan to raise new money in 2003 cut GM's stake in half to 10%. For its part, GM's European units Opel and Saab have both had trouble, with Opel management threatening to cut 12,000 jobs. "The last thing they need is additional production capacity in Europe," said Patrick Juchemich, auto analyst at Sal Oppenheim Bank.
ID theft surge hits US consumers

Almost a quarter of a million US consumers complained of being targeted for identity theft in 2004, official figures suggest.

The Federal Trade Commission said two in five of the 635,173 reports it had from consumers concerned ID fraud. ID theft occurs when criminals use someone else's personal information to steal credit or commit other crimes. Internet auctions were the second biggest source of fraud complaints, comprising 16% of the total. The total cost of fraud reported by consumers was $546m (£290m).

The report marks the fifth year in a row in which identity fraud has topped the table. The biggest slice of the 246,570 ID fraud cases reported - almost 30% - concerned abuses of people's credit. Misusing someone's identity to claim new credit cards or loans comprised 16.5% of the total, with almost 12% coming from false claims on existing credit. Another 18% came from attempts to rip off people's bank accounts, while 13% of cases concerned attempts to defraud employers by abusing someone else's identity. Outside the field of ID theft, 53% of the near-400,000 complaints were internet-related. Among the 100,000 internet auction complaints, the failure of sellers to deliver or the supply of sub-standard goods were the most common woes reported. Catalogue and home-shopping frauds were next in line, accounting for 8% of total complaints, while concerns about internet services and computers - including spyware found on people's PCs and undisclosed charges for websites - amounted to 6% of complaints.
Argentina, Venezuela in oil deal

Argentina and Venezuela have extended a food-for-oil deal, which helped the former to overcome a severe energy crisis last year.

Argentine President Nestor Kirchner and Venezuelan President Hugo Chavez signed the deal in Buenos Aires on Tuesday. Last April, Argentina signed a $240m agreement to import Venezuelan fuel in exchange for agricultural goods and this deal has now been extended. Venezuela will now import cattle, medicines and medical equipment. Last year, Argentina's severe energy crisis forced President Kirchner to suspend gas exports to Chile. Argentina fears that rising demand could spark another crisis and wants to prevent it by signing this deal. The two countries also formalised a co-operation deal between Venezuelan energy firm PDVSA and Argentina's Enarsa. Under this deal, the Argentine market will be opened to Venezuelan investment. President Chavez added that Brazil's Petrobras could join soon the co-operation deal. President Chavez is an ardent promoter of the concept of a South American oil company, which could include the state-owned companies of Venezuela, Argentina, Brazil and Bolivia. The two presidents also agreed to create 'Television Sur', a Latin American network of state-owned television channels.
BMW to recall faulty diesel cars

BMW is to recall all cars equipped with a faulty diesel fuel-injection pump supplied by parts maker Robert Bosch.

The faulty part does not represent a safety risk and the recall only affects pumps made in December and January. BMW said that it was too early to say how many cars were affected or how much the recall would cost. The German company is to extend a planned production break at one of its plants due to the faulty Bosch part. The Dingolfing site will now be closed all next week instead of for just two days. The additional three-day stoppage will mean a production loss of up to 3,600 vehicles, BMW said, adding that it was confident it could make up the numbers later.

Bosch has stopped production of the part but expects to restart by 2 February. The faulty component does not represent a safety risk but causes the motor to stall after a significant amount of mileage. When asked if BMW would be seeking compensation from Bosch, the carmaker's chief executive Helmut Panke said: "we will first solve the problem before talking about who will pay". Audi and Mercedes Benz were also supplied with the defective diesel fuel-injection pumps but neither of them have to recall any vehicles. A spokesman for DaimlerChrysler, parent company of Mercedes Benz, said it will however have to halt some production. It is to close the Mercedes factory in Sindelfingen on Monday and Tuesday. Audi said it had been hit by production bottlenecks, due to a shortage of unaffected Bosch parts.
Takeover rumour lifts Exel shares

Shares in storage and delivery firm Exel closed up 9% at a two-and-a-half year high on Tuesday on speculation it is to receive an imminent takeover bid.

The talk in the City is that US giant United Parcel Services (UPS) is the most likely bidder for the firm. Yet other names mentioned in connection to buying Exel are DHL-owner Deutsche Post and finance firm GE Capital. With its shares closing Tuesday at 873p, Bracknell-based Exel is currently valued at £2.6bn ($6.3bn).

Exel employs 109,000 people in more than 120 countries and has itself been active in the consolidation of the logistics sector, paying £328m to buy fellow UK firm Tibbett & Britten last August. Its customers include Boots, Burberry, Mothercare and consumer products giant Procter & Gamble. Andrew Beh, of brokers ING, said UPS and Deutsche Post were the most likely bidders and an offer of 950p a share would be fair if a bidding battle did not break out. "It's a great strategic fit for both companies," he said. "Both are interested in expanding in logistics and you can make a decent case for cost synergies which could justify the premium and that's before you make any argument about revenue synergies."
Mexican in US send $16bn home

Mexican labourers living in the US sent a record $16.6bn (£8.82bn) home last year.

The Bank of Mexico said that remittances grew 24% last year and now represent the country's second-biggest source of income after oil. Better records and greater prosperity of Mexican expatriates in the US are the main reasons behind the increase. About 10 million Mexicans live in the US, where there are 16 million citizens of Mexican origin. Remittances now represent more than 2% of the country's GDP, according to the Bank of Mexico's figures. Last year, there were 50.9 million transactions, with an average value of $327 per remittance, the bank said. According to Standard & Poor's, which has recently upgraded Mexico's sovereign debt rating, the rise in remittances helps protect the Mexican economy against a potential fall in the international oil prices.

The growth in remittances has sparked fierce competition between banks. Bank of America announced last week that it planned to eliminate transfer fees for some customers. Remittance charges are estimated to have dropped by between 50 and 60%, reports from the US Treasury and the Inter-American Development Bank have said. The Inter-American Development Bank estimates that remittances to Latin America and the Caribbean reached $45bn in 2004.
Home loan approvals rising again

The number of mortgages approved in the UK has risen for the first time since May last year, according to lending figures from the Bank of England.

New loans in December rose to 83,000, slightly higher than November's nine-year low of 77,000. Mortgage lending rose by £7.1bn in December, up from a £6.4bn rise in November. The figures contradict a survey from the British Bankers' Association, which said approvals were at a five-year low.

Analysts say the figures show the market may be stabilising but still point to further house price softness. "The modest rise in mortgage approvals and lending in December reinforces the impression that the housing market is currently slowing steadily rather than sharply," said Global Insight analyst Howard Archer, commenting on the BoE's figures. The BBA believes that the property market is continuing to cool down. Changes to mortgage regulation may have artificially depressed figures in November, thus flattering the December figures, analysts said. In October last year, new rules came into force, which meant some lenders were forced to withdraw mortgage products temporarily in November and defer some lending until they had made sure they had complied with the rules properly. Separately, the Bank of England said that consumer credit rose by £1.5bn in December, more than the £1.4bn expected and above the £1.4bn reported in the previous month.
Manufacturing recovery 'slowing'

UK manufacturing grew at its slowest pace in one-and-a-half years in January, according to a survey.

The Chartered Institute of Purchasing and Supply (CIPS) said its purchasing manager index (PMI) fell to 51.8 from a revised 53.3 in December. But, despite missing forecasts of 53.7, the PMI number remained above 50 - indicating expansion in the sector. The CIPS said that the strong pound had dented exports while rising oil and metals prices had kept costs high.

The survey added that rising input prices and cooling demand had deterred factory managers from hiring new workers in an effort to cut costs. That triggered the second successive monthly fall in the CIPS employment index to 48.3 - its lowest level since June 2003. The survey is more upbeat than official figures - which suggest that manufacturing is in recession - but analysts said the survey did suggest that the manufacturing recovery was running out of steam. "It appears that the UK is in a two-tier economy again," said Prebon Yamane economist Lena Komileva. "You have weakness in manufacturing, which I think would concern policymakers at the Bank of England."
Worldcom boss 'left books alone'

Former Worldcom boss Bernie Ebbers, who is accused of overseeing an $11bn (£5.8bn) fraud, never made accounting decisions, a witness has told jurors.

David Myers made the comments under questioning by defence lawyers who have been arguing that Mr Ebbers was not responsible for Worldcom's problems. The phone company collapsed in 2002 and prosecutors claim that losses were hidden to protect the firm's shares. Mr Myers has already pleaded guilty to fraud and is assisting prosecutors.

On Monday, defence lawyer Reid Weingarten tried to distance his client from the allegations. During cross examination, he asked Mr Myers if he ever knew Mr Ebbers "make an accounting decision?". "Not that I am aware of," Mr Myers replied. "Did you ever know Mr Ebbers to make an accounting entry into Worldcom books?" Mr Weingarten pressed. "No," replied the witness. Mr Myers has admitted that he ordered false accounting entries at the request of former Worldcom chief financial officer Scott Sullivan. Defence lawyers have been trying to paint Mr Sullivan, who has admitted fraud and will testify later in the trial, as the mastermind behind Worldcom's accounting house of cards.

Mr Ebbers' team, meanwhile, are looking to portray him as an affable boss, who by his own admission is more PE graduate than economist. Whatever his abilities, Mr Ebbers transformed Worldcom from a relative unknown into a $160bn telecoms giant and investor darling of the late 1990s. Worldcom's problems mounted, however, as competition increased and the telecoms boom petered out. When the firm finally collapsed, shareholders lost about $180bn and 20,000 workers lost their jobs. Mr Ebbers' trial is expected to last two months and if found guilty the former CEO faces a substantial jail sentence. He has firmly declared his innocence.
Metlife buys up Citigroup insurer

US banking giant Citigroup has sold its Travelers Life & Annuity insurance arm to Metlife for $11.5bn (£6.1bn).

The sale is a further move by Citigroup away from its 1990s strategy of offering every financial service - insurance, broking and banking. Profit growth in the insurance market has not matched expansion at Citigroup's other businesses. For Metlife, the US's leading insurance company, the purchase gives it access to a much larger distribution network.

Robert Benmosche, Metlife's chairman and chief executive, said that it was a "great opportunity for the brand of Metlife to be distributed through Citigroup". Under the agreement, Metlife will be able to sell its products through Citigroup over the next 10 years. The deal includes Smith Barney retail brokerages and Citibank branches. The company will pay between $1bn and $3bn in Metlife stock with the rest being made up of cash. Travelers had sales of $5.2bn in 2004 and made a profit of $901m. It has total net assets of $96bn. "This deal employs some of Metlife's excess capital in a potentially higher-return business and gives it more distribution," said Stuart Quint, an analyst at Gartmore.
Russia gets investment blessing

Soaring oil sales and a budget surplus mean Russian debt is no longer a risky investment, one of the world's leading credit rating agencies says.

Standard & Poor's has classed Russian bonds as "investment grade", up from their former "speculative" rating. Russia's reputation among investors has been hurt in recent months by the heavy tax bills and asset seizures imposed on companies such as oil giant Yukos. S&P said the solidity of government finances outweighed the risk. Russia is now a net creditor rather than a debtor. Gold and foreign currency reserves of $119bn beat its foreign public debt of some $113bn.

The other two major ratings agencies - Fitch and Moody's have long since upped their rating of Russia's sovereign debt. S&P had held back through fear that the government was dragging its feet on economic and legal reforms. Now, though, it has finally followed suit. But the agency made it clear that the improved rating did not mean that the risks were a thing of the past. Instead, with Russian government coffers brimming with tax revenues from energy sales, S&P said the government's own debt is looking a good bet. "These improvements are so significant that they now outweight the serious and growing political risk that continues to be a key ratings constraint on Russia," wrote S&P credit analyst Helena Hessel.

The Yukos saga is the most high-profile of the political risks to which Ms Hessel alludes. The company's founder and ex-chief executive, Mikhail Khodorkovsky, is in jail on trial for tax evasion and fraud. Many believe the real motive for his prosecution is that he threatened to use his wealth to set up a political alternative to President Vladimir Putin. His company, meanwhile, is widely believed to have fallen victim to the Kremlin's wish to get Russian energy resources as far as possible back under state control.
Argentina closes $102.6bn debt swap

Argentina is set to close its $102.6bn (£53.51bn) debt restructuring offer for bondholders later on Friday, with the government hopeful that most creditors will accept the deal.

The estimated loss to bondholders is up to 70% of the original value of the bonds, yet the majority are expected to accept the government's offer. Argentina defaulted on its debt three years ago, the biggest sovereign default in modern history. Yesterday Argentina's economy minister, Roberto Lavagna, said that he estimated that the results of the restructuring would be ready around next Thursday (3 March). Argentina's President, Nestor Kirchner, said on Friday: "A year ago when we started the swap (negotiations), they told us we were crazy, that we were irrational." But he added that his government was close to achieving: "The best debt renegotiation in history." The country has been in default on the $102.6bn - based on an original debt of $81.8bn plus interest - for the past three years. If the offer does not go ahead, international lawsuits on behalf of aggrieved investors could follow but analysts are optimistic that it will go through, despite the tough terms for bondholders. About 70% to 80% of bondholders are expected to accept the terms of the offer. By 18 February, creditors holding $41bn - or 40% of the total debt - had accepted the offer. Sorting out its debt would enhance the country's credibility on international markets and enable it to attract more foreign investment. Of Argentina's bondholders, 38.4% reside in Argentina, 15.6% in Italy, 10.3% in Switzerland, 9.1% in the United States, 5.1% in Germany and 3.1% in Japan. Investors in the UK, Holland and Luxembourg have about 1% each and the remainder were not broken down by country. The deal is likely to be taken up most enthusiastically by domestic investors, who will benefit if Argentina's economy becomes more stable.
US economy shows solid GDP growth

The US economy has grown more than expected, expanding at an annual rate of 3.8% in the last quarter of 2004.

The gross domestic product figure was ahead of the 3.1% the government estimated a month ago. The rise reflects stronger spending by businesses on capital equipment and a smaller-than-expected trade deficit. GDP is a measure of a country's economic health, reflecting the value of the goods and services it produces.

The new GDP figure, announced by the Commerce Department on Friday, also topped the 3.5% growth rate that economists had forecast ahead of Friday's announcement. Growth was at an annual rate of 4% in the third quarter of 2004 and for the year it came in at 4.4%, the best figure in five years. However, the positive economic climate may lead to a rise in interest rates, with many expecting US rates to rise on 22 March. In the January-to-March quarter, the economy is expected to grow at an annual rate of about 4%, economists forecast. In the final quarter of 2004, businesses increased spending on capital equipment and software by 18%, up from 17.5% in the third quarter. Consumer spending grew 4.2% in the final quarter, down from the third quarter's 5.1%.
Profits slide at India's Dr Reddy

Profits at Indian drugmaker Dr Reddy's fell 93% as research costs rose and sales flagged.

The firm said its profits were 40m rupees ($915,000; £486,000) for the three months to December on sales which fell 8% to 4.7bn rupees. Dr Reddy's has built its reputation on producing generic versions of big-name pharmaceutical products. But competition has intensified and the firm and the company is short on new product launches. The most recent was the annoucement in December 2000 that it had won exclusive marketing rights for a generic version of the famous anti-depressant Prozac from its maker, Eli Lilly. It also lost a key court case in March 2004, banning it from selling a version of Pfizer's popular hypertension drug Norvasc in the US. Research and development of new drugs is continuing apace, with R&D spending rising 37% to 705m rupees - a key cause of the decrease in profits alongside the fall in sales. Patents on a number of well-known products are due to run out in the near future, representing an opportunity for Dr Reddy, whose shares are listed in New York, and other Indian generics manufacturers.

Sales in Dr Reddy's generics business fell 8.6% to 966m rupees. Another staple of the the firm's business, the sale of ingredients for drugs, also performed poorly. Sales were down more than 25% from the previous year to 1.4bn rupees in the face of strong competition both at home, and in the US and Europe. Dr Reddy's Indian competitors are gathering strength although they too face heavy competitive pressures.
Burren awarded Egyptian contracts

British energy firm Burren Energy has been awarded two potentially lucrative oil exploration contracts in Egypt.

The company successfully bid for the two contracts, granted by government owned oil firms, covering onshore and offshore areas in the Gulf of Suez. Burren Energy already has a presence in Egypt, having been awarded an exploration contract last year. The firm, which floated in 2003, recently announced a deal to buy 26% of Indian firm Hindustan Oil Exploration. The £13.8m deal gives Burren Energy access to the Indian oil and gas industry. This latest contract expands Burren Energy's global exploration and production portfolio - it also holds contracts in Turkmenistan and the Republic of Congo. "These assets significantly increase our exploration portfolio in Egypt and we continue to investigate further opportunities in this region," said chief executive Finian O'Sullivan.
IMF 'cuts' German growth estimate

The International Monetary Fund is to cut its 2005 growth forecast for the German economy from 1.8% to 0.8%, the Financial Times Deutschland reported.

The IMF will also reduce its growth estimate for the 12-member eurozone economy from 2.2% to 1.6%, the newspaper reported. The German economy has been faltering, with unemployment levels rising to a seventy-year high of 5.2 million. Its sluggish performance continues to hamper the entire eurozone.

The IMF's draft World Economic Outlook - due to be published in April - would point to a marked deterioration in Germany's economy, the FT report said.

In September, the IMF had said that German growth for the current year would be 1.8%. The IMF has also revised eurozone forecasts, the paper said, taking into account high oil prices, the strength of the euro and weak demand in many of the world's leading economies. Europe's economic difficulties have been highlighted by the Organisation for Economic Co-operation and Development, which argued in a report published on Tuesday that the continent could only achieve US living standards by freeing up its labour markets. "The eurozone does not look like it has a self-sustaining recovery," James Carrick, an economist with ABN Amro, told the newspaper. "It is too dependant on the rest of the world."
US company admits Benin bribery

A US defence and telecommunications company has agreed to pay $28.5m after admitting bribery in the West African state of Benin.

The Titan corporation was accused of funnelling more than $2m into the 2001 re-election campaign of President Mathieu Kerekou. At the time, Titan was trying to get a higher price for a telecommunications project in Benin. There is no suggestion that Mr Kerekou was himself aware of any wrongdoing. Titan, a California-based company, pleaded guilty to falsifying its accounts and violating US anti-bribery laws. It agreed to pay $13m in criminal penalties, as well as $15.5m to settle a civil lawsuit brought by the US financial watchdog, the Securities and Exchange Commission (SEC).

The SEC had accused Titan of illegally paying $2.1m to an unnamed agent in Benin claiming ties with President Kerekou. Some of the money was used to pay for T-shirts with campaign slogans on them ahead of the 2001 election. Shortly after the poll, which Mr Kerekou won, Benin officials agreed to quadruple Titan's management fee. Prosecuting attorney Carol Lam said: "All US companies should take note that attempting to bribe foreign officials is criminal conduct and will be appropriately prosecuted." The company says it no longer tolerates such practices. Under the US Foreign Corrupt Practices Act, it is a crime for American firms to bribe foreign officials.
Budget Aston takes on Porsche

British car maker Aston Martin has gone head-to-head with Porsche's 911 sports cars with the launch of its cheapest model yet.

With a price tag under £80,000, the V8 Vantage is tens of thousands of pounds cheaper than existing Aston models. The Vantage is "the most important car in the history of our company", said Aston's chief executive Ulrich Bez. Aston - whose cars were famously used by James Bond - will unveil the Vantage at the Geneva Motor Show on Thursday. Mr Bez - himself a former executive at rival Porsche - said the new car was the company's "most affordable car ever and makes the brand accessible". This in turn would make Aston Martin "globally visible, but still very, very exclusive", he added.

First shown as a concept car at the 2003 North American International Auto Show in Detroit, the V8 Vantage will be available in the UK in late summer. Development costs for the Vantage have been kept low by sharing a platform with Aston's DB9, which Mr Bez described as "the previous most important car for our company". There is currently an 18 months waiting list for the DB9, Mr Bez said. The Vantage will be built at the new Aston factory in Gaydon, near Warwick, and should more than double Aston's total output from about 2,000 presently.
Golden rule 'intact' says ex-aide

Chancellor Gordon Brown will meet his golden economic rule "with a margin to spare", according to his former chief economic adviser.

Formerly one of Mr Brown's closest Treasury aides, Ed Balls hinted at a Budget giveaway on 16 March. He said he hoped more would be done to build on current tax credit rules. Any rate rise ahead of an expected May election would not affect the Labour Party's chances of winning, he added. Last July, Mr Balls won the right to step down from his Treasury position and run for parliament, defending the Labour stronghold of Normanton in West Yorkshire.

Mr Balls rejected the allegation that Mr Brown had been sidelined in the election campaign, saying he was playing a "different" role to the one he played in the last two elections. He rejected speculation that Mr Brown was considering becoming Foreign Secretary, saying his recent travels had been linked to efforts to boost international development. Gordon Brown's decision to announce the date of the Budget while on a trip to China was a "sensible thing to do", since he was talking about skills and investment at the time, Mr Balls told the BBC. Commenting on speculation of an interest rate rise, he said it was not within the remit of the Bank of England's Monetary Policy Committee (MPC) to factor a potential election into its rate decisions. Expectations of a rate rise have gathered pace after figures showed that house prices are still rising. Consumer borrowing rose at a near-record pace in January. "I don't believe it would be a big election issue in Britain or a problem for Labour," Mr Balls said. Prime Minister Tony Blair has yet to name the date of the election, but most pundits are betting on 5 May as the likely day.
Liberian economy starts to grow

The Liberian economy started to grow in 2004, but "sustained and deep reform efforts" are needed to ensure long term growth, the International Monetary Fund (IMF) has said.

An IMF mission made the comments in a report published following 10 days of talks with the transition government. The IMF said that, according to data provided by the Liberians, the country's GDP rose by 2% in 2004, after a 31% decline in 2003. Liberia is recovering from a 14-year civil war that came to an end in 2003. The power-sharing National Transition Government of Liberia will remain in place until elections on 11 October, the first presidential and parliamentary ballots since the conflict ended.

The IMF said Liberia's economy started to grow last year thanks to a "continued strong recovery in rubber production, domestic manufacturing and local services including post-conflict reconstruction". The IMF however remains cautious about what it sees as a lack of transparency in government actions. In particular, it pointed to mystery surrounding the sale of iron ore stockpiles and the alleged disappearance of some import and export permits. These matters are now being investigated by the Liberian authorities and the IMF has called for their findings to be made public. The IMF also said it was crucial that the Central Bank of Liberia be strengthened, the national budget be effectively managed and a sound economic basis built to allow the country's large external debt to be addressed. "The IMF team stands ready to assist the (Liberian) authorities in strengthening the areas mentioned," said the report. "The team agreed with the (Liberian) authorities that the period until elections and the inauguration of a new government will pose exceptional challenges to fiscal management, and expresses its willingness to provide...continued support."
Slowdown hits US factory growth

US industrial production increased for the 21st month in a row in February, but at a slower pace than in January, official figures show.

The Institute for Supply Management (ISM) index fell to 55.3 in February, from an adjusted 56.4 in January. Although the index was lower than in January, the fact that it held above 50 shows continued growth in the sector. "February was another good month in the manufacturing sector," said ISM survey chairman Norbert Ore.

"While the overall rate of growth is slowing, the overall picture is improving as price increases and shortages are becoming less of a problem. Exports and imports remain strong," he said. Analysts had expected February's figure to be stronger than January's and come in at 57. Of the 20 manufacturing sectors surveyed by ISM, 13 reported growth. They included the textiles, apparel, tobacco, chemicals and transportation sectors. The ISM's index of national manufacturing activity is compiled from the responses of purchasing executives at more than 400 industrial companies.
Lufthansa flies back to profit

German airline Lufthansa has returned to profit in 2004 after posting huge losses in 2003.

In a preliminary report, the airline announced net profits of 400m euros ($527.61m; £274.73m), compared with a loss of 984m euros in 2003. Operating profits were at 380m euros, ten times more than in 2003. Lufthansa was hit in 2003 by tough competition and a dip in demand following the Iraq war and the killer SARS virus. It was also hit by troubles at its US catering business. Last year, Lufthansa showed signs of recovery even as some European and US airlines were teetering on the brink of bankruptcy. The board of Lufthansa has recommended paying a 2004 dividend of 0.30 euros per share. In 2003, shareholders did not get a dividend. The company said that it will give all the details of its 2004 results on 23 March.
Japanese growth grinds to a halt

Growth in Japan evaporated in the three months to September, sparking renewed concern about an economy not long out of a decade-long trough.

Output in the period grew just 0.1%, an annual rate of 0.3%. Exports - the usual engine of recovery - faltered, while domestic demand stayed subdued and corporate investment also fell short. The growth falls well short of expectations, but does mark a sixth straight quarter of expansion.

The economy had stagnated throughout the 1990s, experiencing only brief spurts of expansion amid long periods in the doldrums. One result was deflation - prices falling rather than rising - which made Japanese shoppers cautious and kept them from spending.

The effect was to leave the economy more dependent than ever on exports for its recent recovery. But high oil prices have knocked 0.2% off the growth rate, while the falling dollar means products shipped to the US are becoming relatively more expensive.

The performance for the third quarter marks a sharp downturn from earlier in the year. The first quarter showed annual growth of 6.3%, with the second showing 1.1%, and economists had been predicting as much as 2% this time around. "Exports slowed while capital spending became weaker," said Hiromichi Shirakawa, chief economist at UBS Securities in Tokyo. "Personal consumption looks good, but it was mainly due to temporary factors such as the Olympics. "The amber light is flashing." The government may now find it more difficult to raise taxes, a policy it will have to implement when the economy picks up to help deal with Japan's massive public debt.
France Telecom gets Orange boost

Strong growth in subscriptions to mobile phone network Orange has helped boost profits at owner France Telecom.

Orange added more than five million new customers in 2004, leading to a 10% increase in its revenues. Increased take-up of broadband telecoms services also boosted France Telecom's profits, which showed a 5.5% rise to 18.3bn euros ($23.4bn; £12.5bn). France Telecom is to spend 578m euros on buying out minority shareholders in data services provider Equant.

France Telecom, one of the world's largest telecoms and internet service providers, saw its full-year sales rise 2.2% to 47.2bn euros in 2004.

Orange enjoyed strong growth outside France and the United Kingdom - its core markets - swelling its subscriber base to 5.4 million. France Telecom's broadband customers also increased, rising to 5.1 million across Europe by the end of the year. The firm said it had met its main strategic objectives of growing its individual businesses and further reducing its large debt. An ill-fated expansion drive in the late 1990s saw France Telecom's debt soar to 72bn euros by 2002. However, this has now been reduced to 43.9bn euros. "Our results for 2004 allow us to improve our financial structure while focusing on the innovation that drives our strategy," said chief executive Thierry Breton.

Looking ahead, the company forecast like-for-like sales growth of between 3% and 5% over the next three years. France Telecom is consolidating its interest in Equant, which provides telecoms and data services to businesses. Subject to approval by shareholders of the two firms, it will buy the shares in Equant it does not already own. France Telecom said it would fund the deal by selling an 8% stake in telephone directory company PagesJaunes.
Glaxo aims high after profit fall

GlaxoSmithKline saw its profits fall 9% last year to £6.2bn ($11.5bn), but Europe's biggest drugmaker says a recovery during 2005 is on the way.

Cheap copies of its drugs, particularly anti-depressants Paxil and Wellbutrin, and a weak dollar had hit profits, but global sales were up 1% in 2004. The firm is confident its new drug pipeline will deliver profits despite the failure of an obesity drug. Chief executive Jean-Pierre Garnier said it had been a "difficult year".

In early afternoon trade in London the company share price was down 1% at 1218 pence. Mr Garnier said the company had absorbed over £1.5bn of lost sales to generics but still managing to grow the business. "The continuing success of our key products means we can now look forward to a good performance in 2005," he said. "2005 will also be an important year in terms of research and development pipeline progress." However, the firm discontinued development of an experimental treatment for obesity, known as '771, after disappointing clinical trial results. Glaxo is relying on new treatments for conditions such as cancer, diabetes, depression, HIV/AIDS and allergies to lift the pace of sales growth after several disappointing years.
Japan bank shares up on link talk

Shares of Sumitomo Mitsui Financial (SMFG), and Daiwa Securities jumped amid speculation that two of Japan's biggest financial companies will merge.

Financial newspaper Nihon Keizai Shimbun claimed that the firms will join up next year and already have held discussions with Japanese regulators. The firms denied that they are about to link up, but said they are examining ways of working more closely together. SMFG shares climbed by 2.7% to 717,000, and Daiwa added 5.3% to 740 yen.

Combining SMFG, Japan's third-biggest lender, and Daiwa, the country's second-largest brokerage firm, would create a company with assets of more than $1,000bn (£537bn). SMFG President Yoshifumi Nishikawa said that the companies needed to bolster their businesses. "Both companies need to strengthen retail and other operations," he said, adding that "it's an issue we have in common". Daiwa said that "although it is true that the two groups have been engaging in various discussions to enhance cooperation, there are no plans to enter into negotiations to consolidate the two businesses". Analysts said that consolidation in Japan's financial sector was likely to continue and that it was likely to have a positive impact on earnings. "Cross-selling opportunities between banks and brokers are increasing thanks to deregulation, so we can expect the relationship to get even stronger," said Heronry Nozaki, an analyst at NikkoCitigroup. The merger "would be a good move," he added.
Ericsson sees earnings improve

Telecoms equipment supplier Ericsson has posted a rise in fourth quarter profits thanks to clients like Deutsche Telekom upgrade their networks.

Operating profit in the three months to 31 December was 9.5bn kronor (£722m; $1.3bn) against 6.3bn kronor last year. Shares tumbled, however, as the company reported a profit margin of 45.6%, less than the 47.3% forecast by analysts and down from 47.1% in the third quarter. Ericsson shares dropped 5.9% to 20.7 kronor in early trading on Thursday. However, the company remained optimistic about its earnings outlook after sales in the fourth quarter rose 9% to 39.4bn kronor. "Long-term growth drivers of the industry remain solid," Ericsson said in a statement.

Chief executive Carl-Henric Svanberg explained that about "27% of the world's population now has access to mobile communications". "This is exciting for a company with a vision of an all-communicating world," he added. Mr Svanberg, however, warned that the extra demand that had driven 2004 sales had already dissipated and it was "business as usual". He added that sales in the first three months of 2005 would be subject to "normal seasonality". For the whole of 2004, Ericsson returned a net profit of 19bn kronor, compared with a loss of 10.8bn kronor in 2003. Sales climbed to 131.9 billion kronor from 117.7bn kronor in 2003.
Nigeria to boost cocoa production

The government of Nigeria is hoping to triple cocoa production over the next three years with the launch of an ambitious development programme.

Agriculture Minister Adamu Bello said the scheme aimed to boost production from an expected 180,000 tonnes this year to 600,000 tonnes by 2008. The government will pump 154m naira ($1.1m; £591,000) into subsidies for farming chemicals and seedlings. Nigeria is currently the world's fourth-largest cocoa producer.

Cocoa was the main export product in Nigeria during the 1960s. But with the coming of oil, the government began to pay less attention to the cocoa sector and production began to fall from a peak of about 400,000 tonnes a year in 1970. At the launch of the programme in the south-western city of Ibadan, Mr Bello explained that an additional aim of the project is to encourage the processing of cocoa in the country and lift local consumption. He also announced that 91m naira of the funding available had been earmarked for establishing cocoa plant nurseries. The country could be looking to emulate rival Ghana, which produced a bumper crop last year. However, some farmers are sceptical about the proposals. "People who are not farming will hijack the subsidy," said Joshua Osagie, a cocoa farmer from Edo state told Reuters. "The farmers in the village never see any assistance," he added.

At the same time as Nigeria announced its new initiative, Ghana - the world's second largest cocoa exporter - announced revenues from the industry had broken new records. The country saw more than $1.2bn-worth of the beans exported during 2003-04. Analysts said high tech-production techniques and crop spraying introduced by the government led to the huge crop, pushing production closer to levels seen in the 1960s when the country was the world's leading cocoa grower.
Train strike grips Buenos Aires

A strike on the Buenos Aires underground has caused traffic chaos and large queues at bus stops in the Argentine capital.

Tube workers walked out last week demanding a 53% pay rise and in protest against the installation of automatic ticket machines. Metrovias, the private firm which runs the five tube lines in the city, has offered an 8% increase in wages. The firm promised no jobs would be lost as a result of new ticket machines. It said it would put this commitment on paper.

Underground staff have warned they will continue with the protests until the management put an acceptable offer on the table. The Argentine Work Ministry has been mediating in the conflict and it could call an "obligatory conciliation", which would force both sides to find a solution and put an end to the conflict. Some tube commuters have not hidden their frustration at the ongoing strike and have broken the windows of the underground trains, according to the local press. "We are taken as hostages. I don't know who is right, but the harm ones are us," said accountant Jose Lopez.
Bargain calls widen Softbank loss

Japanese communications firm Softbank has widened losses after heavy spending on a new cut-rate phone service.

The service, launched in December and dubbed "Otoku" or "bargain", has had almost 900,000 orders, Softbank said. The firm, a market leader in high-speed internet, had an operating loss for the three months to December of 7.5bn yen ($71.5m; £38.4m). But without the Otoku marketing spend it would have made a profit - and expects to move into the black in 2006. The firm did not give a figure for the extent of profits it expected to make next year. It was born in the 1990s tech boom, investing widely and becoming a fast-rising star, till the end of the tech bubble hit it hard. Its recent return to a high profile came with the purchase of Japan Telecom, the country's third-biggest fixed-line telecoms firm. The acquisition spurred its broadband internet division to pole position in the Japanese market, with more than 5.1 million subscribers at the end of December.
WMC profits up amid bid criticism

Australian mining firm WMC Resources has seen a fivefold rise in profits while continuing to be the target of a hostile takeover bid.

WMC said it made net profits of 1.33bn Australian dollars ($1bn; £550m) in 2004, up from A$246bn the year before. It is currently arguing against an offer from Swiss Xstrata, which the firm raised to A$8.4bn last week after WMC said it was an undervaluation. Now reports say that the Australian government is against the deal.

Trade Minister Mark Vaile has said that the bid may be "against the national interest". Mr Vaile, who was quoted in the Australian Financial Review, compared Xstrata's attempt to take over WMC to a similar bid by oil giant Shell for Australia's Woodside Petroleum in 2001. The bid was thrown out by Treasurer Peter Costello on national interest grounds. WMC's interests in uranium deposits were a contributing factor, Mr Vaile said. WMC itself, however, has no objection in principle to being bought out, having spun off its aluminium operations in 2002 to make itself a more tempting target - as long as the price is right. Its stellar performance in 2004 has been built on sky-high prices for metals. Copper and nickel in particular have been in high demand thanks to China's booming economy, which expanded more than 9% in each of the past two years. Nickel prices rose 43% during the year, with copper up 36%.
Qantas sees profits fly to record

Australian airline Qantas has posted a record fiscal first-half profit thanks to cost-cutting measures.

Net profit in the six months ending 31 December rose 28% to A$458.4m ($357.6m; £191m) from a year earlier. Analysts expected a figure closer to A$431m. Qantas shares fell almost 3%, however, after it warned that earnings growth would slow in the second half. Sales will dip by at least A$30m after the Indian ocean tsunami devastated many holiday destinations, Qantas said.

"The tsunami affected travel patterns in ways that we were a bit surprised about," chief executive Geoff Dixon explained. "It certainly affected Japanese travel into Australia. As soon as the tsunami hit we saw ... a lessening with bookings for Australia." Higher fuel costs also are expected to eat into earnings in coming months. "We don't have as much hedging benefit in the second half as we had in the first," said chief financial officer Peter Gregg. Qantas is facing increased pressure from rivals such as low-cost carrier Virgin Blue and the Australian government is in talks about whether to allow Singapore Airlines to fly between the Australia and the US - one of Qantas' key routes.

Even so, the firm is predicting that full-year earnings will increase from the previous 12 months. Analysts have forecast full-year profit will rise about 11% to around A$720 million ($563 million). Qantas boss Mr Dixon also said he would be reviewing the group's cost-cutting measures. During the first six months of the fiscal year, Qantas made savings of A$245m, and is on track to top its target of A$500m for the full year. Last month, the company warned it may transfer as many as 7,000 jobs out Australia, with Mr Dixon quoted as saying that the carrier could no longer afford to remain "all-Australian".
Iraq to invite phone licence bids

Iraq is to invite bids for two telephone licences, saying it wants to significantly boost nationwide coverage over the next decade.

Bids have been invited from local, Arab and foreign companies, Iraq's Ministry of Communications said. The winner will work in partnership with the Iraqi Telecommunications and Post Company (ITPC). The firms will install and operate a fixed phone network, providing voice, fax and internet services.

The ministry said that it wanted to increase Iraq's "very low telephone service penetration rate from about 4.5% today to about 25% within 10 years." It also hopes to develop a "highly visible and changeable telecommunication sector". Details of the bidding and tender process will be published on the ministry's website on 9 February. It also is planning a road-show for investors in Amman, Jordan. The ministry said it would base its selection on criteria including the speed of implementation, tariff rates, coverage, and the firm's experience and financial strength.
Brazil buy boosts Belgium's Inbev

Belgian brewing giant Inbev has seen its profits soar thanks to its acquisition of Brazil's biggest beer firm Ambev last year.

Inbev, which makes Stella Artois, said pre-tax profits for 2004 rose 56% to 1.16bn euros ($1.5bn; £800m), and said it expected solid growth in 2005. The performance comes on sales up 21% at 8.6bn euros. The firm, formerly Interbrew, became the world's biggest brewer by volume when it bought Ambev in August 2004. The acquisition meant its sales by volume grew 57% in 2004, with four months of Ambev sales accounting for almost all of the increase. US beermaker Anheuser-Busch sells less beer by volume than Inbev but is bigger in terms of the value of its sales. Continuing demand for Inbev's products in the South American markets where its Brazilian arm is most popular means it expects to keep boosting its turnover. "It's the Brazil business that's doing it," said ING analyst Gerard Rijk of Inbev's strong performance. Ambev boosted its share of Brazil's beer market from 62% at the end of 2003 to more than 68% by December 2004, Inbev reported. In contrast, Inbev's European business saw volume sales fall 2.5%, although Central and Eastern European sales rose 12%. Overall, net profits were up 42% to 719m euros.
Salary scandal in Cameroon

Cameroon says widespread corruption in its finance ministry has cost it 1bn CFA francs ($2m; £1m) a month.

About 500 officials are accused of either awarding themselves extra money or claiming salaries for "non-existent" workers. Prime Minister Ephraim Inoni, who vowed to tackle corruption when he came to office last year, said those found guilty would face tough punishments. The scam is believed to have begun in 1994.

The prime minister's office said the alleged fraud was uncovered during an investigation into the payroll at the ministry. In certain cases, staff are said to have lied about their rank and delayed their retirement in order to boost their earnings. The prime minister's office said auditors had found "irregularities in the career structure of certain civil servants". It added that the staff in question "appear to have received unearned salaries, boosting the payroll".

Fidelis Nanga, a journalist based in the Cameroon capital Yaounde, said the government was considering taking criminal action against those found guilty and forcing them to repay any money owed. "The prime minister has given instructions for exemplary penalties to be meted out against the accused and their accomplices if found guilty," he told the BBC's Network Africa programme.

Mr Inoni launched an anti-corruption drive in December after foreign investors criticised a lack of transparency in the country's public finances. In one initiative designed to improve efficiency, civil servants who arrived late for work were locked out of their offices. The government now intends to carry out an audit of payrolls at all other government ministries. In a report compiled by anti-corruption body Transparency International in 2003, graft was said to be "pervasive" in Cameroon.
Bank set to leave rates on hold

UK interest rates are set to remain on hold at 4.75% following the latest meeting of the Bank of England.

The Bank's rate-setting committee has put up rates five times in the past year but rates have been on hold since September amid signs of a slowdown. Economic growth slowed in the previous quarter, as manufacturing output fell, while consumer confidence has slipped. There is also growing evidence that the previously booming UK housing market is now cooling.

House prices fell 0.4% in October, according to the Nationwide, their biggest monthly fall since February 2001. Last month, Bank of England governor Mervyn King said that the economy had hit a "softer patch" after rapid economic growth in the first half of 2004. Richard Jeffrey, chief economist at Bridgewell Securities, said it was very unlikely that the Bank of England would put rates up again this time around. "There have been sufficient signs in the economy of a slowdown to stay the Bank of England's hand," he told BBC Radio 4's Today programme. However, Mr Jeffrey said he believed the slowdown in economic activity was temporary and it was dangerous to assume that rates had peaked. "I still think interest rates are going up," he said. "We are not out of the woods."
Winter freeze keeps oil above $50

Oil prices carried on rising on Wednesday after cold weather on both sides of the North Atlantic pushed US crude prices to four-month highs.

Freezing temperatures and heavy snowfalls took crude oil prices past $50 a barrel on Tuesday for the first time since November. Declines in the dollar have also contributed to the rising oil price. US crude was trading at $51.39 at 0710 GMT in Asian electronic trade on Wednesday. A barrel of US crude oil closed up $2.80 at $51.15 in New York on Tuesday. Opec members said on Tuesday that, given such high prices, the cartel saw no reason to cut its output.

Although below last year's peak of $55.67 a barrel, which was reached in October, prices are now well above 2004's average of $41.48. Brent crude also rose in London trading, adding $1.89 to $48.62 at the close.

Much of western Europe and the north east of America has been shivering under unseasonably low temperatures in recent days. The decline in the US dollar to a five-week low against the euro has also served to inflate prices. "The primary factor is the weak dollar," said Victor Shum, a Singapore-based analyst with Purvin and Gertz. Expectations that a rebound in the dollar would halt the oil price rise were not immediately borne out on Wednesday morning, as oil prices carried on upwards as the dollar strengthened against the euro, the pound and the yen.

Several Opec members said on Tuesday that a cut in production was unlikely, citing rising prices and strong demand for oil from Asia. "I agree that we do not need to cut supply if the prices are as much as this," Fathi Bin Shatwan, Libya's oil minister, told Reuters. "I do not think we need to cut unless the prices are falling below $35 a barrel," he added.
German jobless rate at new record

More than 5.2 million Germans were out of work in February, new figures show.

The figure of 5.216 million people, or 12.6% of the working-age population, is the highest jobless rate in Europe's biggest economy since the 1930s. The news comes as the head of Germany's panel of government economic advisers predicted growth would again stagnate. Speaking on German TV, Bert Ruerup said the panel's earlier forecast of 1.4% was too optimistic and warned growth would be just 1% in 2005.

The German government is trying to tackle the stubbornly-high levels of joblessness with a range of labour market reforms. At their centre is the "Hartz-IV" programme introduced in January to shake up welfare benefits and push people back into work - even if some of the jobs are heavily subsidised. The latest unemployment figures look set to increase the pressure on the government. Widely leaked to the German newspapers a day in advance, they produced screaming headlines criticising Chancellor Gerhard Schroeder's Social Democrat-Green Party administration. Mr Schroeder had originally come into office promising to halve unemployment.

Still, some measures suggest the picture is not quite so bleak. The soaring official unemployment figure follows a change in the methodology which pushed up the jobless rate by more than 500,000 in January. Adjusted for seasonal changes, the overall unemployment rate is 4.875 million people or 11.7%, up 0.3 percentage points from the previous month. Using the most internationally-accepted methodology of the International Labour Organisation (ILO), Germany had 3.97 million people out of work in January. And ILO-based figures also suggest that 14,000 new net jobs were created that month, taking the number of people employed to 38.9 million. The ILO defines an unemployed person as someone who in the previous four weeks had actively looked for work they could take up immediately.
BMW reveals new models pipeline

BMW is preparing to enter the market for car-style people carriers, the firm's chief has told BBC News.

Speaking at a BMW event ahead of the Geneva motor show, Helmut Panke predicted demand for such crossover vehicles would soar in Europe. In contrast, he said, the popularity of van-style seven-seat vehicles and traditional saloon cars would fade. "Customers are moving out of the mini-van (and) traditional concepts are not as attractive anymore," he said. "We have decided that BMW will enter the [crossover] segment," he said in the clearest indication yet about the car maker's intentions.

Mr Panke praised the Honda Accura as the "best execution" yet of a crossover vehicle. "We have decided that the BMW brand will enter the segment," he said.

A decision on just how BMW will manage its entry into the new market is due in the first half of 2005. Typically it takes about three years from when a decision is taken before a new model hits the streets, Mr Panke said, implying that a BMW crossover could be on the market by 2008. The coming switch is driven in part by the need for successful carmakers to stay aware of trans-Atlantic differences in the car market, Mr Panke insisted. While in the US drivers tend to prefer sports utility vehicles (SUVs), such as the BMW X5 and its sibling X3, in Europe demand for crossover vehicles is likely to be considerable, Mr Panke said. "There's a growing market here," he said. "We are going to go that way."
Weak dollar trims Cadbury profits

The world's biggest confectionery firm, Cadbury Schweppes, has reported a modest rise in profits after the weak dollar took a bite out of its results.

Underlying pre-tax profits rose 1% to £933m ($1.78bn) in 2004, but would have been 8% higher if currency movements were stripped out. The owner of brands such as Dairy Milk, Dr Pepper and Snapple generates more than 80% of its sales outside the UK. Cadbury said it was confident it would hit its targets for 2005. "While the external commercial environment remains competitive, we are confident that we have the strategy, brands and people to deliver within our goal ranges in 2005," said chief executive Todd Stitzer.

The modest profit rise had been expected by analysts after the company said in December that the poor summer weather had hit soft drink sales in Europe.

Cadbury said its underlying sales were up by 4% in 2004. Growth was helped by its confectionery brands - including Cadbury, Trident and Halls - which enjoyed a "successful" year, with like-for-like sales up 6%. Drinks sales were up 2% with strong growth in US carbonated soft drinks, led by Dr Pepper and diet drinks, offset by the weaker sales in Europe. Cadbury added that its Fuel for Growth cost-cutting programme had saved £75m in 2004, bringing total cost savings to £100m since the scheme began in mid-2003. The programme is set to close 20% of the group's factories and shed 10% of the workforce. Cadbury Schweppes employs more than 50,000 people worldwide, with about 7,000 in the UK.
Oil prices fall back from highs

Oil prices retreated from four-month highs in early trading on Tuesday after producers' cartel Opec said it was now unlikely to cut production.

Following the comments by acting Opec secretary general Adnan Shihab-Eldin, US light crude fell 32 cents to $51.43 a barrel. He said that high oil prices meant Opec was unlikely to stick to its plan to cut output in the second quarter. In London, Brent crude fell 32 cents to $49.74 a barrel.

Opec members are next meeting to discuss production levels on 16 March. On Monday, oil prices rose for a sixth straight session, reaching a four-month high as cold weather in the US threatened stocks of heating oil. US demand for heating oil was predicted to be about 14% above normal this week, while stocks were currently about 7.5% below the levels of a year ago. Cold weather across Europe has also put upward pressure on crude prices.
Winn-Dixie files for bankruptcy

US supermarket group Winn-Dixie has filed for bankruptcy protection after succumbing to stiff competition in a market dominated by Wal-Mart.

Winn-Dixie, once among the most profitable of US grocers, said Chapter 11 protection would enable it to successfully restructure. It said its 920 stores would remain open, but analysts said it would most likely off-load a number of sites. The Jacksonville, Florida-based firm has total debts of $1.87bn (£980m). In its bankruptcy petition it listed its biggest creditor as US foods giant Kraft Foods, which it owes $15.1m.

Analysts say Winn-Dixie had not kept up with consumers' demands and had also been burdened by a number of stores in need of upgrading. A 10-month restructuring plan was deemed a failure, and following a larger-than-expected quarterly loss earlier this month, Winn-Dixie's slide into bankruptcy was widely expected. The company's new chief executive Peter Lynch said Winn-Dixie would use the Chapter 11 breathing space to take the necessary action to turn itself around. "This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores," he said. Yet Evan Mann, a senior bond analyst at Gimme Credit, said Mr Lynch's job would not be easy, as the bankruptcy would inevitably put off some customers. "The real big issue is what's going to happen over the next one or two quarters now that they are in bankruptcy and all their customers see this in their local newspapers," he said.
Malaysia lifts Islamic bank limit

Malaysia's central bank is to relax restrictions on foreign ownership to encourage Islamic banking.

Banks in Malaysia will now be able to sell up to 49% of their Islamic banking units, while the limit on other kinds of bank remains at 30%. RHB, Malaysia's third-biggest lender, is already scouting for a foreign partner for its new Islamic banking unit, the firm told Reuters. The moves put Malaysia ahead of a 2007 deadline to open up the sector. The country's deal to join the World Trade Organisation set that year as a deadline for liberalisation of Islamic banking. Also on Tuesday, the central bank released growth figures showing Malaysia's economy expanded 7.1% in 2004. But growth slowed sharply in the fourth quarter to 5.6%, and the central bank said it expected 6% expansion in 2005.

Malaysia changed the law to allow Islamic banking in 1983. It has granted licences to three Middle Eastern groups, which - along with local players - mean there are eight fully-operational Islamic banking groups in the country. Islamic banks offer services which permit modern banking principles while sticking to Islamic law's ban on the payment of interest. Most of the Malays which make up half the country's population are Muslims.
Alfa Romeos 'to get GM engines'

Fiat is to stop making six-cylinder petrol engines for its sporty Alfa Romeo subsidiary, unions at the Italian carmaker have said.

The unions claim Fiat is to close the Fiat Powertrain plant at Arese near Milan and instead source six-cylinder engines from General Motors. Fiat has yet to comment on the matter, but the unions say the new engines will be made by GM in Australia. The news comes a week after GM pulled out of an agreement to buy Fiat. GM had to pay former partner Fiat 1.55bn euros ($2bn; £1.1bn) to get out of a deal which could have forced it to buy the Italian carmaker outright. Fiat and GM also ended their five-year alliance and two joint ventures in engines and purchasing, but did agree to continue buying each other's engines.

"Powertrain told us today that Alfa Romeo engines will no longer be made in Arese," said union leader Vincenzo Lilliu, as reported by the Reuters news agency. "The assembly line will be dismantled and the six-cylinder Alfa Romeo motor will be replaced with an engine GM produces in Australia." Reuters also said that Mr Lilliu and other union bosses shouted insults at Fiat chairman Luca di Montezemolo, following a meeting on Tuesday regarding the future of the Arese plant. The unions said the end of engine production at the facility would mean the loss of 800 jobs. All Alfa Romeo models can be bought with a six-cylinder engine - the 147, 156, 156 Sportwagon, 166, GTV, GT and Spider.
Bank voted 8-1 for no rate change

The decision to keep interest rates on hold at 4.75% earlier this month was passed 8-1 by the Bank of England's rate-setting body, minutes have shown.

One member of the Bank's Monetary Policy Committee (MPC) - Paul Tucker - voted to raise rates to 5%. The news surprised some analysts who had expected the latest minutes to show another unanimous decision. Worries over growth rates and consumer spending were behind the decision to freeze rates, the minutes showed. The Bank's latest inflation report, released last week, had noted that the main reason inflation might fall was weaker consumer spending.

However, MPC member Paul Tucker voted for a quarter point rise in interest rates to 5%. He argued that economic growth was picking up, and that the equity, credit and housing markets had been stronger than expected.

The Bank's minutes said that risks to the inflation forecast were "sufficiently to the downside" to keep rates on hold at its latest meeting. However, the minutes added: "Some members noted that an increase might be warranted in due course if the economy evolved in line with the central projection". Ross Walker, UK economist at Royal Bank of Scotland, said he was surprised that a dissenting vote had been made so soon. He said the minutes appeared to be "trying to get the market to focus on the possibility of a rise in rates". "If the economy pans out as they expect then they are probably going to have to hike rates." However, he added, any rate increase is not likely to happen until later this year, with MPC members likely to look for a more sustainable pick up in consumer spending before acting.
Crude oil prices back above $50

Cold weather across parts of the United States and much of Europe has pushed US crude oil prices above $50 a barrel for the first time in almost three months.

Freezing temperatures and heavy snowfall have increased demand for heating fuel in the US, where stocks are low. Fresh falls in the value of the dollar helped carry prices above the $50 mark for the first time since November. A barrel of US crude oil closed up $2.80 to $51.15 in New York on Tuesday. Opec members said on Tuesday that it saw no reason to cut its output.

Although below last year's peak of $55.67 a barrel, which was reached in October, prices are now well above 2004's average of $41.48.

Brent crude also rose in London trading, adding $1.89 to $48.62 at the close. Much of western Europe and the north east of America has been shivering under unseasonably low temperatures in recent days. The decline in the US dollar to a five-week low against the euro has also served to inflate prices. "The dollar moved sharply overnight and oil is following it," said Chris Furness, senior market strategist at 4Cast. "If the dollar continues to weaken, oil will be obviously higher."

Several Opec members said a cut in production was unlikely, citing rising prices and strong demand for oil from Asia. "I agree that we do not need to cut supply if the prices are as much as this," Fathi Bin Shatwan, Libya's oil minister, told Reuters. "I do not think we need to cut unless the prices are falling below $35 a barrel," he added. Opec closely watches global stocks to ensure that there is not an excessive supply in the market. The arrival of spring in the northern hemisphere will focus attention on stockpiles of US crude and gasoline, which are up to 9% higher than at this time last year. Heavy stockpiles could help force prices lower when demand eases.
Macy's owner buys rival for $11bn

US retail giant Federated Department Stores is to buy rival May Department Stores for $11bn (£5.7bn).

The deal will bring together famous stores like Macy's, Bloomingdale's and Marshall Field's, creating the largest department store chain in the US. The combined firm will operate about 1,000 stores across the US, with combined annual sales of $30bn. The two companies, facing competition from the likes of Wal-Mart, tried to merge two years ago but talks failed. Sources familiar with the deal said that negotiations between the two companies sped up after May's chairman and chief executive Gene Kahn resigned in January. As part of the deal, Federated - owner of Macy's and Bloomingdale's - will assume $6bn of May's debt, bringing the deal's total value to $17bn. Directors at both companies have approved the deal and it is expected to conclude by the third quarter of this year.

May has struggled to compete against larger department store groups such as Federated and other retailers such as Wal-Mart. Federated expects the merger to boost earnings from 2007 but the deal will cost it $1bn in one-off charges.

"We have taken the first step toward combining two of the best department store companies in America, creating a new retail company with truly national scope and presence," said Terry Lundgren, Federated's chairman. Some analysts see the merger as a rescue deal for May. "Without this deal May would have been, to put it bluntly, washed up," said Kurt Barnard, president of Barnard's Retail Consulting Group. Federated has annual sales of $15.6bn, while May's yearly sales are $14.4bn.
Industrial revival hope for Japan

Japanese industry is growing faster than expected, boosting hopes that the country's retreat back into recession is over.

Industrial output rose 2.1% - adjusted for the time of year - in January from a month earlier. At the same time, retail sales picked up faster than at any time since 1997. The news sent Tokyo shares to an eight-month high, as investors hoped for a recovery from the three quarters of contraction seen from April 2004 on. The Nikkei 225 index ended the day up 0.7% at 11,740.60 points, with the yen strengthening 0.7% against the dollar to 104.53 yen. Weaker exports, normally the engine for Japan's economy in the face of weak domestic demand, had helped trigger a 0.1% contraction in the final three months of last year after two previous quarters of shrinking GDP. Only an exceptionally strong performance in the early months of 2004 kept the year as a whole from showing a decline. The output figures brought a cautiously optimistic response from economic officials. "Overall I see a low risk of the economy falling into serious recession," said Bank of Japan chief Toshihiko Fukui, despite warning that other indicators - such as the growth numbers - had been worrying.

Within the overall industrial output figure, there were signs of a pullback from the export slowdown. Among the best-performing sectors were key overseas sales areas such as cars, chemicals and electronic goods. With US growth doing better than expected the picture for exports in early 2005 could also be one of sustained demand. Electronics were also one of the keys to the improved domestic market, with products such as flat-screen TVs in high demand during January.
Khodorkovsky ally denies charges

A close associate of former Yukos boss Mikhail Khodorkovsky has told a court that fraud charges levelled against him are "false".

Platon Lebedev has been on trial alongside Mr Khodorkovsky since June in a case centring around the privatisation of a fertiliser firm. The pair claim they are being punished by the authorities for the political ambitions of Mr Khodorkovsky. Mr Lebedev said there were "absurd contradictions" in the case. Opening his defence, he said he could not see the legal basis of the charges he faced, which also include allegations of tax evasion. "To my embarrassment, I could not understand the file of complaints against me," he told a Moscow court. Mr Lebedev headed the Menatep group, the parent company of Yukos.

Mr Lebedev and Mr Khodorkovsky, who each face a possible 10 year jail sentence if convicted, will be questioned by a judge over the next few days. Mr Khodorkovsky began his testimony last week, telling the court that he objected to the way that the "running of a normal business has been presented as a work of criminal fiction". The charges are seen by supporters as politically motivated and part of a drive by Russian President Vladimir Putin to rein in the country's super-rich business leaders, the so-called oligarchs. Yukos has been presented with a $27.5bn (£13bn) tax demand by the Russian authorities and its key Yugansk division was auctioned off to part settle the bill. The company's effort to gain bankruptcy protection in the US - in a bid to win damages for the sale - were dismissed by a court in Texas.
Qatar and Shell in $6bn gas deal

Shell has signed a $6bn (£3.12bn) deal with the Middle Eastern sheikhdom of Qatar to supply liquid natural gas (LNG) to North America and Europe.

The UK-Dutch group will own 30% of the project, with Qatar's state oil firm owning the rest. The agreement is the latest in a string of deals reached by Qatar, which is trying to make itself a regional leader in natural gas. US oil giant ExxonMobil signed up for a $12.8bn deal earlier on Sunday. France's Total is expected to join the ExxonMobil scheme, dubbed Qatargas-2, on Monday, taking 5 million tonnes of LNG a year. ExxonMobil will be taking some 15 million tonnes each year for 25 years from the end of 2007 under the deal. Shell's agreement, under the name Qatargas-4, foresees the building of new facilities to handle 1.4 billion cubic feet of gas, and 7.8 million tonnes of LNG each year from 2011 onwards.
Verizon 'seals takeover of MCI'

Verizon has won a takeover battle for US phone firm MCI with a bid worth $6.8bn (£3.6bn), reports say.

The two firms are expected to seal the deal on Monday morning, according to news agency reports, despite what was thought to be a higher bid from Qwest. The US telecoms market is consolidating fast, with former long-distance giant AT&T being bought by former subsidiary SBC earlier this year for $16bn. MCI exited bankruptcy in April, having gone bust under previous name WorldCom. The bankruptcy followed its admission in 2002 that it illegally booked expenses and inflated profits.

Shareholders lost about $180bn when the company collapsed, while 20,000 workers lost their jobs. Former Worldcom boss Bernie Ebbers is currently on trial, accused of overseeing an $11bn fraud. Qwest has itself come under suspicion of sub-standard behaviour, paying the Securities and Exchange Commission $250m in October to settle charges that it manipulated its results to keep Wall Street happy.

MCI is the US's second-biggest long distance firm after AT&T. Consolidation in the US telecommunications industry has picked up in the past few months as companies look to cut costs and boost client bases. A merger between MCI and Verizon would be the fifth billion-dollar telecoms deal since October. Last week, SBC Communications agreed to buy its former parent and phone trailblazer AT&T for about $16bn. Buying MCI would give either Qwest or Verizon access to MCI's global network and business-based subscribers. The rationale is similar to the one underpinning SBC's AT&T deal. Verizon is by far the bigger company and has its own successful mobile arm - factors which may have swung the board in its favour since both suitors are offering a mixture of cash and shares.
Crossrail link 'to get go-ahead'

The £10bn Crossrail transport plan, backed by business groups, is to get the go-ahead this month, according to The Mail on Sunday.

It says the UK Treasury has allocated £7.5bn ($13.99bn) for the project and that talks with business groups on raising the rest will begin shortly. The much delayed Crossrail Link Bill would provide for a fast cross-London rail link. The paper says it will go before the House of Commons on 23 February.

A second reading could follow on 16 or 17 March. "We've always said we are going to introduce a hybrid Bill for Crossrail in the Spring and this remains the case," the Department for Transport said on Sunday. Jeremy de Souza, a spokesman for Crossrail, said on Sunday he could not confirm whether the Treasury was planning to invest £7.5bn or when the bill would go before Parliament.

However, he said some impetus may have been provided by the proximity of an election.

The new line would go out as far as Maidenhead, Berkshire, to the west of London, and link Heathrow to Canary Wharf via the City. Heathrow to the City would take 40 minutes, dramatically cutting journey times for business travellers, and reducing overcrowding on the tube. The line has the support of the Mayor of London, Ken Livingstone, business groups and the government, but there have been three years of arguments over how it should be funded. The Mail on Sunday's Financial Mail said the £7.5bn of Treasury money was earmarked for spending in £2.5bn instalments in 2010, 2011 and 2012.
Hariri killing hits Beirut shares

Shares in Solidere, the Lebanese company founded by assassinated former prime minister Rafik Hariri, fell 15% in renewed trading in Beirut.

The real estate firm, which dominates Lebanon's stock exchange, ended the day down at $8.08. Traders said there was some panic selling during Friday's session, the first since a three-day market closure to mourn the death of Mr Hariri. Beirut's benchmark BLOM stock index closed down 7.9% at 642.80.

Solidere, in which Mr Hariri was a major shareholder, was the major drag on the index. The company owns much of the property in central Beirut, which it restored and redeveloped following the end of Lebanon's bitter 15-year civil war. "Solidere should be above $10 but because of this disaster it is falling," said one trader. "If Solidere drops much lower I would consider it a buying opportunity. This is a very big company held by many Lebanese." Critics had accused Mr Hariri of using Lebanon's post-war reconstruction drive for his personal financial gain. But his assassination on Monday sent shudders through Lebanon's business community, which saw the billionaire tycoon as the country's best hope for economic revival. Solidere posted profits of $12.5m in the first half of 2004, and its shares had been gaining in recent months.
Small firms 'hit by rising costs'

Rising fuel and materials costs are hitting confidence among the UK's small manufacturers despite a rise in output, business lobby group the CBI says.

A CBI quarterly survey found output had risen by the fastest rate in seven years but many firms were seeing the benefits offset by increasing expenses. The CBI also found spending on innovation, training and retraining is forecast to go up over the next year. However, firms continue to scale back investment in buildings and machinery.

The CBI said companies are looking to the government to lessen the regulatory load and are hoping interest rates will be kept on hold. "Smaller manufacturers are facing an uphill struggle," said Hugh Morgan Williams, chair of the CBI's SME Council. "The manufacturing sector needs a period of long-term stability in the economy." The CBI found some firms managed to increase prices for the first time in nine years - but many said increases failed to keep up the rise in costs. Of the companies surveyed, 30% saw orders rise and 27% saw them fall. The positive balance of plus 3 compared with minus 10 in the previous survey. When firms were questioned on output volume, the survey returned a balance of plus 8 - the highest rate of increase for seven years - and rose to plus 11 when looking ahead to the next three months.
Buyers snap up Jet Airways' shares

Investors have snapped up shares in Jet Airways, India's biggest airline, following the launch of its much anticipated initial public offer (IPO).

The IPO for 17.3 million shares was fully sold within 10 minutes of opening, on Friday. Analysts expect Jet to raise at least 16.4bn rupees ($375m; £198m) from the offering. Interest in Jet's IPO has been fuelled by hopes for robust growth in India's air travel market.

The share offer, representing about 20% of Jet's equity, was oversubscribed, news agency Reuters reported. Jet, which was founded by London-based travel agent Naresh Goyal, plans to use the cash to buy new planes and cut its debt. The company has grown rapidly since it launched operations in 1993, overtaking state-owned flag carrier Indian Airlines. However, it faces stiff competition from rivals and low-cost carriers. Jet's IPO is the first in a series of expected share offers from Indian companies this year, as they move to raise funds to help them do business in a rapidly-growing economy.
House prices suffer festive fall

UK house prices fell 0.7% in December, according to figures from the Office of the Deputy Prime Minister.

Nationally, house prices rose at an annual rate of 10.7% in December, less than the 13.7% rise the previous month. The average UK house price fell from £180,126 in November to £178,906, reflecting recent Land Registry figures confirming a slowdown in late 2004. All major UK regions, apart from Northern Ireland, experienced a fall in annual growth during December.

December is traditionally a quiet month for the housing market because of Christmas celebrations. However, recent figures from the Land Registry - showing a big drop in sales between the last quarter of 2004 and the previous year - suggested the slowdown could be more than a seasonal blip. The volume of sales between October and December dropped by nearly a quarter from the same period in 2003, the Land Registry said. Although both the Office of the Deputy Prime Minister (ODPM) and the Land Registry figures point to a slowdown in the market, the most recent surveys from Nationwide and Halifax have indicated the market may be undergoing a revival. After registering falls at the back-end of 2004, Halifax said house prices rose by 0.8% in January and Nationwide reported a rise of 0.4% in the first month of the year.
Deutsche Boerse boosts dividend

Deutsche Boerse, the German stock exchange that is trying to buy its London rival, has said it will boost its 2004 dividend payment by 27%.

Analysts said that the move is aimed at winning over investors opposed to its bid for the London Stock Exchange. Critics of the takeover have complained that the money could be better used by returning cash to shareholders. Deutsche Boerse also said profit in the three months to 31 December was 120.7m euros ($158.8m; £83.3m). Sales climbed to 364.4m euros, lifting revenue for the year to a record 1.45bn euros.

Frankfurt-based Deutsche Boerse has offered £1.3bn ($2.48bn; 1.88bn euros) for the London Stock Exchange. Rival pan-European bourse Euronext is working also on a bid. Late on Monday, Deutsche Boerse said it would lift its 2004 dividend payment to 70 euro cents (£0.48; $0.98) from 55 euro cents a year earlier. "There is a whiff of a sweetener in there," Anais Faraj, an analyst at Nomura told the BBC's World Business Report. "Most of the disgruntled shareholders of Deutsche Boerse are complaining that the money that is being used for the bid could be better placed in their hands, paid out in dividends," Mr Faraj continued. Deutsche Boerse is "trying to buy them off in a sense", he said.
Yangtze Electric's profits double

Yangtze Electric Power, the operator of China's Three Gorges Dam, has said its profits more than doubled in 2004.

The firm has benefited from increased demand for electricity at a time when power shortages have hit cities and provinces across the country. As a hydroelectric-power generator it has not been hurt by higher coal costs. Net income jumped to 3bn yuan in 2004 ($365m; £190m), compared with 1.4bn yuan in 2003. Sales surged to 6.2bn yuan, from 3bn yuan a year earlier. The figures topped analysts expectations, even though the rate of growth has slowed from 2003. Analysts forecast that it is likely to decline further this year to a rate of expansion of closer to 20%.

Yangtze Electric has been expanding its output to meet demand driven by China's booming economy. The government has delayed the building of a number of power plants in an effort to rein in growth amid concerns that the economy may overheat. That has led to an energy crunch, with demand outstripping supply. Earlier this month, work was halted on an underground power station, and a supply unit on the Three Gorges Dam, as well as a power station on its sister Xiluodu dam because of environmental worries. A total of 30 large-scale projects have been halted across the country for similar reasons. The Three Gorges Dam project has led to more than half a million people being relocated and drawn criticism from environmental groups and overseas human rights activists. Its sister project, the Xiluodu Dam, is being built on the Jinshajiang - or "river of golden sand" as the upper reaches of the Yangtze are known.
French consumer spending rising

French consumers increased their spending by 1.5% in January, a figure which bodes well for the country's economic growth, figures revealed.

The National Statistic Institute (INSEE) added that consumer spending in January rose 3.8% on a year-on-year basis. Rising sales of household equipment were behind the increase. The INSEE also said that French consumer prices fell 0.6% in January, but were up 1.6% on an annual basis.

Despite the general increase in spending in January, French households bought fewer cars in January. According to the INSEE, car sales fell 2.8% in January, following a fall of 0.6% in December. But on a year-on-year basis, the sector still saw a sales increase of 6.5%. Consumer spending fuelled France's economic growth in the last quarter of 2004 and analysts expect that it will continue to support the economy. "It's a growth that will remain fragile and vulnerable to risks like a strong rise in long-term interest rates, tension in the oil price," Emmanuel Ferry, from Exane BNP Paribas told Reuters news agency.

Meanwhile in Italy, consumer confidence rose to its highest level since October 2004. Economic research group ISAE has said that Italian consumer confidence rose to 104.4 from 103.3, despite a slight deterioration in short-term sentiment.
GSK aims to stop Aids profiteers

One of the world's largest manufacturers of HIV/Aids drugs has launched an initiative to combat the smuggling of cheaper pills - supplied to poorer African countries - back into Europe for resale at far higher price.

The company, GlaxoSmithKline, is to alter the packaging and change the colour of the pills, currently provided to developing nations under a humanitarian agreement. It is estimated that drugs companies are losing hundreds of millions of dollars each year as a result of the diversion of their products in this way. This is a very sensitive area for the big drugs companies. They want to maintain their profits, but have been put under tremendous pressure to provide cheap anti-Aids drugs to the world's poorest nations.

The result is that drugs supplied to Africa are now more than thirty times cheaper than those sold in Europe; bringing these medicines within the reach of millions of HIV-positive Africans through their government's health care systems.

But the wide difference in price also means that there are big gains to be made from illegally diverting these cheaper drugs back into wealthier countries and re-selling them at a higher price. GlaxoSmithKline believes that by coating the pills destined for Africa in a red dye and adding new identification codes both onto the pills and on the packaging, then this trade can be substantially reduced. The company says that it will then be possible to identify specific distributors in Africa who have re-sold humanitarian drugs for profit, as well as those suppliers in Europe that have also been involved in the trade. Glaxo says distribution of the new-look drugs has already begun and that their chemical content is identical to those currently being sold in Europe.
Russia WTO talks 'make progress'

Talks on Russia's proposed membership of the World Trade Organisation (WTO) have been "making good progress" say those behind the negotiations.

But the chairman of the working party, Ambassador Stefan Johannesson of Iceland, warned that there was "still a lot of work has to be done". His comments came as President George W Bush said the US backed Russian entry. But he said for Russia to make progress the government must "renew a commitment to democracy and the rule of law". His comments come three days before he is due to meet President Vladimir Putin.

Russia has been waiting for a decade to join the WTO and hopes to finally become a member by early 2006. A decision could be reached in December, when the WTO's 148 current members gather for a summit in Hong Kong. That would allow an earliest date for membership of January 2006, if the Hong Kong summit gave its approval. While pinpointing several areas in which there are difficulties in the bilateral and multilateral work with Russia, the US said the meeting was "much more efficient than we've seen for some time". And Australia said it was "one of the best (meetings) we can recall in terms of substance". Mr Johannesson also said progress "on the bilateral market access side is accelerating". Sticking points to membership have included limits on foreign ownership in the telecommunications and life insurance businesses, as well as issues surrounding counterfeiting, piracy, and data protection. Some WTO members also dislike Russia's energy price subsidies, which competitors say give Russian businesses an unfair advantage.
Irish duo could block Man Utd bid

Irishmen JP McManus and John Magnier, who own a 29% stake in Manchester United, will reportedly reject any formal £800m offer for the club.

The Sunday Times and The Sunday Telegraph say they will oppose any formal £800m takeover bid from US tycoon Malcom Glazer. Mr Glazer got permission to look at the club's accounts last week. Irish billionaires Mr McManus and Mr Magnier are said to believe that an £800m bid undervalues club prospects.

Mr Magnier and Mr McManus, who hold their stake through their Cubic Expression investment vehicle have the power to block a bid. Mr Glazer's financial backers, including JP Morgan, the US investment bank have said they won't back a bid unless it receives backing from the owners of at least 75% of the club's shares. However, there has been much speculation that the Irish duo simply do not think the price offered - 300p a share - is high enough. Mr Glazer has been stalking the premier league football club since 2003.

Mr Magnier and Mr McManus issued a statement late on Friday saying that they remained "long-term investors" in Man Utd. The Sunday Telegraph says the board of Manchester United also considered a management buyout at just over 300p but did not go ahead with it.
Weak data buffets French economy

A batch of downbeat government data has cast doubt over the French economy's future prospects.

Official figures showed on Friday that unemployment was unchanged at 9.9% last month, while consumer confidence fell unexpectedly in October. At the same time, finance minister Nicolas Sarkozy warned that high oil prices posed a threat to French growth. "[Oil prices] will weigh on consumer spending in the short term, and potentially on confidence," he said. World oil prices have risen by more than 60% since the start of the year as production struggles to keep pace with soaring demand.

Analysts said French companies, keen to protect their profit margins at a time of rising energy costs, were reluctant to take on extra staff. "[The unemployment figures] show the main problem of the French economy: we have growth but without an improvement in employment," said Marc Touati, an economist at Natexis Banques Populaires. "Politicians must have the will and guts to solve structural unemployment with thorough reforms, otherwise in five or ten years, it will be too late." Obligatory employer contributions to worker welfare programmes mean that it costs more to hire staff in France than in many other European economies. Many economists have urged the government to stimulate employment by reducing non-wage payroll costs, and by scrapping restrictions on working hours. The French statistics agency, INSEE, expects the economy to grow by about 2.4% this year, buoyed by strong consumer spending and business investment. That is above the projected eurozone average of just above 2%.
M&S cuts prices by average of 24%

Marks & Spencer has cut prices in London and the regions by an average of 24%, according to research from a City investment bank.

Dresdner Kleinwort Wasserstein said: "In spite of the snow in the UK, it still feels very early to be cutting prices of spring merchandise." Stuart Rose, head of M&S, said last year its prices were too high. "We are bringing in ranges at new price points to compete against mid-market retailers like Next," said M&S.

Next is one of M&S's biggest competitors and the move may force it to lower prices. DrKW said the cuts are either to clear stock or could indicate a longer term "step change in pricing in certain areas" at M&S. "Either way, this cannot be good news for M&S' margin," it added. "We have brought in quite a lot of new clothing at new price points as part of Stuart Rose's strategy of quality, style -and price," said the M&S spokesman. Many analysts believe February is proving to be a difficult month for retailers and British Retail Consortium figures, due in a few weeks, are expected to reflect the tough trading environment. Separately, investment bank Goldman Sachs produced reseach showing that a basket of 35 M&S goods is now 11% above the high-street average, compared with 43% higher last year.

It has been a strange week for M&S, which on Tuesday received a statement from Philip Green, the billionaire Bhs owner, confirming he was not rebidding for the company. This was followed the same day by Mark Paulsmeier, a South African financier, issuing a press release saying his Paulsmeier Group was interested in M&S. A sudden spike in M&S's share price followed. However, an M&S spokesman said on Sunday it had no evidence that Mr Paulsmeier had lined up sufficient finance for a bid. He also said the Takeover Panel and the UK's financial watchdog the Financial Services Authority had been in touch with M&S at the beginning of the week to find out what it knew about the Paulsmeier developments.
US bank 'loses' customer details

The Bank of America has revealed it has lost computer tapes containing account details of more than one million customers who are US federal employees.

Several members of the US Senate are among those affected, who could now be vulnerable to identity theft. Senate sources say the missing tapes may have been stolen from a plane by baggage handlers. The bank gave no details of how the records disappeared, but said they had probably not been misused. Customers' accounts were being monitoring and account holders would be notified if any "unusual activity" was detected, bank officials said.

Bank of America said the tapes went missing in December while being shipped to a back-up data centre. "We, with federal law authorities, have done a very robust, thorough investigation on this and neither we nor they would make the statement lightly that we believe those tapes to be lost," Alexandra Tower, a spokeswoman for the North Carolina-based bank, told Time magazine. But although there was no evidence of criminal activity, the bank said, the Secret Service - a federal agency whose brief includes investigations of serious financial crime - is said to be looking into the loss. New York Senator Charles Schumer said he was told by the Senate Rules Committee that the tapes were probably stolen from a commercial plane. "Whether it is identity theft, terrorism, or other theft, in this new complicated world baggage handlers should have background checks and more care should be taken for who is hired for these increasingly sensitive positions," the Democrat senator said. Details of his Vermont colleague Pat Leahy's credit card account are among those missing, Senator Leahy's spokeswoman Tracy Schmaler said. About 900,000 military and civilian staff at the defence department are among the 1.2 million affected, according to a Pentagon spokesman.
Huge rush for Jet Airways shares

Indian airline Jet Airways' initial public offering was oversubscribed 16.2 times, bankers said on Friday.

Over 85% of the bids were at the higher end of the price range of 1,050-1,125 rupees ($24-$26). Jet Airways, a low-fare airline, was founded by London-based ex-travel agent Naresh Goya, and controls 45% of the Indian domestic airline market. It sold 20% of its equity or 17.2 million shares in a bid to raise up to $443m (£230.8m). The price at which its shares will begin trading will be agreed over the weekend, bankers said. "The demand for the IPO was impressive. We believe that over the next two years, the domestic aviation sector promises strong growth, even though fuel prices could be high," said Hiten Mehta, manager of merchant banking firm, Fortune Financial Services. India began to open up its domestic airline market - previously dominated by state-run carrier Indian Airlines - in the 1990s. Jet began flying in 1993 and now has competitors including Air Deccan and Air Sahara. Budget carriers Kingfisher Airlines and SpiceJet are planning to launch operations in May this year. Jet has 42 aircraft and runs 271 scheduled flights daily within India. It recently won government permission to fly to London, Singapore and Kuala Lumpur.
Bank payout to Pinochet victims

A US bank has said it will donate more than $8m to victims of former Chilean military ruler Augusto Pinochet's regime under a Madrid court settlement.

Riggs Bank will put money in a special fund to be managed by a Madrid-based charity, the Salvador Allende Foundation, which helps abused victims. The bank had been accused of illegally concealing Gen Pinochet's assets. More than 3,000 people were killed for political reasons under Gen Pinochet's regime, an official report says. Last month in a US court, Riggs Bank pleaded guilty to failing to report suspicious activity relating to accounts held by Gen Pinochet and the government of Equatorial Guinea. On that occasion, it was ordered to pay a fine of $16m. Gen Pinochet himself has never been put on trial for human rights violations under his 1973-90 rule, despite several high-profile cases against him. He is now facing charges relating to the murder of one Chilean and the disappearance of nine others. He is also being investigated for tax evasion, tax fraud and embezzlement of state funds.

The general's opponents rejoiced at the settlement, which was agreed in a court in the Spanish capital, Madrid. A lawyer for the victims, Eduardo Contreras, told Reuters news agency: "This demonstrates that the horrors of the Pinochet dictatorship are not a mystery to anyone and that the whole world knows his victims deserve reparations." Riggs spokesman Mark Hendrix said the settlement, details of which will be announced next week, was an opportunity to move on. "This enables the institution to put the matter behind us," he told Reuters. The settlement follows a legal complaint filed against the bank by Spanish Judge Baltasar Garzon alleging that it had illegally concealed assets. The bank agreed to create a fund for the victims, but the charges were dropped.
Consumers drive French economy

France's economic growth accelerated in the last three months of 2004, driven by consumer spending, a report shows.

Gross domestic product (GDP) rose by 0.8% in the fourth quarter compared with the previous three month period, the statistical office INSEE said. That expansion pushed annual growth to 2.3%, the fastest rate in two years. Consumer spending was up by 1.2% in the fourth quarter, and there also was a rebound in business investment that gave the recovery an extra shove.

Analysts warned that France still was facing challenges and was unlikely to keep expanding at its current pace.

"France still has a strong economic growth," said Marc Toutai, an economist at Natexis Banques Populaires. "But, if we check the figures in detail, there's a problem." "Consumer spending is still high. But French households have spent their savings to consume. "France can't sustain a high growth rate without an improvement in the job market. There's too much of a gap between growth and employment." Unemployment levels are currently stuck at about 10%, and is proving difficult to bring down despite government efforts. Another worry is that demand in Germany and Italy, two of France's main trading partners, is sluggish.

Despite the concerns, analysts pointed out that France was outperforming the majority of its European counterparts and that its economy was looking more robust than in previous years. As well as strong domestic demand, exports climbed by 1.3% in the fourth quarter - the biggest increase in foreign sales for a year. "It's an economic growth that seems well balanced," said Nicolas Claquin, an analyst at CCF. "In the beginning of 2004, growth was mainly driven by consumer spending. Here it gets contributions from investment and exports, though household consumption is still strong. "But we expect overall economic growth to fall to 2.0 percent in 2005."
Borussia Dortmund near bust

German football club and former European champion Borussia Dortmund has warned it will go bankrupt if rescue talks with creditors fail.

The company's shares tumbled after it said it has "entered a life-threatening profitability and financial situation". Borussia Dortmund has posted record losses and missed rent payments on its Westfallen stadium. Chief executive Gerd Niebaum stepped down last week and creditors are now pushing for greater control. Shares in Borussia Dortmund, Germany's only stock-market listed football club, dropped by almost 23% to 2.05 euros during early afternoon trading.

Fund manager Florian Hamm - Borussia Dortmund's largest investor - said he would only invest more money in the company if he got a greater say in how it is run. "I demand better transparency," he is quoted as saying by Germany's Manger Magazin. The club has also faced calls to appoint executives from outside the club.

Borussia Dortmund posted a record loss of 68m euros ($89m; £47m) in the 12 months through June. It made a loss of 27.2m euros in the first half of the current fiscal year and said that total debts will increase to 134.7m euros by the middle of 2006 unless a restructuring plan is pushed through. "This is the bill for their mismanagement over the past years," said HVB analyst Peter-Thilo Halser. The club appointed an auditor, who has recommended a number of steps, including deferring the rent due on the stadium and suspending debt repayments until at least the 2006-2007 fiscal year. Stephen Schechter, a UK investment banker who has held talks with Borussia Dortmund over a possible bond sale, said the club needs a capital injection of 35m euros. "They need strong people on the board who do not have a history with the club," he said.
'Post-Christmas lull' in lending

UK mortgage lending showed a "post-Christmas lull" in January, indicating a slowing housing market, lenders have said.

Both the Council of Mortgage Lenders (CML) and Building Society Association (BSA) said lending was down sharply. The CML said gross mortgage lending stood at £17.9bn, compared with £21.8bn in January last year. The BSA said mortgage approvals - loans approved but not yet made - were £2bn, down from £2.6bn in January 2004.

At the same time, the British Bankers' Association (BBA) said lending was "weaker". Overall, the BBA said mortgage lending rose by £4bn in January, a far smaller increase than the £5.1bn seen in December. This was a return to the "weaker pattern" of lending seen in the last months of 2004, the BBA added. However, it is the year-on-year lending comparisons which are the most striking. The CML said lending for house purchases and gross mortgage lending were 29% and 18% lower year-on-year respectively. "These figures show beyond doubt the recent slowdown in the housing market," Peter Williams, CML deputy director, said.
Worldcom director ends evidence

The former chief financial officer at US telecoms firm WorldCom has finished giving evidence at the trial of his ex-boss Bernie Ebbers.

Scott Sullivan admitted to jurors he was willing to commit fraud to meet Wall Street earnings projections. Mr Ebbers is on trial for fraud and conspiracy in relation to WorldCom's collapse in 2002. He pleads not guilty. Mr Sullivan has spent two days being cross-examined by lawyers for former Worldcom chief executive Mr Ebbers.

Attorney Reid Weingarten has attempted to portray Mr Sullivan as a liar and on Thursday quizzed him about his decision to commit fraud to meet analysts' profit estimates. "At that point in time," Mr Sullivan said, referring to the first false entries in late 2000, "I knew it was wrong and I knew it was against the law, but I thought we would get through it in the short term." Mr Sullivan, 42, has already pleaded guilty to fraud and will be sentenced following Mr Ebbers' trial, where he is appearing as a prosecution witness. Mr Ebbers, 63, has always insisted that he was unaware of any hidden shortfalls in WorldCom's finances. The former finance officer said Mr Ebbers knew about the improper accounting entries that were made between 2000 and 2002 to conceal soaring expenses and inflate revenue.

Mr Ebbers could face a sentence of 85 years if convicted of all the charges he is facing. WorldCom's problems appear to have begun with the collapse of the dotcom boom which cut its business from internet companies. Prosecutors allege that the company's top executives responded by orchestrating massive fraud over a two-year period. WorldCom emerged from bankruptcy protection in 2004, and is now known as MCI. On Monday, MCI agreed to a buyout by Verizon Communications in a deal valued at $6.75bn.
Ukraine steel sell-off 'illegal'

The controversial sell-off of a Ukrainian steel mill to a relative of the former president was illegal, a court has ruled.

The mill, Krivorizhstal, was sold in June 2004 for $800m (£424m) - well below other offers. President Viktor Yushchenko, elected in December, is planning to revisit many of Ukraine's recent privatisations. Krivorizhstal is one of dozens of firms which he says were sold cheaply to friends of the previous administration.

On Wednesday, Prime Minister Yulia Tymoshenko said as many as 3,000 firms could be included on the list of firms whose sale was being reviewed.

Mr Yushchenko had previously said the list would be limited to 30-40 enterprises. More than 90,000 businesses in all, from massive corporations to tiny shopfronts, have been sold off since 1992, as the command economy built up when Ukraine was part of the Soviet Union was dismantled. Analysts have suggested that the government needs to avoid the impression of an open-ended list, so as to preserve investor confidence.

Thursday's ruling by a district court in Perchesk overturned a previous decision in a lower court permitting the sale. The consortium which won the auction for the mill was created by Viktor Pinchuk, son-in-law of former-President Leonid Kuchma, and Rinat Akhmetov, the country's richest man. The next step is for the supreme court to annul the sale altogether, opening the way for Krivorizhstal to be resold. Mr Yushchenko has suggested a fair valuation could be as much as $3bn. One of the foreign bidders who lost out, steel giant LNM, told BBC News that it would be interested in any renewed sale.
Cairn shares up on new oil find

Shares in Cairn Energy have jumped 6% after the firm said an Indian oilfield was larger than previously thought.

Cairn said drilling to the north-west of its development site in Rajasthan had produced "very strong results". The company also said it now believed the development area would be able to produce oil for more than 25 years. Cairn's share price rose 300% last year after a number of oil finds, but its shares were hit in December following a disappointing drilling update. December's share fall means that Cairn is still in danger of being relegated from the FTSE 100 when the index is reshuffled next month. Cairn's shares closed up 64 pence, or 6%, at 1130p on Thursday.

Before Christmas, Cairn revealed that drilling to the north of the field in Rajasthan had been disappointing, which caused its shares to lose 18% in one day.

However, on Thursday, the group said its belief that the path of oil in the area actually moved further to the west had proved correct. "This area does need more appraisal drilling but it looks very strong," Dr Mike Watts head of exploration said. Chief executive Bill Gammell added: "The more we progress in Rajasthan the better we feel about it." Cairn made the discovery after having been granted an extension to their drilling licence in January by Indian authorities. The firm has applied for a 30-month extension to scout for oil outside its main development area, which includes the Mangala and Aishwariya fields where Cairn has previously announced major discoveries. It also said production at its other fields across the globe was likely to surpass levels seen in 2004.
Novartis hits acquisition trail

Swiss drugmaker Novartis has announced 5.65bn euros ($7.4bn; £3.9bn) of purchases to make its Sandoz unit the world's biggest generic drug producer.

Novartis, which last month forecast record sales for 2005, said it had bought all of Germany's Hexal. It also acquired 67.7% of Hexal's US affiliate Eon Labs, and offered to buy the remaining shares for $31 each. Novartis said that it would be able to make cost savings of about $200m a year following the acquisitions. Novartis' shares rose 1% to 57.85 Swiss francs in early trading.

The deal will see Novartis' Sandoz business overtake Israel's Teva Pharmaceuticals as the world's biggest maker of generics. Based on 2004 figures the newly merged producer would have sales of more than $5bn, the company estimated. Novartis said that it would merge a number of departments, adding that there may be job cuts.

"The strong growth outlook for Sandoz, which will create jobs, is expected to partially compensate for necessary reductions in the work force," the firm said in a statement. Generic drugs are chemically identical to their more expensive branded rivals. Producers such as Sandoz can copy the branded products usually after their patent protection expires and can sell them more cheaply as they do not have to pay research and development cost.

There are more than 150 generic drugmakers worldwide and analysts have predicted consolidation in a market that they call fragmented. However, not all analysts were initially convinced about the deal. "This is a very expensive acquisition," Birgit Kuhlhoff, from Sal Oppenheim investment bank, told Reuters. "I find it strange that they are making acquisitions in exactly those markets where they suffered price pressure."
'Standoff' on Deutsche's LSE bid

Deutsche Boerse investors unhappy with its London Stock Exchange bid will have no chance to throw out the exchange's management until May, Reuters says.

The Sunday Times reported that hedge funds TCI and Atticus were planning to demand the removal of the group's chairman and chief executive. But Deutsche Boerse told news agency Reuters such a move would have to wait until May's annual general meeting. Investors want Deutsche to return cash to shareholders rather than bid. "We are long-term investors and are experienced in removing management. We are not scared to take this to its conclusion this time," Atticus' David Slager told the Sunday Times. However, Deutsche Boerse told Reuters: "TCI's request for the removal of the supervisory board will be considered at the annual general meeting on May 25."

The Sunday Times reported that TCI had been drawing up a list of heavyweight executives to replace Deutsche's chairman Rolf Breuer and chief executive Werner Seifert. The group owns more than 5% of Deutsche - more than enough to demand an extraordinary general meeting to call on shareholders to oust the German exchange's management. Under German law Deutsche does not need investor backing to make a takeover bid. TCI and Atticus have opposed the LSE bid for some time saying it would destroy shareholder value, and would be better spent on a share buyback. Deutsche is in competition with pan-European bourse Euronext to take over the London exchange. Many commentators have suggested a bidding war between the two could break out. However, any such move would have to wait until March when the Office of Fair Trading completes an investigation into the competition aspects of the pair's takeover proposals.
Orange colour clash set for court

A row over the colour orange could hit the courts after mobile phone giant Orange launched action against a new mobile venture from Easyjet's founder.

Orange said it was starting proceedings against the Easymobile service for trademark infringement. Easymobile uses Easygroup's orange branding. Founder Stelios Haji-Ioannou has pledged to contest the action. The move comes after the two sides failed to come to an agreement after six months of talks. Orange claims the new low-cost mobile service has infringed its rights regarding the use of the colour orange and could confuse customers - known as "passing off".

"Our brand, and the rights associated with it are extremely important to us," Orange said in a statement. "In the absence of any firm commitment from Easy, we have been left with no choice but to start an action for trademark infringement and passing off." However, Mr Haji-Ioannou, who plans to launch Easymobile next month, vowed to fight back, saying: "We have nothing to be afraid of in this court case. "It is our right to use our own corporate colour for which we have become famous during the last 10 years." The Easyjet founder also said he planned to add a disclaimer to the Easygroup website to ensure customers are aware the Easymobile brand has no connection to Orange. The new service is the latest venture from Easygroup, which includes a chain of internet cafes, budget car rentals and an intercity bus service. Easymobile will allow customers to go online to order SIM cards and airtime - which will be rented from T-Mobile - for their existing handsets.
Standard Life cuts policy bonuses

Standard Life, Europe's largest mutual life insurer, has cut bonuses for with-profit policyholders.

Annual bonus rates on its with-profits life policies were cut from 2.5% to 2%, while bonuses on pension policies were reduced from 3.25% to 2.5%. It is the sixth time in three years Standard Life has made cuts to bonus rates, despite an 8.7% rise in the value of the with-profits fund in 2004. The insurer blamed the cuts on poor share returns and low interest rates.

With-profits policies are designed to smooth out the peaks and troughs of stock market volatility. Profits made in good years are kept in reserve to pay investors an annual bonus even when the stock market performs badly. Slumping share prices throughout 2001 and 2002 forced most firms to trim bonus rates on their policies. Standard Life came in for criticism for sticking with stock market investments during 2001 and 2002. The insurer argued that shares outperformed other investments over the long term and that policyholders would feel the benefit when the stock market recovered. Recently, Norwich Union and Axa Sun Life both cut their with-profit bonus rates.

John Gill, managing director of the insurer's life and pensions division, said that a strong stock market recovery in the past two years had only "partly compensated for losses during 2001 and 2002". In addition, low interest rates meant that "long-term investment returns are well below historic levels", Mr Gill added. However, Mr Gill maintained that with-profits continued to perform well over the long term. "Our payouts continue to stand up well against other types of long-term investments over similar periods," he said. Standard Life has an estimated 2.4 million with-profits policyholders. Last year, the company announced that it was looking to float on the stock market in 2006.
China's Shanda buys stake in Sina

Chinese online game operator Shanda Interactive Entertainment has bought a 20% stake in Sina, the country's biggest internet portal firm.

The move may be a precursor to a full takeover, with analysts saying that a better-known international firm may also now show an interest in Sina. Shanda said that it may boost its stake in Sina, even buying it outright. A merger would create a firm that offers online role-playing games, news, entertainment and wireless messaging.

Sina said that the purchase of a stake by Shanda would have no impact on its business.

The board of directors said in a statement that it would "continue to act in the best interests of all the company stakeholders, including shareholders, employees and customers". Both companies are listed on the New York Stock Exchange's (NYSE) technology-dominated Nasdaq index. In a filing with the US Securities and Exchange Commission, Sina said its shares were purchased between 12 January and 10 February for about $230m. Rumours about a possible takeover boosted Sina's shares by more than 10% on Friday. They added an extra 6.4% to $27.24 in electronic trading after the trading session had finished. And there may be more gains amid bid speculation when trading resumes in New York on Tuesday after Monday's public holiday, analysts forecast. "There could still be some potential parties that could still counter bid," said Wallace Cheung, an analyst at DBS Vickers. "Even though Shanda has 20% of Sina, they still have quite a long way to take full control." However, Mr Cheung noted that a foreign company trying to take control of a Chinese internet portal firm, with its ability to filter and pass on news, may not be viewed very favourably by Beijing.
Electronics firms eye plasma deal

Consumer electronics giants Hitachi and Matshushita Electric are joining forces to share and develop technology for flat screen televisions.

The tie-up comes as the world's top producers are having to contend with falling prices and intense competition. The two Japanese companies will collaborate in research & development, production, marketing and licensing. They said the agreement would enable the two companies to expand the plasma display TV market globally.

Plasma display panels are used for large, thin TVs which are replacing old-style televisions. The display market for high-definition televisions is split between models using plasma display panels and others - manufactured by the likes of Sony and Samsung - using liquid-crystal displays (LCDs). The deal will enable Hitachi and Matsushita, which makes Panasonic brand products, to develop new technology and improve their competitiveness. Hitachi recently announced a deal to buy plasma display technology from rival Fujitsu in an effort to strengthen its presence in the market.

Separately, Fujitsu announced on Monday that it is quitting the LCD panel market by transferring its operations in the area to Japanese manufacturer Sharp. Sharp will inherit staff, manufacturing facilities and intellectual property from Fujitsu. The plasma panel market has seen rapid consolidation in recent months as the price of consumer electronic goods and components has fallen. Samsung Electronics and Sony are among other companies working together to reduce costs and speed up new product development.
MG Rover China tie-up 'delayed'

MG Rover's proposed tie-up with China's top carmaker has been delayed due to concerns by Chinese regulators, according to the Financial Times.

The paper said Chinese officials had been irritated by Rover's disclosure of its talks with Shanghai Automotive Industry Corp in October. The proposed deal was seen as crucial to safeguarding the future of Rover's Longbridge plant in the West Midlands. However, there are growing fears that the deal could result in job losses. The Observer reported on Sunday that nearly half the workforce at Longbridge could be under threat if the deal goes ahead.

Shanghai Automotive's proposed £1bn investment in Rover is awaiting approval by its owner, the Shanghai city government and by the National Development and Reform Commission, which oversees foreign investment by Chinese firms. According to the FT, the regulator has been annoyed by Rover's decision to talk publicly about the deal and the intense speculation which has ensued about what it will mean for Rover's future. As a result, hopes that approval of the deal may be fast-tracked have disappeared, the paper said. There has been continued speculation about the viability of Rover's Longbridge plant because of falling sales and unfashionable models.

According to the Observer, 3,000 jobs - out of a total workforce of 6,500 - could be lost if the deal goes ahead. The paper said that Chinese officials believe cutbacks will be required to keep the MG Rover's costs in line with revenues. It also said that the production of new models through the joint venture would take at least eighteen months. Neither Rover nor Shanghai Automotive commented on the reports.
Economy 'strong' in election year

UK businesses are set to prosper during the next few months - but this could trigger more interest rate rises, according to a report.

Optimism is at its highest since 1997 and business will reap the benefits of a continuing rise in public spending, say researchers at BDO Stoy Hayward. The Bank of England is expected to keep rates on hold this week - but they could go up later in the year. Rates are likely to rise after the anticipated general election in May. The BDO optimism index - a leading indicator of GDP growth two quarters ahead edged up in January to 102.5, from 102.2 in October. The rise is due, in part, to an increase in public spending and increased merger and acquisition activity.

The only thing blighting business optimism this year will be uncertainties associated with the general election, BDO said. Its BDO's output index - which predicts GDP movements a quarter in advance - remained at 100.8 for January, implying GDP growth at 2.9% in the second quarter of 2005. However, the output index is being held back by recent interest rate rises, sterling's strength against the dollar and high oil prices, the group noted. Its inflation index, which has risen continuously over the last 8 months, climbed to 110.0 in January from 108.0 in October last year. "The UK is looking strong going into the general election, but businesses need to prepare themselves for a jolt ahead as the Bank of England reacts to growth and inflationary pressures," said Peter Hemington, partner at BDO Stoy Hayward. "Growth will probably slow by the end of 2005 and it is likely that we will see higher interest rates or a sharp drop in demand for products and services."
Absa and Barclays talks continue

South Africa biggest retail bank Absa has said it is still in talks with UK bank Barclays over the sale of majority stake in the group.

In November, Absa said it was close to striking a deal with Barclays. But the group said Barclays is still waiting for the approval of South Africa's banking and competition authorities to make a formal offer. Absa also announced that it expects to see earnings grow by 20-25% in its current financial year.

"Discussions with Barclays are continuing, but shareholders are advised that no agreement has been reached as to any offer being made by Barclays to acquire a majority stake in Absa," Absa said in a statement. If Barclays buys a stake in Absa it will be one of the largest foreign investments in South Africa in recent years. Absa currently has a market value of about $8.5bn (£4.4bn). Analysts said Absa's earnings forecast was better than expected. However, the company warned that headline earnings growth would be trimmed by about four percentage points because of share options for a black economic empowerment transaction and a staff share incentive scheme. The South African group will release its results for the year to 31 March on 30 May.
Rescue hope for Borussia Dortmund

Shares in struggling German football club Borussia Dortmund slipped on Monday despite the club agreeing a rescue plan with creditors on Friday.

The club, which has posted record losses and racked up debts, said last week that it was in "a life-threatening profitability and financial situation". Creditors agreed on Friday to suspend interest payments until 2007. News of the deal had boosted shares in the club on Friday, but the stock slipped back 7% during Monday morning.

In addition to the interest-payment freeze, Borussia Dortmund also will get short-term loans to help pay salaries. It estimated that it needs almost 30m euros ($39m; £21m) until the end of June if it is to pay its bills. The football club is hoping that all its creditors will agree to defer rent payments on its Westfalen stadium. Borussia officials met with almost all the banks involved in its financing on Friday and over the weekend. Three creditors have yet to agree to the deal struck last week. On 14 March, one of these creditors - property investment fund Molsiris which owns the club's stadium - holds its AGM at which it will discuss the rescue plan. Chief executive Gerd Niebaum stepped down last week and creditors have been pushing for a greater say in how the club is run. Borussia Dortmund also is facing calls to appoint executives from outside the club. The club posted a record loss of 68m euros in the 12 months through June. Adding to its woes, Borussia Dortmund was beaten 5-0 by Bayern Munich on Saturday.
BP surges ahead on high oil price

Oil giant BP has announced a 26% rise in annual profits to $16.2bn (£8.7bn) on the back of record oil prices.

Last week, rival Shell reported an annual profit of $17.5bn - a record profit for a UK-listed company. BP added that it was increasing its fourth-quarter dividend by 26% to 8.5 cents, and that it would continue with share buybacks. BP chief executive Lord Browne said the results were strong "both operationally and financially."

The company is earning about $1.8m an hour.

Despite the record annual profits figure, BP's performance was below the expectations of some City analysts. However, BP's share price rose 4p or nearly 1% in morning trading to 548p. Its profit rise for the year included profits of $3.65bn (£1.97bn) for the final three months of 2004 - up from $2.89bn a year ago but below its third quarter.

Speaking on the BBC's Today programme on Tuesday, Lord Browne said the profits were not solely down to the high oil price alone.

"The profits are up more than the price of oil is up," he said. Lord Browne pointed out that BP was reaping the benefits of its investment in oil exploration. "We have spent many years buying (assets) when the price is low," he said. The company has made new discoveries in Egypt, the Gulf of Mexico and Angola.

However, Lord Browne rejected calls for a windfall tax on his company's huge profits, saying that in the North Sea it paid progressively more tax, the more profits it made. Lord Browne believes oil prices will remain quite high. Currently above $40 a barrel, he said: "The price of oil will be well supported above $30 a barrel for the medium term." BP put production for the year at 3.997 billion barrels of oil, up 10% on 2003, but slightly lower than the four billion barrels it had initially aimed for.
Gaming firm to sell UK dog tracks

Six UK greyhound tracks have been put up for sale by gaming group Wembley as part of a move which will lead to the break-up of the group.

Wembley announced the planned sale as it revealed it was to offload its US gaming division to BLB Investors. US gaming consortium BLB will pay $339m (£182.5m) for the US unit, although the deal is subject to certain conditions. BLB holds a 22% stake in Wembley and last year came close to buying the whole firm in a £308m takeover deal. Shares in Wembley were up 56 pence, or 7.6%, at 797p by mid-morning.

The sale of the US gaming unit will leave Wembley with its UK business. This includes greyhound tracks at Wimbledon in London, Belle Vue in Manchester, Perry Barr and Hall Green in Birmingham, Oxford and Portsmouth. Analysts have valued the six tracks at between £40m-£50m. The US business accounts for about 90% of Wembley's operating profit and consists of operations in Rhode Island and Colorado. BLB's purchase of the US unit is subject to the agreement of a revenue-sharing deal being struck with Rhode Island authorities. Wembley said that, once the deal was completed, it anticipated returning surplus cash to shareholders. "Whilst the completion of the sale of the US Gaming Division remains subject to a number of conditions, we believe this development is a positive step towards the maximisation of value for shareholders," said Wembley chairman Claes Hultman. Wembley sold the English national football stadium in 1999 to concentrate on its gaming operations.
Sales 'fail to boost High Street'

The January sales have failed to help the UK High Street recover from a poor Christmas season, a survey has found.

Stores received a boost from bargain hunters but trading then reverted to December levels, the British Retail Consortium and accountants KPMG said. Sales in what is traditionally a strong month rose by 0.5% on a like-for-like basis, compared with a year earlier. Consumers remain cautious over buying big-ticket items like furniture, said BRC director general Kevin Hawkins. Higher interest rates and uncertainty over the housing market continue to take their toll on the retail sector, the BRC said. But clothing and footwear sales were said to be generally better than December, while department stores also had a good month.

In the three-months to January, like-for-like sales showed a growth rate of -0.1%, the same as in the three months to December, the BRC said. "Following a relatively strong New Year's bank holiday, trading then took a downward turn," said Mr Hawkins. "Even extending some promotions and discounts and the pay-day boost later in the month could not tempt customers." The previous BRC survey found Christmas 2004 was the worst for 10 years for retailers. And according to Office for National Statistics data, sales in December failed to meet expectations and by some counts were the worst since 1981.
McDonald's to sponsor MTV show

McDonald's, the world's largest restaurant chain, is to sponsor a programme on music channel MTV as part of its latest youth market promotion.

The show Advance Warning highlights new talent and MTV reckons it will give McDonald's access to nearly 400 million homes in 162 countries. McDonald's golden arches, name and "I'm loving it" catchphrase will be used throughout the half-hour programme. The move comes amid growing concerns about obesity in Europe and the US.

The European Union has called on the food industry to reduce the number of adverts aimed at young children, warning that legislation would be introduced. unless voluntary steps were taken. In the US, food group Kraft is among firms that already have cut back on promoting sugar and fattening products to the young. McDonalds has also been taking steps to improve its junk food reputation, revamping its menu and providing clients with health-related products such as pedometers. As well as burgers like the Big Mac and Quarter Pounder with Cheese, the company now sells healthier options such as salads and fresh fruit. Chief executive Jim Skinner attributed an 8.3% increase in January worldwide sales to the "vitality of our menu", among other things.

Hooking up with MTV is expected to add extra momentum to McDonald's recent revival. MTV, which played a key role in the emergence of the music video, is to show Advance Warning on all 25 of its channels across the world. The programme can at present only been seen in the US, where it has featured artists like British stars Joss Stone and Franz Ferdinand. McDonald's has targeted the youth market in the past with its advertisements, signing up stars like jelly-legged dancer Justin Timberlake and all-woman singing group Destiny's Child.
Call to save manufacturing jobs

The Trades Union Congress (TUC) is calling on the government to stem job losses in manufacturing firms by reviewing the help it gives companies.

The TUC said in its submission before the Budget that action is needed because of 105,000 jobs lost from the sector over the last year. It calls for better pensions, child care provision and decent wages. The 36-page submission also urges the government to examine support other European countries provide to industry. TUC General Secretary Brendan Barber called for "a commitment to policies that will make a real difference to the lives of working people."

"Greater investment in childcare strategies and the people delivering that childcare will increases the options available to working parents," he said. "A commitment to our public services and manufacturing sector ensures that we can continue to compete on a global level and deliver the frontline services that this country needs." He also called for "practical measures" to help pensioners, especially women who he said "are most likely to retire in poverty". The submission also calls for decent wages and training for people working in the manufacturing sector.
Tsunami 'to hit Sri Lanka banks'

Sri Lanka's banks face hard times following December's tsunami disaster, officials have warned.

The Sri Lanka Banks Association said the waves which killed more than 30,000 people also washed away huge amounts of property which was securing loans. According to its estimate, as much as 13.6% of the loans made by private banks to clients in the disaster zone has been written off or damaged. State-owned lenders may be even worse hit, it said.

The association estimates that the private banking sector has 25bn rupees ($250m; £135m) of loans outstanding in the disaster zone. On one hand, banks are dealing with the death of their customers, along with damaged or destroyed collateral. On the other, most are extending cheap loans for rebuilding and recovery, as well as giving their clients more time to repay existing borrowing. The combination means a revenue shortfall during 2005, SLBA chairman - and Commercial Bank managing director - AL Gooneratne told a news conference. "Most banks have given moratoriums and will not be collecting interest, at least in this quarter," he said. In the public sector, more than one in ten of the state-owned People's Bank's customers in the south of Sri Lanka were affected, a bank spokesman told Reuters. He estimated the bank's loss at 3bn rupees.
Yukos drops banks from court bid

Russian oil company Yukos has dropped the threat of legal action against five banks it had accused of involvement in the sale of its key Yugansk unit.

State-owned Rosneft bought the unit for $9.3bn (£5bn) after Yukos was forced to sell assets to meet a $27.5bn tax bill. Yukos says the sale was illegal and is pursuing damages in a US court. Its lawyers now accept ABN Amro, BNP Paribas, Calyon, JP Morgan Chase Bank, and Dresdner Kleinwort Wasserstein were not involved in the sale financing. However, Yukos still has an outstanding complaint against Deutsche Bank, which it alleges to be the leader of a consortium that was behind a bid for Yugansk by state gas monopoly Gazprom. The company has also accused Gazprom, the Russian Federation and two other Russian firms.

Gazprom had been expected to win the December auction, but ended up not bidding. Yugansk was sold to a little-known shell company, which in turn was bought by Rosneft. Yukos claims its downfall was punishment for the political ambitions of its founder Mikhail Khodorkovsky. The firm, whose finance chief is now based in the US, filed for bankruptcy in Houston, Texas, and sought a court injunction against the sale. But Deutsche Bank has suggested Yukos artificially manufactured a legal case to stop the sale of its main asset. A hearing scheduled for February 16 and 17 will rule on whether the US court has jurisdiction in the case.
Lloyd's of London head chides FSA

The head of Lloyd's of London, the insurance market, has criticised Britain's financial watchdog, the Financial Services Authority (FSA).

In a speech on Monday, Mr Prettejohn urged the FSA to force brokers to disclose the size of their commissions. "The FSA should change, and change now" said Mr Prettejohn, who wants it to move from "disclosure on request" to mandatory disclosure. The call came in a speech on improving the London insurance market.

"The FSA should not bide their time and 'wait and see'. They should seize the moment," Mr Prettejohn, Lloyd's chief executive said. The FSA took over regulation of the general insurance sector in January, but it sidestepped calls to require brokers to disclose the commissions they earn from insurers to their clients. Last week, the City watchdog gave brokers and insurers guidance on managing conflicts of interest. Brokers must give information on their commissions if, and only if, their customers request it, the FSA said.

In the US, lack of transparency about brokers' commissions has led to problems. The world's biggest insurance broker Marsh & McLennan said last week it would pay $850m to settle charges, raised by New York Attorney General Eliot Spitzer in October, that it sought to rig bids in conjunction with insurers. The probe centred around so-called contingent commissions, whereby brokers were rewarded according to how much business they brought to an insurer, an arrangement that did not always benefit brokers' customers. All of the insurance business written in the Lloyd's market is placed via brokers.
Bat spit drug firm goes to market

A German firm whose main product is derived from the saliva of the vampire bat is looking to raise more than 70m euros ($91m; £49m) on the stock market.

The firm, Paion, said that it hoped to sell 5 million shares - a third of the firm - for 11-14 euros a share. Its main drug, desmoteplase, is based on a protein in the bat's saliva. The protein stops blood from clotting - which helps the bat to drink from its victims, but could also be used to help stroke sufferers. The company's shares go on sale later this week, and are scheduled to start trading on the Frankfurt Stock Exchange on 10 February. If the final price is at the top of the range, the company could be valued at as much as 200m euros. The money raised will be spent largely on developing the company's other drugs, since desmoteplase has already been licensed to one manufacturer, Forest Laboratories.
Vodafone appoints new Japan boss

Vodafone has drafted in its UK chief executive William Morrow to take charge of its troubled Japanese operation.

Mr Morrow will succeed Shiro Tsuda as president of Vodafone KK, Japan's number three mobile operator, in April. Mr Tsuda, who will become chairman, was appointed president only two months ago but the business has struggled since then, losing customers in January. Vodafone had pinned its hopes on the launch of its 3G phones in November but demand for them has been slow.

While it has more than 15 million customers in Japan, Vodafone has found it difficult to satisfy Japan's technologically demanding mobile users. It suffered a net loss of more than 58,000 customers in January, its second monthly reverse in the last year. "Vodafone is going to need to put a lot of money into Japan if it wants to rebuild the business," Tetsuro Tsusaka, a telecoms analyst with Deutsche Bank, told Reuters. "I do not know if it will be worth it for them to spend that kind of money just for Japan."
Pension hitch for long-living men

Male life expectancy is much higher than originally estimated, leading pension researchers have said.

The Pensions Policy Institute (PPI) said life expectancy for unskilled and professional men has been understated. Life expectancy at birth is 71 years for a manual worker and 79 years for a professional - a gap of eight years. But if measured at age 65 instead, the PPI said, a manual worker will live to 81 years and a professional worker to 86 years - a gap of just five years. The PPI's estimate is higher because it excludes people who have died before they reach 65 years of age and also takes into account ongoing improvements in life expectancy.

The government has ruled out raising the state pension age, because it says it would penalise lower-skilled workers who generally have lower life expectancies. Chris Curry, PPI research director, said its calculations suggested there could be more pressure on state pension spending than originally envisaged. "Even people in social class V [unskilled manual workers] who are widely likely to have the lowest life expectancy can still expect to live 16 years after state pension age," he said. Researchers have not updated life expectancy projections for women, who on average live longer than men.
Britannia members' £42m windfall

More than 800,000 Britannia Building Society members are to receive a profit share worth on average £52 each.

Members of the UK's second largest building society will share £42m, with 100,000 receiving a windfall of more than £100. Depending on how much they borrow or invest, members earn "reward" points which entitle them to a share of the society's profits. The payouts are bigger than last year, because of stricter eligibility rules. Last year, Britannia members shared £42m, but the average payment was only £38.

To qualify for this year's payment, customers must have been members for at least two years on 31 December 2004. Britannia has also stopped making payments to members if they are worth less than £5.

To qualify for the profit share, members must have either a mortgage, or an investment account other than a deposit account. Customers can also qualify if they have Permanent Interest Bearing Shares (PIBS). The profit share scheme was introduced in 1997 and has paid out more than £370m. Britannia will unveil its results on Wednesday.
Firms pump billions into pensions

Employers have spent billions of pounds propping up their final salary pensions over the past year, research suggests.

A survey of 280 schemes by Incomes Data Services' (IDS) said employer contributions had increased from £5.5bn to £8.2bn a year, a rise of 49.7%. Companies facing the biggest deficits had raised their pension contributions by 100% or more, IDS said. Many firms are struggling to keep this type of scheme open, because of rising costs and increased liabilities. A final salary scheme, also known as a defined benefit scheme, promises to pay a pension related to the salary the scheme member is earning when they retire.

The rising cost of maintaining such schemes has led many employers to replace final salary schemes with money purchase, or defined contribution, schemes. These are less risky for employers. Under money purchase schemes, employees pay into a pension fund which is used to buy an annuity - a policy which pays out an income until death - on retirement.

IDS said there were some schemes in good health.

But, in many cases, firms had been forced to top up funds to tackle "yawning deficits". The level of contributions paid by employers has increased gradually since the late 1990s. In 1998/99, for example, contributions rose by 4.7% and in 2002/03 by 8.6%. In contrast, between 1996 and 1998, some employers cut their contribution levels. Helen Sudell, editor of the IDS Pensions Service, said the rise in contributions was "staggering" and the highest ever recorded by IDS. "We have warned before that the widespread closure of final salary schemes to new entrants is just the beginning of a much bigger movement away from paternalistic provision," said Ms Sudell. "With figures like this there can be little doubt that many employers will have to reduce future benefits at some point for those staff still in these schemes."
UK homes hit £3.3 trillion total

The value of the UK's housing stock reached the £3.3 trillion mark in 2004 - triple the value 10 years earlier, a report indicates.

Research from Halifax, the country's biggest mortgage lender, suggests the value of private housing stock is continuing to rise steadily. All regions saw at least a doubling in their assets during the past decade. But Northern Ireland led the way with a 262% rise, while Scotland saw the smallest increase of just 112%.

The core retail price index rose by just 28% in the same period, underlining how effective an investment in housing has been for most people during the past decade. More than a third of the UK's private housing assets - representing more than a trillion pounds in value - are concentrated in London and the South East, the Halifax's figures indicate. Tim Crawford, Group Economist at Halifax, said: "The value of the private housing stock continues to grow and the family home remains, by a large margin, the most valuable asset of the majority of households in the UK." Halifax's own monthly figures on house sales - issued on Thursday - suggest the average price of a British property now stands at £163,748 after a 0.8% rise in January. Housing experts are split on prospects for the market, with some saying price growth will slow but not fall, while others predict a sharp drop in values.
Economy 'strong' in election year

UK businesses are set to prosper during the next few months - but this could trigger more interest rate rises, according to a report.

Optimism is at its highest since 1997 and business will reap the benefits of a continuing rise in public spending, say researchers at BDO Stoy Hayward. The Bank of England is expected to keep rates on hold this week - but they could go up later in the year. Rates are likely to rise after the anticipated general election in May. The BDO optimism index - a leading indicator of GDP growth two quarters ahead edged up in January to 102.5, from 102.2 in October. The rise is due, in part, to an increase in public spending and increased merger and acquisition activity.

The only thing blighting business optimism this year will be uncertainties associated with the general election, BDO said. Its BDO's output index - which predicts GDP movements a quarter in advance - remained at 100.8 for January, implying GDP growth at 2.9% in the second quarter of 2005. However, the output index is being held back by recent interest rate rises, sterling's strength against the dollar and high oil prices, the group noted. Its inflation index, which has risen continuously over the last 8 months, climbed to 110.0 in January from 108.0 in October last year. "The UK is looking strong going into the general election, but businesses need to prepare themselves for a jolt ahead as the Bank of England reacts to growth and inflationary pressures," said Peter Hemington, partner at BDO Stoy Hayward. "Growth will probably slow by the end of 2005 and it is likely that we will see higher interest rates or a sharp drop in demand for products and services."
Renault boss hails 'great year'

Strong sales outside western Europe helped Renault boost its profits by more than 40% in 2004 although the firm warned of lower margins this year.

France's second largest carmaker enjoyed a healthy 43% rise in net profits to 2.4bn euros ($3.1bn; £2.9bn) as sales rose 8% to 40.7bn euros. The firm said strong demand outside western Europe and the good performance of its Megane range lifted its results. Chairman Louis Schweitzer said 2004 had been a "great year" for the firm.

Renault sold more than 2.4 million vehicles in 2004, an increase of 4% on the previous year. Growth came mainly from outside western Europe, with particularly strong sales in Turkey, Russia and North Africa.

In total, sales outside western Europe - Renault's core market - rose 16.5%. Japanese carmaker Nissan - in which Renault owns a 44% stake - contributed 1.7bn euros in net income over the year. Nissan chairman Carlos Ghosn is to succeed Mr Schweitzer at the head of Renault later this year.

Renault said the outlook for the industry in Europe this year was "stable", with small growth forecast in other regions. The firm will benefit from the launch of a new Clio model in the coming year and the roll-out of the Logan in many markets. However, the firm said it expected operating margins to be lower in 2005, at 4% of sales as opposed to 5%. "In a sluggish market and an environment impacted by the rise in raw material prices, Renault intends to continue to grow its global sales," the company said in a statement.
Survey confirms property slowdown

Government figures have confirmed a widely reported slowdown of the UK's housing market in late 2004.

House prices were 11.8% higher on the year in the last quarter of 2004, down from 16.3% in the July-to-September quarter, the Land Registry said. The average house price in England and Wales was £182,920, down from £187,971 in July-September. The volume of sales between October and December dropped by nearly a quarter from the same period in 2003. The government figures are the first official confirmation of falls in the market at the end of 2004. Land Registry figures are less up to date than those of banks and building societies, since they record completions not mortgage approvals. However, the figures are viewed as the most accurate measure of house prices as they include all property transactions, including cash sales.

The cost of buying a home fell in seven out of 10 regions between the third and fourth quarters of 2004.

The biggest annual gains were made in Wales, where house prices were up by 23% in the fourth quarter. House prices rose the slowest in Greater London, being up by 6%. In the capital, the volume of sales fell by 23% from 36,185 in 2003 to 28,041 for the same period in 2004. There was also a decline in the number of million-pound properties sold in the capital, with 436 properties over £1m sold compared to 469 for the same period in 2003. Although the figures point to a slowdown in the market, the most recent surveys from Nationwide and Halifax have indicated the market may be undergoing a revival. After registering falls at the back end of 2004, Halifax said house prices rose by 0.8% in January and Nationwide reported a rise of 0.4% in the first month of the year. Members of the Bank of England's rate-setting committee will make their latest decision on interest rates on Thursday.
Profits stall at China's Lenovo

Profits at Chinese computer firm Lenovo have stood still amid slowing demand at home and stiffening competition.

The firm is in the international spotlight after last year signing a deal to buy the PC division of personal computer pioneer IBM. Lenovo's profit for the three months to December was HK$327m (US$42m; £22m), less than 1% up on the year before. Chinese PC sales have risen by a fifth in each of the past two years, but are now growing more slowly. The company is still by far the biggest player in China, with more than a quarter of the market. But Western firms such as Dell and Hewlett-Packard are also mounting a more solid fight for market share in China, and Lenovo's sales were down 3.7% by revenue to HK$6.31bn.

If the $1.75bn agreement Lenovo signed with IBM on 8 December goes through, it will mark the end of an era. IBM pioneered the desktop PC market in the early 1980s, although strategic mis-steps helped lose it its early dominance. In any case, margins in PC market are now wafer thin, and profits have been hard to come by for most vendors except direct-sales giant Dell. But investors have been less than impressed with Lenovo's move, designed to take it out of China and further onto the world stage. Its shares are down 20% since the announcement two months ago, largely because of the unprofitability of the unit it is buying. There have been rumours that the deal could be in trouble because US government agencies fear it could offer China opportunities for industrial espionage. The reports of the possibility of an investigation into the risk sent Lenovo's shares up 6% in late January.
MCI shares climb on takeover bid

Shares in US phone company MCI have risen on speculation that it is in takeover talks.

The Wall Street Journal reported on Thursday that Qwest has bid $6.3bn (£3.4bn) for MCI. Other firms have also expressed an interest in MCI, the second-largest US long-distance phone firm, and may now table rival bids, analysts said. Shares in MCI, which changed its name from Worldcom when it emerged from bankruptcy, were up 2.4% at $20.15. Press reports suggest that Qwest and MCI may reach an agreement as early as next week, although rival bids may muddy the waters. The largest US telephone company Verizon has previously held preliminary merger discussions with MCI, Reuters quoted sources as saying.

Consolidation in the US telecommunications industry has picked up in the past few months as companies look to cut costs and boost client bases. A merger between MCI and Qwest would be the fifth billion-dollar telecoms deal since October. Last week, SBC Communications agreed to buy its former parent and phone trailblazer AT&T for about $16bn. Competition has intensified and fixed-line phone providers such as MCI and AT&T have seen themselves overtaken by rivals. Buying MCI would give Qwest, a local phone service provider, access to MCI's global network and business-based subscribers. MCI also offers internet services.

MCI was renamed after it emerged from Chapter 11 bankruptcy protection in April last year. It hit the headlines as Worldcom in 2002 after admitting it illegally booked expenses and inflated profits. The scandal was a key factor in a global slide in share prices and the reverberations are still being felt today. Shareholders lost about $180bn when the company collapsed, while 20,000 workers lost their jobs. Former Worldcom boss Bernie Ebbers is currently on trial, accused of overseeing an $11bn fraud.
Jobs growth still slow in the US

The US created fewer jobs than expected in January, but a fall in jobseekers pushed the unemployment rate to its lowest level in three years.

According to Labor Department figures, US firms added only 146,000 jobs in January. The gain in non-farm payrolls was below market expectations of 190,000 new jobs. Nevertheless it was enough to push down the unemployment rate to 5.2%, its lowest level since September 2001. The job gains mean that President Bush can celebrate - albeit by a very fine margin - a net growth in jobs in the US economy in his first term in office. He presided over a net fall in jobs up to last November's Presidential election - the first President to do so since Herbert Hoover. As a result, job creation became a key issue in last year's election. However, when adding December and January's figures, the administration's first term jobs record ended in positive territory.

The Labor Department also said it had revised down the jobs gains in December 2004, from 157,000 to 133,000.

Analysts said the growth in new jobs was not as strong as could be expected given the favourable economic conditions. "It suggests that employment is continuing to expand at a moderate pace," said Rick Egelton, deputy chief economist at BMO Financial Group. "We are not getting the boost to employment that we would have got given the low value of the dollar and the still relatively low interest rate environment." "The economy is producing a moderate but not a satisfying amount of job growth," said Ken Mayland, president of ClearView Economics. "That means there are a limited number of new opportunities for workers."
News Corp eyes video games market

News Corp, the media company controlled by Australian billionaire Rupert Murdoch, is eyeing a move into the video games market.

According to the Financial Times, chief operating officer Peter Chernin said that News Corp is "kicking the tyres of pretty much all video games companies". Santa Monica-based Activison is said to be one firm on its takeover list. Video games are "big business", the paper quoted Mr Chernin as saying. We "would like to get into it".

The success of products such as Sony's Playstation, Microsoft's X-Box and Nintendo's Game Cube have boosted demand for video games. The days of arcade classics such as Space Invaders, Pac-Man and Donkey Kong are long gone. Today, games often have budgets big enough for feature films and look to give gamers as real an experience as possible. And with their price tags reflecting the heavy investment by development companies, video games are proving almost as profitable as they are fun.

Mr Chernin, however, told the FT that News Corp was finding it difficult to identify a suitable target. "We are struggling with the gap between companies like Electronic Arts (EA), which comes with a high price tag, and the next tier of companies," he explained during a conference in Phoenix, Arizona. "These may be too focused on one or two product lines." Activision has a stock market capitalisation of about $2.95bn (£1.57bn), compared to EA's $17.8bn. Some of the games industry's main players have recently been looking to consolidate their position by making acquisitions. France's Ubisoft, one of Europe's biggest video game publishers, has been trying to remain independent since Electronic Arts announced plans to buy 19.9% of the firm. Analysts have said that industry mergers are likely in the future.
Call to overhaul UK state pension

The UK pension system has been branded inadequate and too complex by a leading retirement think-tank.

The Pensions Policy Institute (PPI) said replacing the state pension with a "citizen's pension" would help tackle inequality and complexity. The change would see pensions being calculated on length of residency in the UK rather than National Insurance (NI) contributions. Reform could reduce poverty by aiding people with broken employment records.

The PPI added that once the state system was reformed the government should look at options to overhaul private and workplace pensions. The think tank's proposals were made in response to the recent publication of the Pensions Commission's initial report into UK retirement savings. According to the Pensions Commission's report 12 million working people are not saving enough for their retirement. As a result, living standards could fall for the next generation of UK pensioners. The report added that a combination of higher taxes, higher savings and/or a higher average retirement age was needed to solve the UK pension crisis.
Singapore growth at 8.1% in 2004

Singapore's economy grew by 8.1% in 2004, its best performance since 2000, figures from the trade ministry show.

The advance, the second-fastest in Asia after China, was led by growth of 13.1% in the key manufacturing sector. However, a slower-than-expected fourth quarter points to more modest growth for the trade-driven economy in 2005 as global technology demand falls back. Slowdowns in the US and China could hit electronics exports, while the tsunami disaster may effect the service sector.

Economic growth is set to halve in Singapore this year to between 3% and 5%. In the fourth quarter, the city state's gross domestic product (GDP) rose at an annual rate of 2.4%. That was up from the third quarter, when it fell 3.0%, but was well below analyst forecasts. "I am surprised at the weak fourth quarter number. The main drag came from electronics," said Lian Chia Liang, economist at JP Morgan Chase. Singapore's economy had contracted over the summer, weighed down by soaring oil prices. The economy's poor performance in the July to September period followed four consecutive quarters of double-digit growth as Singapore bounced back strongly from the effects of the deadly Sars virus in 2003.
Latin America sees strong growth

Latin America's economy grew by 5.5% in 2004, its best performance since 1980, while exports registered their best performance in two decades.

The United Nations' Economic Commission for Latin America and the Caribbean said the region grew by 5.5% this year. The Inter-American Development Bank (IADB) said regional exports reached $445.1bn (£227bn;331bn euros) in 2004. Doubts about the strength of the US recovery and overheating of the Chinese economy do however pose risks for 2005. Both organisations also warned that high oil prices raise the risk of either inflation or recession.

Nevertheless, the Economic Commission for Latin America and the Caribbean (ECLAC) still forecasts growth of 4% for 2005. Strong recovery in some countries, such as Venezuela and Uruguay, boosted the overall performance of the region. ECLAC also said that the six largest Latin American economies (Argentina, Brazil, Chile, Colombia, Mexico and Venezuela) grew by more than 3% for only the second time in 20 years. Chinese and US economic strength helped boost exports, as did strong demand for agricultural and mining products. In fact, Latin American exports to China grew 34%, to $14bn. Higher oil prices also helped boost exports, as Mexico and Venezuela are important oil exporters. Regional blocs as well as free trade agreements with the US contributed to the region's strong performance, the IADB said.
Troubled Marsh under SEC scrutiny

The US stock market regulator is investigating troubled insurance broker Marsh & McLennan's shareholder transactions, the firm has said.

The Securities and Exchange Commission has asked for information about transactions involving holders of 5% or more of the firm's shares. Marsh has said it is co-operating fully with the SEC investigation. Marsh is also the focus of an inquiry the New York attorney-general into whether insurers rigged the market. Since that inquiry was launched in October, Marsh has replaced its chief executive and held a boardroom shake-out to meet criticism by lessening the number of company executives on the board. Prosecutors allege that Marsh - the world's biggest insurance broker - and other US insurance firms may have fixed bids for corporate cover. This is the issue at the heart of the inquiry by New York's top law officer, Eliot Spitzer, and a separate prosecution of five insurers by the State of California. The SEC's investigation into so-called related party transactions includes dealings in the Trident Funds, managed by MMC Capital, the company's private equity firm. Marsh's new chief executive, Michael Cherkasky, is trying to negotiate a settlement with Mr Spitzer. Mr Spitzer has built up a reputation as a fierce critic and campaigner against corporate America's misdeeds.

The uncertainty unleashed by the scandal has prompted three credit rating agencies - Standard & Poor's, Moody's and Fitch - to downgrade Marsh in recent weeks. According to the Financial Times, insurance analysts are now questioning whether Marsh will be able to maintain its strong record of earning growth as they draw up forecasts for the first quarter of next year. Doubts also exist over how much the company may have to pay regulators and lawyers to put the scandal behind.
Nasdaq planning $100m share sale

The owner of the technology-dominated Nasdaq stock index plans to sell shares to the public and list itself on the market it operates.

According to a registration document filed with the Securities and Exchange Commission, Nasdaq Stock Market plans to raise $100m (£52m) from the sale. Some observers see this as another step closer to a full public listing. However Nasdaq, an icon of the 1990s technology boom, recently poured cold water on those suggestions.

The company first sold shares in private placements during 2000 and 2001. It technically went public in 2002 when the stock started trading on the OTC Bulletin Board, which lists equities that trade only occasionally. Nasdaq will not make money from the sale, only investors who bought shares in the private placings, the filing documents said. The Nasdaq is made up shares in technology firms and other companies with high growth potential. It was the most potent symbol of the 1990s internet and telecoms boom, nose-diving after the bubble burst. A recovery in the fortunes of tech giants such as Intel, and dot.com survivors such as Amazon has helped revive its fortunes.
Google shares fall as staff sell

Shares in Google have fallen 6.7% after employees and early investors in the web search took advantage of the first chance to sell their holdings.

Restrictions were imposed ahead of its flotation in August, to prevent shares being dumped quickly onto the market. In one of the most closely-watched initial public offerings in stock market history, the US-based company sold 19.6 million shares at $85 each. Google shares have risen since but fell $12.33 on Tuesday to close at $172.55. The restriction - known as a lockup - is being eased piecemeal: in all, some 227 million additional shares will become free to trade by February 2005. Selling the shares could turn many of Google's workers into millionaires.

There were fears that the potential increase of shares in circulation from Tuesday would ease demand for stock. However, analysts say they expected most shareholders would be holding back from selling all their shares immediately, as Google's good performance and future growth potential means demand will hold.

In its first earnings report since floating on the stock market, Google said it made a net profit of $52m in the three months ending 30 September. Sales surged to $805.9m in the third quarter, up from $393.9m a year earlier. Google's main service - its internet search - is free to users, so the firm makes much of its money from selling advertising space linked to the words for which its users search. It also sells the use of its technology to companies who need to make either their websites, or their internal information systems, searchable.
Five million Germans out of work

Germany's unemployment figure rose above the psychologically important level of five million last month.

On Wednesday, the German Federal Labour Agency said the jobless total had reached 5.037 million in January, which takes the jobless rate to 12.1%. "Yes, we have effectively more than five million people unemployed," a government minister said earlier on ZDF public television. Unemployment has not been this high in Germany since the 1930s.

Changes to the way the statistics are compiled partly explain the jump of 572,900 in the numbers. But the figures are embarrassing for the government. "With the figures apparently the worst we've seen in the post-war period, these numbers are very charged politically," said Christian Jasperneite, an economist with MM Warburg. "They could well put an end to the recent renaissance we've seen by the SPD [the ruling Social Democrats] in the polls, and with state elections due in Schleswig-Holstein and North Rhine-Westphalia, they may have an adverse effect on the government's chances there."

The opposition also made political capital from the figures. It said there are a further 1.5 million-2 million people on subsidised employment schemes who are, in fact, looking for real jobs. It added that government reforms, including unpopular benefit cuts, do not go far enough. Under the government's controversial "Hartz IV" reforms, which came into effect at the beginning of the year, both those on unemployment benefits and welfare support and those who are long-term unemployed are officially classified as looking for work. The bad winter weather also took its toll, as key sectors such as the construction sector laid off workers. Adjusted for the seasonal factors, the German jobless total rose by 227,000 in January from December.
India power shares jump on debut

Shares in India's largest power producer, National Thermal Power Corp (NTPC) have risen 13% on their stock market debut.

The government's partial sell-off of NTPC is part of a controversial programme to privatise state-run firms. The 865 million share offer, a mix of new shares and sales by the government, raised 54bn rupees($1.2bn). It was India's second $1bn stock debut in three months, coming after the flotation by software firm Tata. The share offer was eleven times oversubscribed. "It is a good investment bet," said Suhas Naik, an investment analyst from ING Mutual Fund. "Power needs in India are set to rise and NTPC will benefit from that." Analysts say the success of the NTPC flotation would encourage the government to reduce stakes in more power companies. NTPC has said it will use the money from the share sale to feed the growing needs of the country's energy-starved economy. The firm is the largest utility company in India, and the sixth largest power producer in the world.
SBC plans post-takeover job cuts

US phone company SBC Communications said it expects to cut around 12,800 jobs following its $16bn (£8.5bn) takeover of former parent AT&T.

SBC said 5,125 positions would go as a result of network efficiencies. Another 1,700 will go from its sales department, 3,400 from business operations and 2,600 across legal, advertising and public relations. SBC currently employs 163,000 people while AT&T employs 47,000. The takeover was announced on Monday. The deal will be financed with $15bn of shares as well as a $1bn special dividend paid to AT&T shareholders.

It effectively marks the end of AT&T, which was founded in 1875 by telephone pioneer Alexander Graham Bell and is one of the US's best-known companies. SBC and AT&T said estimated cost savings of at least $2bn from 2008 were a main driver for the merger. AT&T is a long-distance telecoms firm, while SBC is mainly focused on the local market in the western US. Both also have data network businesses. The takeover is subject to approval by AT&T's shareholders and regulators. The companies said they expected to complete the agreement during the first half of 2006.
Amex shares up on spin-off news

Shares in American Express surged more than 8% on Tuesday after it said it was to spin off its less profitable financial advisory subsidiary.

The US credit card to travel services giant said off-loading American Express Financial Advisors (AEFA) would boost its profitability. AEFA has more than 12,000 advisers selling financial advice, funds and insurance to 2.5 million customers. Over the years it has delivered poor profits and even some losses.

"This is an excellent move by American Express to focus on its core businesses, and sell off a laggard division, which has been a problem for quite some time," said Marquis Investment Research analyst Phil Kain. Analysts estimate that a stand-alone AEFA could have a market value of $10bn (£5.3bn). The unit was acquired by American Express 20 years ago as Investors Diversified Service, of Minneapolis, at a time when firms were amassing one-stop financial empires. However, the business of selling investments was never integrated with the rest of the group.
Axa Sun Life cuts bonus payments

Life insurer Axa Sun Life has lowered annual bonus payouts for up to 50,000 with-profits investors.

Regular annual bonus rates on former Axa Equity & Law with-profits policies are to be cut from 2% to 1% for 2004. Axa blamed a poor stock market performance for the cut, adding that recent gains have not yet offset the market falls seen in 2001 and 2002. The cut will hit an estimated 3% of Axa's policyholders. The rest will know their fate in March.

The cuts on Axa's policies will mean a policyholder who had invested £50 a month into an endowment policy for the past 25 years would see a final maturity payout of £46,998. This equated to a annual investment growth rate of 8% Axa said. With-profits policies are designed to smooth out the peaks and troughs of stock market volatility. However, heavy stock market falls throughout 2001 and 2002 forced most firms to trim bonus rates on their policies. "The stock market has grown over the past 18 months, however not enough to undo the damage that occurred during 2001 and 2002," Axa spokesman Mark Hamilton, Axa spokesman, told BBC News. Axa cut payouts for the same investors last January.
Chinese dam firm 'defies Beijing'

The China Three Gorges Project Corp is refusing to obey a government order to stop construction of one of its giant dams, the Chinese state press has said.

The builder of the Three Gorges Dam is continuing work on the sister Xiluodu dam, said the Beijing News. The Xiluodu dam is one of 30 such large-scale construction projects called to a halt because of a lack of proper environmental checks. The Beijing News said the company may instead choose to pay a fine. The firm has also ignored orders to stop construction at two of its other projects - the Three Gorges Underground Power Plant and the Three Gorges Project Electrical Power Supply Plant.

So far, only 22 of the 30 construction projects targeted by China's State Environmental Protection Agency (Sepa) for having not carried out mandatory environmental impact assessments have complied with its shutdown order. The China Three Gorges Project Corp could now face a fine up to 200,000 yuan ($24,000; £12,700). Last week, it denied that its projects violated regulations. "The Three Gorges Corporation has all along abided by the law and have built our projects in accordance with the law," it said.

The Sepa order comes as the Chinese government appears to be trying to cool the country's booming economy. Previously it has encouraged construction of new electricity generating capacity to solve chronic energy shortages, which forced many factories into part-time working last year. In 2004, China increased its generating capacity by 12.6% to 440,700 megawatts (MW). The Xiluodu Dam is designed to produce 12,600 MW of electricity, and is being built on the Jinshajiang - or "river of golden sand" as the upper reaches of the Yangtze are known. It is a sister project to the main Three Gorges Dam downstream where more than half a million people have had to be relocated, drawing criticism from environmental groups and overseas human rights activists.
Stock market eyes Japan recovery

Japanese shares have ended the year at their highest level since 13 July amidst hopes of an economic recovery during 2005.

The Nikkei index of leading shares gained 7.6% during the year to close at 11,488.76 points. In 2005 it "will rise toward 13,000", predicted Morgan Stanley equity strategist Naoki Kamiyama. The optimism in the financial markets contrast sharply with pessimism in the Japanese business community. Earlier this month, the quarterly Tankan survey of Japanese manufacturers found that business confidence had weakened for the first time since March 2003.

Slower economic growth, rising oil prices, a stronger yen and weaker exports were blamed for the fall in confidence. Despite this, traders expect strength in the global economy to benefit Japan, which has been close to sliding into recession in recent months. Structural reform within Japan and an anticipated end to the banking sector's bad debt problems should also help, they say.
EU 'too slow' on economic reforms

Most EU countries have failed to put in place policies aimed at making Europe the world's most competitive economy by the end of the decade, a report says.

The study, undertaken by the European Commission, sought to assess how far the EU has moved towards meeting its economic targets. In 2000, EU leaders at a summit in Lisbon pledged the European economy would outstrip that of the US by 2010. Their economic targets became known as the Lisbon Agenda. But the Commission report says that, in most EU countries, the pace of economic reform has been too slow, and fulfilling the Lisbon ambitions will be difficult - if not impossible.

Only the UK, Finland, Belgium, Denmark, Ireland and the Netherlands have actually followed up policy recommendations. Among the biggest laggards, according to the report, are Greece and Italy. The Lisbon Agenda set out to increase the number of people employed in Europe by encouraging more older people and women to stay in the workforce. It also set out to raise the amount the private sector spends on research and development, while bringing about greater discipline over public spending and debt levels. Combined with high environmental standards and efforts to level the playing field for businesses throughout the EU, the plan was for Europe to become the world's most dynamic economy by 2010. Next week, the Commission will present revised proposals to meet the Lisbon goals. Many people expect the 2010 target to be quietly dropped.
GE sees 'excellent' world economy

US behemoth General Electric has posted an 18% jump in quarterly sales, and in profits, and declared itself "in great shape".

"We are benefiting from our growth initiatives and an excellent global economy," said GE's chief executive Jeff Immelt. GE is the US' biggest firm based on stock market valuation. GE's net profits were $5.37bn (£2.86bn) for the final three months of 2004, while sales came in at $43.7bn. The group, whose businesses range from jet engines to the NBC television channel, forecast sustained growth at between 10-15% for this year and next. GE's shares rose 1% on the news before ending Friday 0.24% lower.

"The industries GE is in are doing very well. The materials, financial and industrial sectors are all picking up," said Steve Roukis, an analyst at fund manager Matrix Asset Advisors, which has shares in GE. GE said orders in the fourth quarter were 15% higher than in the same period of 2003, "with growth across the board". "In the fourth quarter, nine of our 11 businesses delivered at least double-digit earnings growth," said Mr Immelt. Full year 2004 gains were less spectacular, but still respectable. Net profit was up 6% at $16.6bn. Last year, GE bought Vivendi Universal, merging it with NBC to form NBC Universal. The success of Universal Studio's film 'Ray', a portrait of jazz musician Ray Charles, has helped boost earnings at the unit.
UK economy facing 'major risks'

The UK manufacturing sector will continue to face "serious challenges" over the next two years, the British Chamber of Commerce (BCC) has said.

The group's quarterly survey of companies found exports had picked up in the last three months of 2004 to their best levels in eight years. The rise came despite exchange rates being cited as a major concern. However, the BCC found the whole UK economy still faced "major risks" and warned that growth is set to slow. It recently forecast economic growth will slow from more than 3% in 2004 to a little below 2.5% in both 2005 and 2006.

Manufacturers' domestic sales growth fell back slightly in the quarter, the survey of 5,196 firms found. Employment in manufacturing also fell and job expectations were at their lowest level for a year.

"Despite some positive news for the export sector, there are worrying signs for manufacturing," the BCC said. "These results reinforce our concern over the sector's persistent inability to sustain recovery." The outlook for the service sector was "uncertain" despite an increase in exports and orders over the quarter, the BCC noted.

The BCC found confidence increased in the quarter across both the manufacturing and service sectors although overall it failed to reach the levels at the start of 2004. The reduced threat of interest rate increases had contributed to improved confidence, it said. The Bank of England raised interest rates five times between November 2003 and August last year. But rates have been kept on hold since then amid signs of falling consumer confidence and a slowdown in output. "The pressure on costs and margins, the relentless increase in regulations, and the threat of higher taxes remain serious problems," BCC director general David Frost said. "While consumer spending is set to decelerate significantly over the next 12-18 months, it is unlikely that investment and exports will rise sufficiently strongly to pick up the slack."
Business confidence dips in Japan

Business confidence among Japanese manufacturers has weakened for the first time since March 2003, the quarterly Tankan survey has found.

Slower economic growth, rising oil prices, a stronger yen and weaker exports were blamed for the fall. December's confidence level was below that seen in September, the Bank of Japan said. However, September's reading was the strongest for 13 years. "The economy is at a pause but unlikely to fall", the economy minister said. "It will feel a bit slower (next year) than this year, and growth may be a bit more gentle but the situation is that the recovery will continue," said economy minister Heizo Takenaka. In the Bank of Japan's December survey, the balance of big manufacturers saying business conditions are better, minus those saying they are worse, was 22, down from 26 in September.

Japan's economy grew by just 0.1% in the three months to September, according revised data issued this month. With the recovery slowing, the world's second biggest economy is now expected grow by 0.2% in 2004. The Tankan index is based on a survey of 10,227 firms. Big manufacturers were even more pessimistic about the first quarter of 2005; their views suggest the March reading could go as low as 15 - still in positive territory, but weaker. The dollar's decline has strengthened the yen, making Japanese exports more expensive in the US. China's attempts to cool down its fast-growing economy have also hit Japanese industry's sales abroad. Confidence among non-manufacturers was unchanged in the final quarter of 2004, but it is forecast to drop one point in the March survey. Nonetheless, Japanese firms have been stepping up capital investment, and the survey found the pace is quickening. Companies reported they expect to invest 7.7% more in the year to March 2005 than the previous year - up from expectations of 6.1% increase in the September Tankan.
Dutch bank to lay off 2,850 staff

ABN Amro, the Netherlands' largest bank, is to cut 2,850 jobs as a result of falling profits.

The cuts - amounting to 3% of the bank's workforce - will result in a one-off charge of 790m euros ($1.1bn). About 1,100 jobs will go in investment banking while 1,200 and 550 will go in IT and human resources respectively. ABN Amro is the third large European bank to announce cutbacks in the past month following Deutsche Bank and Credit Suisse Group.

Its profitability has been hit by a fall in mortgage lending in the United States - the bank's largest single market - following recent interest rate rises. ABN Amro's operations in the Netherlands and the United Kingdom will be hardest hit. Jobs will also be lost in the US - which accounted for 46% of profit in the first half of 2004 - and across its operations in the Americas and Asia-Pacific regions.

The restructuring is designed to improve efficiency by reducing administrative costs and increasing focus on client service. The bank said it was on course for a 10% rise in net income this year but operating profits are set to fall because of a fall in US revenues. ABN Amro currently has more than 100,000 staff. "To get any profit growth in the coming years, they will have to lower costs, so shedding jobs makes total sense," Ivo Geijsen, an analyst with Bank Oyens & Van Eeghen, told Bloomberg. Europe's leading banks seem set for a period of retrenchment. Deutsche Bank said earlier this month it would reduce its German workforce by 1,920 while as many as 300 jobs will be lost at Credit Suisse First Boston.
Fannie Mae 'should restate books'

US mortgage company Fannie Mae should restate its earnings, a move that is likely to put a billion-dollar dent in its accounts, watchdogs have said.

The Securities & Exchange Commission accused Fannie Mae of using techniques that "did not comply in material respects" with accounting standards. Fannie Mae last month warned that some records were incorrect. The other main US mortgage firm Freddie Mac restated earnings by $5bn (£2.6bn) last year after a probe of its books. The SEC's comments are likely to increase pressure on Congress to strengthen supervision of Fannie Mae and Freddie Mac.

The two firms are key parts of the US financial system and effectively underwrite the mortgage market, financing nearly half of all American house purchases and dealing actively in bonds and other financial instruments. The investigation of Freddie Mac in June 2003 sparked concerns about the wider health of the industry and raised questionsmarks over the role of the Office of Federal Housing Enterprise Oversight (OFHEO), the industry's main regulator. Having been pricked into action, the OFHEO turned its attention to Fannie May and in September this year said that the firm had tweaked its books to spread earnings more smoothly across quarters and play down the amount of risk it had taken on. The SEC found similar problems. The watchdog's chief accountant Donald Nicolaisen said that "Fannie Mae's methodology of assessing, measuring and documenting hedge ineffectiveness was inadequate and was not supported" by generally accepted accounting principles.
J&J agrees $25bn Guidant deal

Pharmaceutical giant Johnson & Johnson has agreed to buy medical technology firm Guidant for $25.4bn (£13bn).

Guidant is a key producer of equipment that combats heart problems such as implant defibrillators and pacemakers. Analysts said that the deal is aimed at offsetting Johnson & Johnson's reliance on a slowing drug business. They also pointed out that more mergers are likely because the drug and healthcare industries are fragmented and are under pressure to cut costs. A number of Johnson & Johnson's products are facing patent expirations, while the company is also battling fierce competition from generic products. Meanwhile, demand for defibrillators, which give the heart a small electric shock when an irregular heartbeat or rhythm is detected, is expected to increase, analysts said. The move by Johnson & Johnson has been widely expected and the firm will pay $76 for each Guidant share, 6% more than Wednesday's closing price. Analysts say that US antitrust regulators could force the firms to shed some overlapping stent operations. Stents are tubes that are used to keep an artery open after it has been unblocked.
Libya takes $1bn in unfrozen funds

Libya has withdrawn $1bn in assets from the US, assets which had previously been frozen for almost 20 years, the Libyan central bank has said.

The move came after the US lifted a trade ban to reward Tripoli for giving up weapons of mass destruction and vowing to compensate Lockerbie victims. The original size of Libya's funds was $400m, the central bank told Reuters. However, the withdrawal did not mean that Libya had cut its ties with the US, he added.

"We are in the process of opening accounts in banks in the United States," the central bank's vice president Farhat Omar Ben Gadaravice said. The previously frozen assets had been invested in various countries and are believed to have included equity holdings in banks. The US ban on trade and economic activity with Tripoli - imposed by then president Ronald Regan in 1986 after a series of what the US deemed terrorist acts, including the 1988 Lockerbie air crash - was suspended in April. Bankers from the two country's had been working on how to unfreeze Libya's assets.
Cactus diet deal for Phytopharm

A slimming aid made from a southern African cactus is set to be developed by UK firm Phytopharm and Unilever.

Anglo-Dutch food giant Unilever will help the pharmaceutical firm develop the snacks containing Hoodia extract. Phytopharm shares jumped 10.7% on the news, with analysts saying sales of $600m (£309m) a year were possible. The plant, licensed to Phytopharm in 1997, has been used for thousands of years by the Sans bushmen of the Kalahari desert to stave off hunger. Studies have reportedly shown the plant curbs appetite instead of reducing calorific intake like many existing products.

Phytopharm will receive an initial fee of £6.5m from Unilever - out of a potential total of £21m - as well as future royalties on product sales. Under the deal, production of the Hoodia cactus at Phytopharm's nursery in South Africa will also rise from eight million plants to potentially hundreds of millions, said Phytopharm chief executive Richard Dixey. The firm had initially hoped to market a slimming drug from Hoodia with Pfizer. But the research collaboration came to an end in 2003. Analysts said Unilever could launch the new products in 2007. "This deal goes a long way to restoring the market faith in Phytopharm's pipeline after the Pfizer exit," said analyst Erling Refsum at Nomura.
Brazil plays down Varig rescue

The Brazilian government has played down claims that it could step in to save the country's biggest airline.

Brazil's airport authority chief Carlos Wilson had claimed the government was on the brink of stepping in to save Varig, Brazil's flagship airline. However, the country's vice president Jose Alencar has said the government still is looking for a solution. Varig is struggling under a huge debt burden of an estimated debt of 6.5 billion reais ($2.3bn or £1.2bn). Asked whether a rescue was on the cards following a meeting of the country's Congress to discuss the airline's crisis, Mr Alencar replied: "No, I don't think so. We will see."

Earlier, Mr Wilson had said that president Luiz Inacio Lula da Silva has decided to step in and a decree of some kind of intervention could be signed this week. "In practice, it will be an intervention, although this is not the technical name used", he said. An intervention means that the government would take administrative control of the company and its finances. For that to happen Varig's main shareholder, the non-profit Ruben Berta Foundation which represents the airline's employees, would have to be removed, Mr Wilson said. However, no jobs would be lost and the airline would keep on flying, he added. Varig, which operates in 18 countries apart from Brazil, has been driven to the brink of collapse because of the country's economic downturn.

The depreciation of Brazil's currency has had a direct impact on the airline's dollar debt as well as some of its costs. Business has improved recently with demand for air travel increasing and a recovery in the Brazilian economy. The airline could also win a sizeable windfall from a compensation claim against the government. On Tuesday the courts awarded Varig 2bn reais ($725m), after ruling in favour of its compensation claim against the government for freezing tariffs from 1985 to 1992. But the government can appeal the decision.
Bombardier chief to leave company

Shares in train and plane-making giant Bombardier have fallen to a 10-year low following the departure of its chief executive and two members of the board.

Paul Tellier, who was also Bombardier's president, left the company amid an ongoing restructuring. Laurent Beaudoin, part of the family that controls the Montreal-based firm, will take on the role of CEO under a newly created management structure. Analysts said the resignations seem to have stemmed from a boardroom dispute. Under Mr Tellier's tenure at the company, which began in January 2003, plans to cut the worldwide workforce of 75,000 by almost a third by 2006 were announced. The firm's snowmobile division and defence services unit were also sold and Bombardier started the development of a new aircraft seating 110 to 135 passengers.

Mr Tellier had indicated he wanted to stay at the world's top train maker and third largest manufacturer of civil aircraft until the restructuring was complete. But Bombardier has been faced with a declining share price and profits. Earlier this month the firm said it earned $10m (£19.2m) in the third quarter, down from a profit of $133m a year ago. "I understand the board's concern that I would not be there for the long-term and the need to develop and execute strategies, and the need to reshape the management structure at this time," Mr Tellier said in a statement on Monday. Bombardier said restructuring plans drawn up by Mr Tellier's would continue to be implemented. Shares in Bombardier lost 65 Canadian cents or 25% on the news to 1.90 Canadian dollars before rallying to 2.20 Canadian dollars.
Brazil approves bankruptcy reform

A major reform of Brazil's bankruptcy laws has been approved by the country's Congress, in a move which it is hoped will cut the cost of borrowing.

The bill, proposed in 1993, has finally been approved by the leadership of President Luiz Inacio Lula da Silva. The old law, dating from 1945, gave priority first to workers, second to tax revenue and finally to creditors. The new legislation changes this, giving priority to creditors and limiting payments to workers. The new regulations will limit payments to workers to 150 times the minimum monthly salary, which is currently $94. The law also makes it more difficult for a company to declare bankruptcy. However, when a firm is declared bankrupt it will gain protection from creditors for 180 days while a recovery plan is worked out.

The proposals were opposed in the past by leftist parties, including Mr Lula's Worker Party. They considered that they undermined workers' rights. But President Lula became a defender of the reforms, arguing that the country's bank lending margins were among the highest in the world and were damaging the economy. According to Andreas Adriano of Latin Trade Magazine, the new bankruptcy law will help in reducing the spread - difference between the interest rates of the banks and federal bonds. Nevertheless, Mr Adriano said to reduce the basic interest rate the Central Bank needs to change its policy, focusing not only on inflation but also on economic growth.
Retail sales show festive fervour

UK retail sales were better than expected in November as Christmas shoppers began their seasonal flock to the High Street, figures show.

The Office for National Statistics (ONS) said retail sales rose 0.6% on the month and 6.1% on the year. But the figures, along with this week's inflation report, could trigger another interest rate rise in the New Year. However, recent data from the British Retail Consortium showed a 0.2% slip in High Street sales during November.

The ONS data confounded analyst expectations. Many had expected sales to fall slightly in November as shoppers put off buying Christmas presents until December. However, retailers' attempts to draw in the crowds may be behind November's unexpected rise in sales, they say. Aggressive tactics, such as one-day discount sales adopted by stores such as Marks & Spencer, appear to have paid off. "Price discounting has certainly accounted for much of this because the value of retail sales hasn't grown as much as volumes," said Investec economist David Page. The figures sparked a rally for sterling as the data supported the view that it is too early to assume that base rates have peaked.
French boss to leave EADS

The French co-head of European defence and aerospace group EADS Philippe Camus is to leave his post.

Mr Camus said in a statement that he has accepted the invitation to return full-time to the Lagardere group, which owns 30% of EADS. "I will give up my role as soon as the board of directors asks me to do so," he said. Airbus head Noel Forgeard is now set to replace Mr Camus, bringing the company's power struggle to an end. Fighting between Mr Camus and Mr Forgeard has hit the headlines in France and analysts feared that this fighting could destabilise the defence and aerospace group. French finance minister Herve Gaymard is on record as saying that he "deplored" the infighting at the company. The company should now be able put this dispute behind it, with the departure of Mr Camus and with the clear support given to Mr Forgeard by the Lagardere group, the main French shareholder of EADS. The other main shareholders of EADS are the French government (15%) , who also support Mr Forgeard, and Germany's DaimlerChrysler (30%). Rainer Hertrich, the German co-head of EADS will also step down when his contract expires next year.

Mr Camus recently came under pressure as it became clear that the A380 superjumbo was running over budget. EADS - Airbus' majority owner - admitted earlier this week that the project was running 1.45bn euros (£1bn; $1.9bn) over budget. But Mr Forgeard has denied this, telling French media that there is no current overrun in the budget. "But for the sake of transparency, we told our shareholders last week that if we look at the forecast for total costs of the project up to 2010, there is a risk that we will go over by around 10%, which is about 1bn euros (£686m; $1.32bn)," he told France's LCI Television. Due to enter service in 2006, the A380 will replace the Boeing 747 jumbo as the world's biggest passenger aircraft.
AstraZeneca hit by drug failure

Shares in Anglo-Swedish drug have closed down 8% in UK trade after the failure of its Iressa drug in a major clinical trial.

The lung cancer drug did not significantly prolong survival in patients with the disease. This setback for the group follows the rejection by the US in October of its anti-coagulant pill Exanta. Meanwhile, another of its major money spinners - cholesterol drug Crestor - is facing mounting safety concerns. "This would be two of the three blockbuster drugs that were meant to power the company forward failing... and we've got risks on Crestor," said Nick Turner, analyst at brokers Jefferies.

AstraZeneca had hoped to pitch its Iressa drug against rival medicine Tarceva. But Iressa proved no better than a placebo in extending lives in the trial involving 1,692 patients. Tarceva - made by OSI Pharmaceuticals, Genentech and Roche - has already proved to be successful in helping prolong the life of lung cancer patients. AztraZeneca has now appointed a new executive director to the board. John Patterson will be in charge of drug development. The company said Mr Patterson would make "substantial changes to the clinical organisation and its processes". "I am determined to improve our development and regulatory performance, restore confidence in the company and value to shareholders," said chief executive Tom McKillop.
Strong quarterly growth for Nike

Nike has reported its best second-quarter earnings, helped by strong demand for its athletic shoes and Converse sneakers.

The global sports giant said it posted a profit of $261.9m (£135.6m), for the three months to 30 November, up from $179.1m in the same period last year. Revenues increased 11% to $3.1bn, from $2.8bn for the same period in 2003. Nike, whose products are endorsed by Tiger Woods among other sports stars, said "demand continues to grow". The results came after a strong first quarter of the year for the firm based in Beaverton, Oregon.

Philip Knight, chairman and chief executive, said: "Nike's second-quarter revenues and earnings per share reached all-time high levels as a result of solid performance across our global portfolio. "Our businesses in the United States and emerging markets such as China, Russia and Turkey, combined with favourable European exchange rates, helped drive much of this growth." He added: "With the first half of our fiscal year in the books, we remain confident that our business strategy and consistent execution will allow us to deliver on our goals of healthy, profitable growth." The firm reported worldwide futures orders for athletic footwear and gear, scheduled for delivery from December 2004 to April 2005, of $4.9bn. That is 9.1% higher than such orders reported for the same period last year.
Stormy year for property insurers

A string of storms, typhoons and earthquakes has made 2004 the most expensive year on record for property insurers, according to Swiss Re.

The world's second biggest insurer said disasters around the globe have seen property claims reach $42bn (£21.5bn). "2004 reinforces the trend towards higher losses," said Swiss Re. Tightly packed populations in the areas involved in natural and man-made disasters were to partly to blame for the rise in claims, it said. Some 95% of insurance claims were for natural catastrophes, with the rest attributed to made-made events.

The largest claims came from the US, which was struck by four hurricanes, and Japan, which suffered the highest concentration of typhoons for decades plus a major earthquake.

Europe suffered fewer natural disasters, but 191 people were killed and more than 2,000 injured in March after the terrorist attack on train stations in Madrid. The damages claimed in 2004 eclipsed previous years, including 2001 when the 11 September attacks pushed claims up to $37bn. Swiss Re said it had registered about 300 natural and man-made disasters around the world in 2004. Twenty-one thousand people lost their lives in the catastrophes with a cost to the global economy of around $105bn (£54bn).
Parmalat sues 45 banks over crash

Parmalat has sued 45 banks as it tries to reclaim money paid to banks before the scandal-hit Italian dairy company went bust last year.

The firm collapsed with debts of about 14bn euros ($19bn; £10bn) and new boss Enrico Bondi has already taken legal action against a number of lenders. He claims the banks were aware of the problems but continued to work with the company so they could earn commissions. Parmalat has not identified which banks it has gone after this time. Under Italian law, administrators can seek to get back money paid to financial institutions prior to insolvency, if there is a suspicion that the institutions knew that the company was in financial trouble. The firm also said it is preparing further law suits.

According to the Reuters news agency, 35 of the companies sued on Thursday are Italian while the remaining 10 are international. The unidentified Parmalat source also told Reuters that the company was planning to take action against a total of 80 financial institutions. Among those already targeted are Bank of America, UBS, Credit Suisse First Boston, Deutsche Bank and Citigroup. It has also gone after auditors Grant Thornton. They have all denied any wrongdoing. Parmalat was declared insolvent in December 2003 after it emerged that 4bn euros thought to be held in an offshore account did not in fact exist. In the investigation that followed it became apparent that the company, among other things, had been billing clients twice in order to boost sales and bolster the balance sheet. That enabled Parmalat to borrow heavily and expand overseas, allowing it to become a darling of the Italian stock exchange.
Irish company hit by Iraqi report

Shares in Irish oil company Petrel Resources have lost more than 50% of their value on a report that the firm has failed to win a contract in Iraq.

Reuters news agency reported that Iraq's Oil Ministry has awarded the first post-war oilfield contracts to a Canadian and a Turkish company. By 1700 GMT, Petrel's shares fell from 97p ($1.87) to 44p ($0.85). Petrel said that it has not received any information from Iraqi authorities to confirm or deny the report.

Iraq is seeking to award contracts for three projects, valued at $500m (£258.5m). Turkey's Everasia is reported by Reuters to have won a contract to develop the Khurmala Dome field in the north of the country. A Canadian company, named IOG, is reported to have won the contract to run the Himrin field. Ironhorse Oil and Gas has denied to Reuters that it is the company in question. These two projects aim to develop Khurmala field to produce 100,000 barrels per day and raise the output of Himrin. The winners of the contract are to build new flow lines and build gas separation stations. The contract to develop the Suba-Luhais field has not yet been awarded as Iraq's Oil Ministry is studying the offers. If Iraq's cabinet approves the oil ministry's choice of companies, then this will be the first deal that Iraq has signed with a foreign oil company. Iraq is still trying to boost its production capacity to match levels last seen in the eighties, before the war with Iran. Oil officials hope to double Iraq's output by the end of the decade.
S&N extends Indian beer venture

The UK's biggest brewer, Scottish and Newcastle (S&N), is to buy 37.5% of India's United Breweries in a deal worth 4.66bn rupees ($106m:£54.6m).

S&N will buy a 17.5% equity stake in United, maker of the well-known Kingfisher lager brand, and make a public offer to buy another 20% stake. A similar holding will be controlled by Vijay Mallya, chair of the Indian firm. The deal was a "natural development" of its joint venture with United, said Tony Froggatt, S&N's chief executive.

Its top brands include Newcastle Brown Ale, Foster's, John Smith's, Strongbow and Kronenbourg. In 2002 S&N and United agreed to form a strategic partnership, one that would include a joint venture business and a UK investment in the Indian brewer. The joint venture was established in May 2003. with both parties having a 40% stake in the venture - Millennium Alcobev. Millennium Alcobev will now be merged with United, which expects post-merger to have about half of India's beer market.

India, with a population of more than one billion, consumes about 1.2 billion bottles of beer every year. Kingfisher has market share of about 29%. In addition to the equity stake S&N is to invest 2.47bn rupees in United through non-convertible redeemable preference shares. Meanwhile, United's budget airline, Kingfisher Airlines, is to buy 10 A320 aircraft from Airbus and has the option to buy 20 more aircraft in a deal worth up to $1.8bn. The airline, the brainchild of Mr Mallya, expects to start its operations by the end of April. The new airline would break even in the very first year of operation, Mr Mallya said.
Euronext joins bid battle for LSE

Pan-European stock market Euronext has approached the London Stock Exchange (LSE) about a possible takeover bid.

"The approach is at an early stage and therefore does not require a response at this point," LSE said. Talks with the European stock market and with rival bidder Deutsche Boerse will continue, the LSE said. Last week, the group rejected a £1.3bn ($2.5bn) takeover offer from Deutsche Boerse, claiming that it undervalued the business. LSE saw its shares surge 4.9% to a new high of 583p in early trade, following the announcement on Monday.

The offer follows widespread media speculation that Euronext would make an offer for LSE. Experts now widely expect a bidding war for Europe's biggest stock market, which lists stocks with a total capitalisation of £1.4 trillion, to break out. Commentators say that a deal with Euronext, which owns the Liffe derivatives exchange in London and combines the Paris, Amsterdam and Lisbon stock exchanges, could potentially offer the LSE more cost savings than a deal with Deutsche Boerse.

A weekend report in the Telegraph had quoted an unnamed executive at Euronext as saying the group would make a cash bid to trump Deutsche Boerse's offer. "Because we already own Liffe in London, the cost savings available to us from a merger are far greater than for Deutsche Boerse," the newspaper quoted the executive as saying. Euronext chief executive Jean-Francois Theodore is reported to have already held private talks with LSE's chief executive Clara Furse. Further reports had suggested that Euronext could make an offer in excess of the LSE's 533p a share closing price on Friday. However, Euronext said it could not guarantee "at this stage" that a firm offer would be made for LSE. There has been extensive speculation about a possible takeover of the company since an attempted merger with Deutsche Boerse failed in 2000.
Iraq and Afghanistan in WTO talks

The World Trade Organisation (WTO) is to hold membership talks with both Iraq and Afghanistan.

But Iran's bid to join the trade body has been refused after the US blocked its application for the 21st time. The countries stand to reap huge benefits from membership of the group, whose purpose is to promote free trade. Joining, however, is a lengthy process. China's admission in 2001 took 15 years and talks with Russia and Saudi Arabia have been taking place for 10 years. Membership of the Geneva-based WTO helps guarantee a country's goods receives equal treatment in the markets of other member states - a policy which has seen it become closely associated with globalisation.

Iraq's Trade Minister Mohammed Mustafa al-Jibouri welcomed the move, describing it as significant as November's decision by the Paris Club of creditor nations to write off 80% of the country's debts. Assad Omar, Afghanistan's envoy to the United Nations in Geneva, said accession would contribute to "regional prosperity and global security". There are now 27 countries seeking membership of the WTO. Prospective members need to enter into negotiations with potential trading countries and change domestic laws to bring them in line with WTO regulations. Before the process gets under way, all 148 WTO members must give their backing to applicant countries. The US said it could not approve Iran's application because it is currently reviewing relations. But several nations criticised the approach, and European Union ambassador to the WTO, Carlo Trojan, said Iran's application "must be treated independently of political issues".
Diageo to buy US wine firm

Diageo, the world's biggest spirits company, has agreed to buy Californian wine company Chalone for $260m (£134m) in an all-cash deal.

Although Diageo's best-known brands include Smirnoff vodka and Guinness stout, it already has a US winemaking arm - Diageo Chateau & Estate Wines. Diageo said it expects to get US regulatory approval for the deal during the first quarter of 2005. It said Chalone would be integrated into its existing US wine business.

"The US wine market represents a growth opportunity for Diageo, with favourable demographic and consumption trends," said Diageo North America president Ivan Menezes. In July, Diageo, which is listed on the London Stock Exchange, reported an annual turnover of £8.89bn, down from £9.28bn a year earlier. It blamed a weaker dollar for its lower turnover. In the year ending 31 December 2003, Chalone reported revenues of $69.4m.
Tokyo says deflation 'controlled'

The Japanese government has forecast that the country's economic growth will slow to 1.6% in the next fiscal year starting in April 2005.

While it predicts this fall from the current 2.1% level, it said it was making progress on ending deflation. The figures were given by economics minister Heizo Takenaka who said the economy would grow by 2% in 2006/07. He said the consumer price index (CPI) would rise 0.1% in the next fiscal year, the first gain since 2000/01. "We are attempting to make real economic conditions better and to overcome deflation. I think we are on track," said Mr Takenaka. Deflation - or falling consumer prices - has plagued Japan for more than five years. To ease the problem the Bank of Japan has regularly flooded the money market with excess cash to keep short term interest rates at 0% in an attempt to spur economic activity.
Indy buys into India paper

Irish publishing group Independent News & Media is buying up a 26% stake in Indian newspaper company Jagran in a deal worth 25m euros ($34.1m).

Jagran publishes India's top-selling daily newspaper, the Hindi-language Dainik Jagran, which has been in circulation for 62 years. News of the deal came as the group announced that its results would meet market forecasts. The company reported strong revenue growth across all its major markets.

Group advertising revenues were up over 10% year-on-year, the group said, with overall circulation revenues are expected to increase almost 10% year-on-year. This was helped by the positive impact of "compact" newspaper editions in Ireland and the UK, it said. "2004 has proven to be an important year for Independent News & Media," said chief executive Sir Anthony O'Reilly. "Our simple aim at Independent is to be the low cost producer in every region in which we operate. I am confident that we will show a meaningful increase in earnings for 2005."

Meanwhile, the group made no comment about the future of the Independent newspaper despite recent speculation that Sir Anthony had held talks with potential buyers over a stake in the daily publication. He has consistently denied suggestions that the Independent and the Independent on Sunday are up for sale. Buy it is understood that the recent success of the smaller edition of the Independent, which has pushed circulation up by 20% to 260,000, has prompted interest from industry rivals, with Daily Mail & General Trust tipped as the most likely suitor. The loss-making newspaper is not expected to reach break-even until 2006.
Cannabis hopes for drug firm

A prescription cannabis drug made by UK biotech firm GW Pharmaceuticals is set to be approved in Canada.

The drug is used to treat the central nervous system and alleviate the symptoms of multiple sclerosis (MS). A few weeks ago, shares in GW Pharma lost a third of their value after UK regulators said they wanted more evidence about the drug's benefits. But now Canadian authorities have said the Sativex drug will be considered for approval.

Approximately 50,000 people in Canada have been diagnosed with MS and 85,000 people are suffering from the condition in the UK. Many patients already smoke cannabis to relieve their symptoms.

Now, GW Pharma's Sativex mouth spray could be legally available to MS sufferers in Canada within the next few months. This will be the first time a cannabis-based drug has been approved anywhere in the world, representing a landmark for GW Pharma and for patients with MS. Final approval in Canada should now be little more than a formality, analysts said, and the company expects full approval for Sativex early in 2005. "We are delighted to receive this qualifying notice from Health Canada and look forward to receiving regulatory approval for Sativex in Canada in the early part of 2005," said GW Pharma executive chairman Dr Geoffrey Guy.

The UK government granted GW Pharma a licence to grow the cannabis plant for medical research purposes. Satifex consists of a cannabis extract containing tetrahydrocannabinol and cannabidiol, a cocktail that has also proved effective in treating patients with arthritis. Thousands of plants are grown at a secret location somewhere in the English countryside. Despite hopes of regulatory approval last year, a series of delays has put back Sativex's launch in the UK. The latest news sent shares in GW Pharma up 8.5p, or 8.1%, to 113.5p.
Bush to get 'tough' on deficit

US president George W Bush has pledged to introduce a "tough" federal budget next February in a bid to halve the country's deficit in five years.

The US budget and its trade deficit are both deep in the red, helping to push the dollar to lows against the euro and fuelling fears about the economy. Mr Bush indicated there would be "strict discipline" on non-defence spending in the budget. The vow to cut the deficit had been one of his re-election declarations. The federal budget deficit hit a record $412bn (£211.6bn) in the 12 months to 30 September and $377bn in the previous year.

"We will submit a budget that fits the times," Mr Bush said. "It will provide every tool and resource to the military, will protect the homeland, and meet other priorities of the government." The US has said it is committed to a strong dollar. But the dollar's weakness has hit European and Asian exporters and lead to calls for US intervention to boost the currency. Mr Bush, however, has said the best way to halt the dollar's slide is to deal with the US deficit. "It's a budget that I think will send the right signal to the financial markets and to those concerned about our short-term deficits," Mr Bush added. "As well, we've got to deal with the long-term deficit issues."
House prices drop as sales slow

House prices fell further in November and property sale times lengthened as rate rises took their toll, the Royal Institute of Chartered Surveyors found.

A total of 48% of chartered surveyor estate agents reported lower prices in the three months to November - the highest level in 12 years. Meanwhile the number of sales dropped 32% to an average of 22 per surveyor. The amount of unsold properties on their books rose for the sixth month in a row to an average of 67 properties. "The slowdown occurring in the market has given buyers more power to negotiate, but this time of year is traditionally a quiet one," RICS housing spokesman Ian Perry said. "The decision by the Bank of England not to increase interest rates further and the healthy economy is allowing confidence to consolidate."

The figures support recent data from the government and other bodies which all point to a slowdown in the housing market. On Monday, the Council of Mortgage Lenders, British Bankers Association and Building Societies Association all said mortgage lending was slowing. The figures were published as another survey by property website Rightmove said the average asking price of a home fell by more than £600 from £190,329 in November to £189,733 in December. Around the UK, the Midlands and South saw the biggest price falls, while London prices fell but at less than the national rate. In Scotland, where prices have remained on an upward path, increases were more "moderate", RICS added. But the news failed to dent confidence that sales will recover in future, with surveyors at their most optimistic in a year - as new purchase inquiries stabilised despite holding at lower levels. "Sales usually pick up in the New Year and I am confident this year will be no exception," Mr Perry added. Looking ahead, the group is anticipating a quiet start to 2005 with the market picking up in the second half - prompting a 3% rise in prices over the coming 12 months.
Disney settles disclosure charges

Walt Disney has settled charges from US federal regulators that it failed to disclose how family members of directors were employed by the company.

The media giant was not fined by the Securities and Exchange Commission, but has agreed to refrain from any future violations of securities law. Disney failed to tell investors that between 1999 and 2001 it employed three adult children of three then directors. The firm has neither admitted nor denied wrongdoing in the settlement.

The three Disney directors in question in the central matter of the SEC's investigation - Reveta Bowers, Stanley Gold and Raymond Watson - have all since left the company, with Ms Bowers and Mr Watson both retiring, and Mr Gold quitting in 2003. Their children were paid between $60,000 (£30,800) and $150,000 a year, with shareholders not being informed. The SEC also found that Disney did not disclose that a 50% Disney-owned subsidiary company - Lifetime - employed the wife of current Disney director John Bryson, and that she earned more than $1m a year. Louise Bryson remains with Lifetime.

Disney also failed to disclose payments to Air Shamrock, an airline owned by Mr Gold and fellow former Disney directors Roy Disney. Finally, Disney also did not reveal that it provided more than $200,000 annually for office space, secretarial services, and a leased car and driver to former director Thomas Murphy. "Shareholders have a significant interest in information regarding relationships between the company and its directors," said SEC deputy enforcement director Linda Thomsen. "Failure to comply with the SEC's disclosure rules in this area impedes shareholders' ability to evaluate the objectivity and independence of directors."
Troubled Marsh under SEC scrutiny

The US stock market regulator is investigating troubled insurance broker Marsh & McLennan's shareholder transactions, the firm has said.

The Securities and Exchange Commission has asked for information about transactions involving holders of 5% or more of the firm's shares. Marsh has said it is co-operating fully with the SEC investigation. Marsh is also the focus of an inquiry the New York attorney-general into whether insurers rigged the market. Since that inquiry was launched in October, Marsh has replaced its chief executive and held a boardroom shake-out to meet criticism by lessening the number of company executives on the board. Prosecutors allege that Marsh - the world's biggest insurance broker - and other US insurance firms may have fixed bids for corporate cover. This is the issue at the heart of the inquiry by New York's top law officer, Eliot Spitzer, and a separate prosecution of five insurers by the State of California. The SEC's investigation into so-called related party transactions includes dealings in the Trident Funds, managed by MMC Capital, the company's private equity firm. Marsh's new chief executive, Michael Cherkasky, is trying to negotiate a settlement with Mr Spitzer. Mr Spitzer has built up a reputation as a fierce critic and campaigner against corporate America's misdeeds.

The uncertainty unleashed by the scandal has prompted three credit rating agencies - Standard & Poor's, Moody's and Fitch - to downgrade Marsh in recent weeks. According to the Financial Times, insurance analysts are now questioning whether Marsh will be able to maintain its strong record of earning growth as they draw up forecasts for the first quarter of next year. Doubts also exist over how much the company may have to pay regulators and lawyers to put the scandal behind.
US firm pulls out of Iraq

A US company has pulled out of a major contract to rebuild Iraq's transport system after attacks on reconstruction efforts, Pentagon officials have said.

Contrack International, of Arlington, Virginia, heads a coalition of firms working on a series of schemes. Its withdrawal from the $325m (£170m) contract in November is thought to be the largest cancellation to date. Contrack said "the original scope of work that was envisioned could not be executed in a cost-effective manner". But the firm denied reports it was withdrawing completely from Iraq. "Members of the joint venture including Contrack are committed to the ongoing reconstruction efforts, are actively working in Iraq and continue to look for new construction opportunities in the country," it said in a statement. The Pentagon's Project and Contract Office (PCO) in Baghdad said it had taken over Contrack's management of the subcontractors working on the transportation projects.

US firms and their workers have been targets of attacks, and security concerns are said to be a major reason for the slow pace of reconstruction in Iraq. Of the $18.4bn in reconstruction funds approved by Congress, less than $2bn has been spent. Lt Col Eric Schnaible of the PCO told the Associated Press news agency Contrack's withdrawal from the transportation contract was a "mutually agreed-to separation" and did not indicate a movement by US companies to leave Iraq. "Some parts of the country are a whole lot more permissive than others," he added. "Where we can get the work done, good things are happening."
Boeing secures giant Japan order

Boeing is to supply Japan Airlines with up to 50 of its forthcoming 7E7 planes in a deal that could be worth as much as $6bn (£3.1bn) for the US giant.

Japan Airlines has made a firm order for 30 of the aircraft, at $120m each, with the option to buy 20 more. Asia's biggest airline joins Japanese rival All Nippon as one of the first carriers to order the mid-size 7E7, which Boeing says is super-economical. Airbus this week announced the first pre-sale of its 7E7 rival - the A350. Boeing's great European competitor is to sell 10 of its forthcoming A350 to Spanish carrier Air Europe, which has the option to buy two more in a deal that could be worth more than $1.8bn. Both the 7E7 and the A350 are being designed to be as fuel-efficient as possible in the 200- to 300-seat sector, and each will be available in both short and long range versions.

Japan Airlines said it had looked at both aircraft before choosing the 7E7, also known as the Dreamliner. "We chose the 7E7 after carefully considering both it and Airbus' aircraft," said a Japan Airlines spokesman. "The 7E7 fits better for what we needed and it could be delivered when we hoped to get it." Boeing continues to enjoy a dominance over Airbus in Japan, and Japanese companies are taking key roles in building the 7E7. The first 7E7s will be delivered to Japan Airlines in April 2008. Boeing has set itself a target of getting 200 firm commitments for the 7E7 by the end of this year, and has orders for 56 so far. Airbus hopes to have 50 orders in place for the A350 by mid-2005.
Police detain Chinese milk bosses

Chinese police have detained three top executives at milk firm Yili, with reports suggesting that they are being investigated for embezzlement.

Yili - full name Inner Mongolia Yili Industrial - confirmed its chairman, chief financial officer and securities representative were all in custody. The company, China's third-largest milk producer, is to hold an emergency meeting to debate the issue. A Yili spokesman said it may now move to oust chairman Zheng Junhuai. The spokesman did not say why the three had been detained by the police. The official Xinhua News Agency said the arrest was linked to alleged embezzlement.

Yili has recently been the subject of intense media speculation over its financial operations. Executives are suspected of wrongly using 417m yuan ($50.4m; £26m) of company funds to support a management buyout back in July 2003. Yili's shares were suspended on Tuesday, having fallen by 10% on Monday. The company and its two main rivals - market leader Mengniu Dairy and second place Bright Dairy - dominate a Chinese milk market that has grown by almost 30% over the past five years. Analysts wondered if the scandal at Yili - the latest to befall Chinese companies this year - could be followed by further revelations of corporate wrongdoing. "Investors wonder if Yili's scandal, one of a slew to be uncovered this year, isn't just the tip of the iceberg," said Chen Huiqin, an analyst at Huatai Securities.
India's Deccan seals $1.8bn deal

Air Deccan has ordered 30 Airbus A320 planes in a $1.8bn (£931m) deal as India's first low-cost airline expands in the fast-growing domestic market.

Air Deccan was set up last year and wants to lure travellers away from the railway network and pricier rivals. The potential of the Indian market has attracted attention at home and abroad. Beer magnate Vijay Mallya recently set up Kingfisher Airlines, while UK entrepreneur Richard Branson has said he is keen to start a local operation.

The country has a population of more than a billion people and many observers feel that it is underserved by airlines. Recently however, the booming economy has boosted personal spending power and helped swell the middle classes and the corporate sector. India's government has given its backing to cheaper and more accessible air travel. "The days of flying being a symbol of only maharajas or the rich are over," the minister for civil aviation Praful Patel said earlier. Infrastructure is being built to handle the expected increase in demand and on Tuesday, Agence France Presse reported that a group led by Germany's Siemens won the contract to build a private airport near Bangalore. India's airports authority and the state government will own 13% each of the finished transport hub. For its part, Air Deccan, set up by army officer and silk farmer Gorur Gopinath, plans to increase its fleet to 60 aircraft within five years. To help finance the expansion the company may sell a 25% stake to an investor for about $50m. When it was set up the firm offered tickets that were 50% cheaper than other Indian airlines. It said it was basing its business model on European firms such as Ireland's Ryanair.
Venezuela and China sign oil deal

Venezuelan president Hugo Chavez has offered China wide-ranging access to the country's oil reserves.

The offer, made as part of a trade deal between the two countries, will allow China to operate oil fields in Venezuela and invest in new refineries. Venezuela has also offered to supply 120,000 barrels of fuel oil a month to China. Venezuela - the world's fifth largest oil exporter - sells about 60% of its output to the United States. Mr Chavez's administration, which has a strained relationship with the US, is trying to diversify sales to reduce its dependence on its largest export market.

China's quick-growing economy's need for oil has contributed to record-high oil prices this year, along with political unrest in the Middle East and supply bottlenecks. Oil prices are finishing the year roughly 30% higher than they were in January 2004.

In 2004, according to forecasts from the Ministry of Commerce, China's oil imports will be 110m tons, up 21% on the previous year. China has been a net importer of oil since the mid 1990's with more than a third of the oil and gas it consumes coming from abroad. A lack of sufficient domestic production and the need to lessen its dependence on imports from the Middle East has meant that China is looking to invest in other potential markets such as Latin America. Mr Chavez, who is visiting China, said his country would put its many of its oil facilities at the disposal of China. Chinese firms would be allowed to operate 15 mature oil fields in the east of Venezuela, which could produce more than one billion barrels, he confirmed. The two countries will also continue a joint venture agreement to produce stocks of the boiler fuel orimulsion. Mr Chavez has also invited Chinese firms to bid for gas exploration contracts which his government will offer next year in the western Gulf of Venezuela. The two countries also signed a number of other agreements covering other industries including mining.
Jarvis sells Tube stake to Spain

Shares in engineering group Jarvis have soared more than 16% on news that it is offloading its stake in London underground consortium Tube Lines.

The sale of the 33% stake to Spain's Ferrovial for £146m ($281m) is a lifeline to Jarvis, which was weighed down by debts of more than £230m. The company recently warned it could go under if it did not secure a refinancing deal by mid-January 2005. But now its banks have agreed to extend its credit facilities until March 2006.

The company also said it had agreed terms over the completion of 14 of its biggest construction projects under the government's Private Finance Initiative (PFI).

Jarvis wants to scale back the division, which has proved too costly and has been blamed for many of its problems. Instead, it plans to focus on UK rail renewal, roads and plant hire work. Madrid-based Ferrovial already holds a 33% stake in Tube Lines, which maintains the Jubilee, Northern and Piccadilly lines. The Spanish group has been keen to snap up more UK infrastructure assets, having bought Amey in 2003. Jarvis said the sale, which raked in more than the £100m analysts had expected, would "substantially" enhance its financial position. "I am now confident that we can now move forward in 2005 towards rebuilding Jarvis and return it to growth as a profitable business," said chief executive Alan Lovell. Shares in Jarvis were up more than 16% to 18 pence by the close of trade on Friday.
Air Jamaica back in state control

The Jamaican government is regaining control of Air Jamaica in an bid to help the ailing company out of its financial difficulties.

The firm has failed to make money since the state sold a majority stake to hotel tycoon Gordon Stewart in 1994. In common with many carriers, Air Jamaica, with debts of $560m (£291m), has been hit by high fuel costs and the impact of the 11 September attacks. The company will be restructured with the aim of finding a new buyer. "The administration is committed to a viable national airline that will serve as a major catalyst for our economy," said Finance Minister Omar Davies. The 35-year-old airline transports about 55% of all passengers to the island and its pilots are reportedly among the best paid in the industry, with senior members of staff earning in excess of $234,000 a year.
India-Pakistan peace boosts trade

Calmer relations between India and Pakistan are paying economic dividends, with new figures showing bilateral trade up threefold in the summer.

The value of trade in April-July rose to $186.3m (£97m) from $64.4m in the same period in 2003, the Indian Government said. Nonethless, the figures represent less than 1% of India's overall exports. But business is expected to be boosted further from 2006 when the South Asian Free Trade Area Agreement starts. Both countries eased travel and other restrictions as part of the peace process aimed at ending nearly six decades of hostilities.

Sugar, plastics, pharmaceutical products and tea are among the major exports from India to its neighbour, while firms in Pakistani have been selling fabrics, fruit and spices. "If the positive trend continues, two-way trade could well cross half a billion dollars this fiscal year," India's federal commerce Minister Kamal Nath said. According to official data, the value of India's overall exports in the current fiscal year is expected to reach more than $60bn, while in Pakistan's case it is set to hit more than $12bn. Meanwhile, the Indian Government said the prospects for the country's booming economy remained "very bright" despite a "temporary aberration" this year. Its mid-year economic review forecasts growth of 6-6.5% in 2004, compared with 8.2% in 2003. Higher oil prices, the level of tax collections, and an unfavourable monsoon season affecting the farm sector had hurt the economy in April-September, it said.
Dollar hits new low versus euro

The US dollar has continued its record-breaking slide and has tumbled to a new low against the euro.

Investors are betting that the European Central Bank (ECB) will not do anything to weaken the euro, while the US is thought to favour a declining dollar. The US is struggling with a ballooning trade deficit and analysts said one of the easiest ways to fund it was by allowing a depreciation of the dollar. They have predicted that the dollar is likely to fall even further.

The US currency was trading at $1.364 per euro at 1800 GMT on Monday. This compares with $1.354 to the euro in late trading in New York on Friday, which was then a record low.

The dollar has weakened sharply since September when it traded about $1.20 against the euro. It has lost 7% this year, while against the Japanese yen it is down 3.2%. Traders said that thin trading levels had amplified Monday's move. "It's not going to take much to push [the dollar] one way or the other," said Grant Wilson of Mellon Bank. Liquidity - a measure of the number of parties willing to trade in the market - was about half that of a normal working day, traders said.
Mild winter drives US oil down 6%

US oil prices have fallen by 6%, driven down by forecasts of a mild winter in the densely populated northeast.

Light crude oil futures fell $2.86 to $41.32 a barrel on the New York Mercantile Exchange (Nymex), and have now lost $4 in five days. Nonetheless, US crude is still 30% more expensive than at the beginning of 2004, boosted by growing demand and bottlenecks at refineries. Traders ignored the possible effects of Asia's tidal waves on global supplies.

Instead, the focus is now on US consumption, which is heavily influenced in the short term by the weather. "With the revised milder temperatures... I'm more inclined to think we'll push lower and test the $40-40.25 range," said John Brady of ABN AMRO. "The market definitely feels to be on the defensive." Statistics released last week showed that stockpiles of oil products in the US had risen, an indication that severe supply disruptions may not arise this winter, barring any serious incident. Oil prices have broken records in 2004, topping $50 a barrel at one point, driven up by a welter of worries about unrest in Iraq and Saudi Arabia, rising demand and supply bottlenecks. London's International Petroleum Exchange remained closed for the Christmas holiday.
Share boost for feud-hit Reliance

The board of Indian conglomerate Reliance has agreed a share buy-back, to counter the effects of a power struggle in the controlling family.

The buy-back is a victory for chairman Mukesh Ambani, whose idea it was. His brother Anil, the vice-chairman, said had not been consulted and that the buy-back was "completely inappropriate and unnecessary". The board hopes the move will reverse a 13% fall in Reliance's shares since the feud became public last month. The company has been fractious since founder Dhirubhai Ambani died in 2002, leaving no will. "Today's round has gone to [Mukesh], there is no doubt about it," said Nanik Rupani, president of the Indian Merchants Chamber, a Bombay-based traders' body. The company plans to buy back 52 million shares at 570 rupees (£6.80; $13) apiece, a premium of more than 10% to its current market price.
Israeli economy picking up pace

Israel's economy is forecast to grow by 4.2% in 2004 as it continues to emerge from a three-year recession.

The main driver of the faster-than-expected expansion has been exports, with tourism seeing a strong rebound, the statistical office said. The economy is benefiting from a quieter period in Palestinian-Israeli violence and a pick-up in global demand for technology products. The outlook is better than it has been for a number of years, analysts said.

Many companies have focused on cost cutting and greater efficiency, while the government has been trying to trim public spending and push through reforms. The growth figures come about despite a strike earlier this year by about 400,000 public sector worker which closed banks, hospitals, postal services and transport facilities. Growth did slow in the second half, but only slightly. Exports for the year rose by 14%, while tourist revenues were up by 30%. Imports gained by 13%, signalling that domestic demand has picked up again. In 2003, imports declined by 1.8%. In 2003, the economy expanded by 1.3%
Soros group warns of Kazakh close

The Open Society Institute (OSI), financed by billionaire George Soros, has accused Kazakhstan officials of trying to close down its local office.

A demand for unpaid taxes and fines of $600,000 (£425,000) is politically motivated, the OSI claimed, adding that it paid the money in October. The organisation has found itself in trouble after being accused of helping to topple Georgia's former president. It denies having any role, but offices have had to close across the region.

The OSI shut its office in Moscow last year and has withdrawn from Uzbekistan and Belarus. In the Ukraine earlier this year, Mr Soros - who took on the Bank of England in the 1990s - and won, was pelted by protestors. "This legal prosecution can be considered an attempt by the government to force Soros Foundation-Kazakhstan to cease its activities in Kazakhstan and shut its doors for Kazakh citizens and organisations," the OSI said.

The OSI aims to promote democratic and open, market-based societies. Since the break up of the Soviet Union in 1991, Kazakhstan has been dominated by its president Nursultan Abish-uly Nazarbayev. He has powers for life, while insulting the president and officials has been made a criminal offence. The government controls the printing presses and most radio and TV transmission facilities. It operates the country's national radio and TV networks. Recent elections were criticised as flawed and the opposition claimed there was widespread vote rigging. Supporters, however, say he brings much needed stability to a region where Islamic militancy is on the rise. They also credit him with promoting inter-ethnic accord and pushing through harsh reforms.
Record year for Chilean copper

Chile's copper industry has registered record earnings of $14.2bn in 2004, the governmental Chilean Copper Commission (Cochilco) has reported.

Strong demand from China's fast-growing economy and high prices have fuelled production, said Cochilco vice president Patricio Cartagena. He added that the boom has allowed the government to collect $950m in taxes. Mr Cartagena said the industry expects to see investment worth $10bn over the next three years.

"With these investments, clearly we are going to continue being the principle actor in the mining of copper. It's a consolidation of the industry with new projects and expansions that will support greater production." Australia's BHP Billiton - which operates La Escondida, the world's largest open pit copper mine - is planning to invest $1.9bn between now and 2007, while state-owned Codelco will spend about $1bn on various projects. Chile, the biggest copper producer in the world, is now analyzing ways of to keep prices stable at their current high levels, without killing off demand or leading customers to look for substitutes for copper. The copper price reached a 16-year high in October 2004. Production in Chile is expected rise 3.5% in 2005 to 5.5 million tonnes, said Mr Cartagena. Cochilco expects for 2005 a slight reduction on copper prices and forecasts export earnings will fall 10.7%.
US consumer confidence up

Consumers' confidence in the state of the US economy is at its highest for five months and they are optimistic about 2005, an influential survey says.

The feel-good factor among US consumers rose in December for the first time since July according to new data. The Conference Board survey of 5,000 households pointed to renewed optimism about job creation and economic growth. US retailers have reported strong sales over the past 10 days after a slow start to the crucial festive season.

According to figures also released on Tuesday, sales in shopping malls in the week to 25 December were 4.3% higher than in 2003 following a last minute rush. Wal-Mart, the largest US retailer, has said its December sales are expected to be better than previously forecast because of strong post-Christmas sales.

It is expecting annual sales growth of between 1% and 3% for the month. Consumer confidence figures are considered a key economic indicator because consumer spending accounts for about two thirds of all economic activity in the United States. "The continuing economic expansion, combined with job growth, has consumers ending this year on a high note," said Lynn Franco, director of the Conference Board's consumer research centre. "And consumers' outlook suggests that the economy will continue to expand in the first half of next year." The overall US economy has performed strongly in recent months, prompting the Federal Reserve to increase interest rates five times since June.
Cash gives way to flexible friend

Spending on credit and debit cards has overtaken cash spending in the UK for the first time.

The moment that plastic finally toppled cash happened at 10.38am on Wednesday, according to the Association for Payment Clearing Services (Apacs) Apacs chose school teacher Helen Carroll, from Portsmouth, to make the historic transaction. The switch over took place as she paid for her groceries in the supermarket chain Tesco's Cromwell Road branch.

Mrs Carroll was born in the same year that plastic cards first appeared in the UK. "I pay for most things with my debit card, with occasional purchases on one of my credit cards," said Mrs Carroll, who teaches at Peel Common Infants School in Gosport.

Spending patterns for the year and estimates for December led Apacs to conclude that 10.38am was the time that plastic would finally rule the roost. Shoppers in the UK are expected to put £269bn on plastic cards during the whole of 2004, compared with £268bn paid with cash, Apacs said. When the first plastic cards appeared in the UK in June 1966, issued by Barclaycard, but only a handful of retailers accepted them and very few customers held them. "But in less than 40 years, plastic has become our most popular way to pay, due to the added security and flexibility it offers," said Apacs spokeswoman Jemma Smith. "The key driver has been the introduction of debit cards, which now account for two-thirds of plastic card transactions and are used by millions of us every day."
Go-ahead for Balkan oil pipeline

Albania, Bulgaria and Macedonia has given the go ahead for the construction of a $1.2bn oil pipeline that will pass through the Balkan peninsula.

The project aims to allow alternative ports for the shipping of Russian and Caspian oil, that normally goes through Turkish ports. It aims to transport 750,000 daily barrels of oil. The pipeline will be built by the US-registered Albanian Macedonian Bulgarian Oil Corporation (AMBO). The 912km pipeline will run from the Bulgarian port of Burgas, over the Black Sea to the Albanian city of Vlore on the Adriatic coast, crossing Macedonia.

The project was conceived in 1994 but it was delayed because of the lack of political support. By signing the agreement on Tuesday, the prime ministers of Bulgaria, Albania and Macedonia have overcome the problem. "This is one of the most important infrastructure projects for regional, EU, and Euro-Atlantic integration for the western Balkans," said Albanian Prime Minister Fatos Nano. According to Pat Ferguson, President of AMBO, work on the pipeline will begin in 2005 and it is expected to be ready in three or four years. He added that the company had already raised about $900m from the Overseas Private Investment Corporation (OPIC) - a US development agency - the Eximbank and Credit Suisse First Boston, among others. The project has also the support of the European Union. Analysts have said that oil companies like ChevronTexaco, Exxon Mobil and British Petroleum would be happy to find alternative routes to the Bosphorus and Dardanelles Straits.
Durex maker SSL awaits firm bid

UK condom maker SSL International has refused to comment on reports it may be subject to a takeover early in 2005.

A Financial Times report said business intelligence firm GPW was understood to be starting due diligence work on SSL International, for a corporate client. An spokesman for SSL, which makes the famous Durex brand of condom, would not to comment on "market speculation". However the news sent shares in SSL, which also makes Scholl footwear, up more than 6%, or 16.75 pence to 293.5p.

The FT said most the high-profile firm that might woo SSL was Anglo-Dutch household products group Reckitt Benckiser. Eighteen months ago Reckitt Benckiser was at the centre of a rumoured takeover bid for SSL - but that came to nothing. Other firms that have been seen as would-be suitors include Kimberly-Clark, Johnson & Johnson, and private equity investors. Analysts have seen SSL as a takeover target for years. It sold off its surgical gloves and antiseptics businesses for £173m to a management team in May. SSL was formed by a three-way merger between Seton Healthcare, footwear specialists Scholl and condom-maker London International Group. Its other brands include Syndol analgesic, Meltus cough medicine, Sauber compression hosiery and deodorant products, and Mister Baby.
Nasdaq planning $100m-share sale

The owner of the technology-dominated Nasdaq stock index plans to sell shares to the public and list itself on the market it operates.

According to a registration document filed with the Securities and Exchange Commission, Nasdaq Stock Market plans to raise $100m (£52m) from the sale. Some observers see this as another step closer to a full public listing. However Nasdaq, an icon of the 1990s technology boom, recently poured cold water on those suggestions.

The company first sold shares in private placements during 2000 and 2001. It technically went public in 2002 when the stock started trading on the OTC Bulletin Board, which lists equities that trade only occasionally. Nasdaq will not make money from the sale, only investors who bought shares in the private placings, the filing documents said. The Nasdaq is made up shares in technology firms and other companies with high growth potential. It was the most potent symbol of the 1990s internet and telecoms boom, nose-diving after the bubble burst. A recovery in the fortunes of tech giants such as Intel, and dot.com survivors such as Amazon has helped revive its fortunes.
Takeover offer for Sunderland FC

Bob Murray, chairman of Sunderland FC, has launched a £1.5m ($2.8m) bid for the club after buying broadcaster BSkyB's stake in the business.

Mr Murray is already Sunderland's leading shareholder, holding a 37.6% stake, and now hopes to take full control of the Championship side. Mr Murray said the club would find it easier to attract more investment by having a single majority owner. Sunderland delisted its shares from the stock market in August.

A lifetime Sunderland supporter and board director since 1984, Mr Murray agreed to buy BSkyB's 4.76% holding in the Wearside club on Tuesday - taking his stake to 42.3%. Under stock market rules, Mr Murray is required to make an offer for the remaining shares that he does not already own at the same price paid for the BSkyB holding of 31p a share.

Should the offer be fully accepted, Mr Murray said he expected to pay a maximum of £1.53m for the remaining shares. He also stressed that fans who wanted to keep in touch with the club's financial affairs could retain a small number of shares, enabling them to attend annual meetings. "The football sector is experiencing significant changes and uncertainty," Mr Murray said in a statement. "The recent speculation surrounding Malcolm Glazer and Manchester United has shown the unsettling effect possible where there are a number of disparate interests," he added. "I believe that this offer will strengthen the company and remove the potential for that type of uncertainty."

Sunderland were relegated from the Premiership in 2003 but are currently pushing for promotion. The club managed to reduce its losses last year from £20.6m to £1.2m after selling a host of leading players. However, the club's turnover dropped sharply from £42.5m to £28.5m over the same period, because of a fall in broadcast revenues. BSkyB bought its stake in Sunderland in 1999 as part of a five year media partnership deal. The deal expired last month.
Warning over US pensions deficit

Taxpayers may have to bail out the US agency that protects workers' pension funds, leading economists have warned.

With the Pension Benefit Guaranty Corporation (PBGC) some £23bn (£12m) in deficit, the Financial Economists Roundtable (FER) wants Congress to act. Instead of taxpayers having to pick up the bill, the FER wants Congressmen to change the PBGC's funding rules. The FER says firms should not have been allowed to reduce the insurance premiums they pay into the PBGC fund. The FER blames this on a 2004 law, in a statement signed by several members, who include Nobel economics laureate William Sharpe. It said it was "dismayed" at the situation and wants Congress to overturn the legislation.

Cash-strapped US companies, including those in the airline, car-making and steel industries, had argued in favour of the 2004 rule change, claiming that funding the insurance premiums adequately would force them to have to cut jobs. "With a little firmer hand on the pensions issues in the US, I think that Congress could avoid having to turn to the taxpayer and instead turn the obligations back onto the companies that deserve to pay them," said Professor Dennis Logue, dean of Price College of Business at the University of Oklahoma. The PBGC was founded in 1974 to protect workers' retirement rights. Its most recent action came last week when it took control of the pilots' pension scheme at United Airlines. With United battling bankruptcy, the carrier had wanted to use the money set aside for pensions to finance running costs. The company has an estimated $2.9bn hole in its pilots' pension scheme, which the PBGC will now guarantee.
Beer giant swallows Russian firm

Brewing giant Inbev has agreed to buy Alfa-Eco's stake in Sun Interbrew, Russia's second-largest brewer, for up to 259.7m euros ($353.3m; £183.75m).

Alfa-Eco, the venture capital arm of Russian conglomerate Alfa Group, has a one-fifth stake in Sun Interbrew. The deal gives Inbev, the world's biggest beermaker, near-total control over the Russian brewer. Inbev bought out another partner in August 2004. Inbev brands include Bass, Stella Artois, Hoegaarden and Staropramen. It employs 77,000 people, running operations in over 30 countries across the Americas, Europe and Asia Pacific.

The Leuven-based brewery said it would own 97.3% of the voting shares and 98.8% of the non-voting shares of Sun Interbrew. The deal is expected to be completed in the first quarter of 2005. Inbev was formed in August 2004 when Belgium's Interbrew bought Brazilian brewer Ambev. Sun Interbrew, which employs 8,000 staff, owns breweries in eight Russian cities - Klin, Ivanovo, Saransk, Kursk, Volzhsky, Omsk, Perm and Novocheboksarsk. There are also three breweries in Ukraine, in the cities of Chernigov, Nikolaev and Kharkov.
US manufacturing expands

US industrial production increased in December, according to the latest survey from the Institute for Supply Management (ISM).

Its index of national manufacturing activity rose to 58.6 last month from 57.8 in November. A reading above 50 indicates a level of growth. The result for December was slightly better than analysts' expectations and the 19th consecutive expansion. The ISM said the growth was driven by a "significant" rise in the new orders. "This completes a strong year for manufacturing based on the ISM data," said chairman of the ISM's survey committee. "While there is continuing upward pressure on prices, the rate of increase is slowing and definitely trending in the right direction."

The ISM's index of national manufacturing activity is compiled from monthly responses of purchasing executives at more than 400 industrial companies, ranging from textiles to chemicals to paper, and has now been above 50 since June 2003. Analysts expected December's figure to come in at 58.1. The ISM manufacturing index's main sister survey - the employment index - eased to 52.7 in December from 57.6 in November, while its "prices paid" index, measuring the cost to businesses of their inputs, also eased to 72.0 from 74.0. The ISM's "new orders" index rose to 67.4 from 61.5.
Singapore growth at 8.1% in 2004

Singapore's economy grew by 8.1% in 2004, its best performance since 2000, figures from the trade ministry show.

The advance, the second-fastest in Asia after China, was led by growth of 13.1% in the key manufacturing sector. However, a slower-than-expected fourth quarter points to more modest growth for the trade-driven economy in 2005 as global technology demand falls back. Slowdowns in the US and China could hit electronics exports, while the tsunami disaster may effect the service sector.

Economic growth is set to halve in Singapore this year to between 3% and 5%. In the fourth quarter, the city state's gross domestic product (GDP) rose at an annual rate of 2.4%. That was up from the third quarter, when it fell 3.0%, but was well below analyst forecasts. "I am surprised at the weak fourth quarter number. The main drag came from electronics," said Lian Chia Liang, economist at JP Morgan Chase. Singapore's economy had contracted over the summer, weighed down by soaring oil prices. The economy's poor performance in the July to September period followed four consecutive quarters of double-digit growth as Singapore bounced back strongly from the effects of the deadly Sars virus in 2003.
Madagascar completes currency switch

Madagascar has completed the replacement of its Malagasy franc with a new currency, the ariary.

From Monday, all prices and contracts will have to be quoted in the ariary, which was trading at 1,893 to the US dollar. The Malagasy franc, which lost almost half its value in 2004, is no longer legal tender but will remain exchangeable at banks until 2009. The phasing out of the franc, begun in July 2003, was intended to distance the country from its past under French colonial rule and address the problem of the large amount of counterfeit francs in circulation. "It's above all a question of sovereignty," Reuters quoted a central bank official as saying. "It is symbolic of our independence from the old colonial ways. Since we left the French monetary zone in 1973 we should have our own currency with its own name." The ariary was the name of a pre-colonial currency in the Indian Ocean island state.
Quiksilver moves for Rossignol

Shares of Skis Rossignol, the world's largest ski-maker, have jumped as much as 15% on speculation that it will be bought by US surfwear firm Quiksilver.

The owners of Rossignol, the Boix-Vives family, are said to be considering an offer from Quiksilver. Analysts believe other sporting goods companies may now take a closer look at Rossignol, prompting an auction and pushing the sale price higher. Nike and K2 have previously been mentioned as possible suitors.

Rossignol shares touched 17.70 euros, before falling back to trade 7.8% higher at 16.60 euros. European sporting goods companies have seen foreign revenues squeezed by a slump in the value of the US dollar, making a takeover more attractive, analysts said. Companies such as Quiksilver would be able to cut costs by selling Rossignol skis through their shops, they added. The Boix-Vives family is thought to have spent the past couple of years sounding out possible suitors for Rossignol, which also makes golf equipment, snowboards and sports clothing.
Dollar hovers around record lows

The US dollar hovered close to record lows against the euro on Friday as concern grows about the size of the US budget deficit.

Analysts predict that the dollar will remain weak in 2005 as investors worry about the state of the US economy. The Bush administration's apparent unwillingness to intervene to support the dollar has caused further concern. However, trading has been volatile over the past week because of technical and automated trading and light demand. This has amplified reactions to news, analysts said, adding that they expect markets to become less jumpy in January.

The dollar was trading at $1.3652 versus the euro on Friday morning after hitting a fresh record low of $1.3667 on Thursday. One dollar bought 102.55 yen.

Disappointing business figures from Chicago triggered the US currency's weakness on Thursday. The National Association of Purchasing Management-Chicago said its manufacturing index dropped to 61.2, a bigger fall than expected. "There are no dollar buyers now, especially after the Chicago data yesterday," said ABN Amro's Paul Mackel. At the same time, German Chancellor Gerhard Schroeder and Italian Prime Minister Silvio Berlusconi voiced concerns about the strength of the euro. Mr Berlusconi said the euro's strength was "absolutely worrying" for Italian exports. Mr Schroeder said in a newspaper article that stability in foreign exchange markets required a correction of global economic imbalances. Investors will now look towards February's meeting of finance ministers from the G7 industrialised nations in London for clues as to whether central banks will combine forces to stem the dollar's decline.
S Korean credit card firm rescued

South Korea's largest credit card firm has averted liquidation following a one trillion won ($960m; £499m) bail-out.

LG Card had been threatened with collapse because of its huge debts but the firm's creditors and its former parent have stepped in to rescue it. A consortium of creditors and LG Group, a family owned conglomerate, have each put up $480m to stabilise the firm. LG Card has seven million customers and its collapse would have sent shockwaves through the country's economy.

The firm's creditors - which own 99% of LG Card - have been trying to agree a deal to secure its future for several weeks. They took control of the company in January when it avoided bankruptcy only through a $4.5bn bail-out.

They had threatened to delist the company, a move which would have triggered massive debt redemptions and forced the company into bankruptcy, unless agreement was reached on its future funding. "LG Card will not need any more financial aid after this," Laah Chong-gyu, executive director of Korea Development Bank - one of the firm's creditors - said.

The agreement will see some 12 trillion won of debt converted into equity. "The purpose of the capital injection is to avoid delisting and the goal will be met," David Kim, an analyst at Sejong Securities, told Reuters. South Korea's consumer credit market has been slowly recovering from a crisis in 2002 when a credit bubble burst and millions of consumers fell behind on their debt repayments. LG Card returned to profit in September but needed further capital to avoid being thrown off the market. South Korea's stock exchange can delist any firm if its debt exceeds its assets two years running.
Dollar slides ahead of New Year

The US dollar has hit a new record low against the euro and analysts predict that more declines are likely in 2005.

Disappointing economic reports dented the currency, which had been rallying after European policy makers said they were worried about the euro's strength. Earlier on Thursday, the Japanese yen touched its lowest versus the euro on concerns about economic growth in Asia. Currency markets have been volatile over the past week because of technical and automated trading and light demand. This has amplified reactions, analysts said, adding that they expect markets to become less jumpy in January.

"People want to go into the weekend and the New Year positioned for a weaker buck," said Tim Mazanec, director of foreign exchange at Investors Bank and Trust. The dollar slid to a record $1.3666 versus the euro on Thursday, before bouncing back to $1.3636. Against the yen the dollar was trading down at $103.05.

The yen, meanwhile, dropped to 141.60 per euro in afternoon trading. It later strengthened to 140.55. Investors are concerned about the size of the US trade and budget deficits and are betting that George W Bush's administration will allow the dollar to weaken despite saying they favour a strong currency. Also playing on investors' minds are mixed reports about the state of the US economy. On Thursday, disappointing business figures from Chicago brought a sudden end to a rally in the value of the dollar. The National Association of Purchasing Management-Chicago said its index dropped to 61.2, more than analysts had expected. German Chancellor Gerhard Schroeder and Italian Prime Minister Silvio Berlusconi voiced concerns about the strength of the euro. Mr Berlusconi said the euro's strength was "absolutely worrying" for Italian exports. Mr Schroeder said in a newspaper article that stability in foreign exchange markets required a correction of global economic imbalances.
VW considers opening Indian plant

Volkswagen is considering building a car factory in India, but said it had yet to make a final decision.

The German giant said it was studying the possibility of opening an assembly plant in the country, but that it remained only a "potential" idea. Its comments came after the industry minister of India's Andhra Pradesh state said a team of VW officials were due to visit to discuss the plans. B. Satyanarayana said he expected VW to co-sign a memorandum of agreement. Several foreign carmakers, including Hyundai, Toyota, Suzuki and Ford, already have Indian production facilities to meet demand for automobiles in Asia's fourth-largest economy. VW's proposed plant would be set up in the port city of Visakhapatnam on India's eastern coast. An Andhra Pradesh official added that VW had already approved a factory site measuring 250 acres.
Ukraine strikes Turkmen gas deal

Ukraine has agreed to pay 30% more for natural gas supplied by Turkmenistan.

The deal was sealed three days after Turkmenistan cut off gas supplies in a price dispute that threatened the Ukrainian economy. Supplies from Turkmenistan account for 45% of all natural gas imported by Ukraine, which has large coal deposits but no gas fields. Turkmenistan is also trying to strike a similar deal with Russia, which is not so dependent on its gas. Turkmen President Saparmurat Niyazov, who signed the contract, said the Turkmen side agreed to lower the price demanded by $2 per 1,000 cubic metres, bringing it down to $58. But the new price is still $14 higher than the price fixed in the contract for 2004. The head of the Ukrainian state-owned Naftohaz company, Yury Boyko, said he was "fully happy" with the deal. On Friday, Turkmenistan acted on a threat and shut off gas supplies to Ukraine in attempt to bring the price dispute to a head. Mr Niyazov said that his government would insist on the same price for supplies to Russia. Analysts say thay may not happen as Russia, the world's leading gas producer, needs the cheap Turkmen gas only to relieve is state-owned Gazprom from costly investment in the exploration of oil fields in Siberia. Turkmenistan is the second-largest gas producer in the world.
Reliance unit loses Anil Ambani

Anil Ambani, the younger of the two brothers in charge of India's largest private company, has resigned from running its petrochemicals subsidiary.

The move is likely to be seen as the latest twist in a feud between Mr Ambani and his brother Mukesh. Anil, 45, has stepped down as director and vice-chairman of Indian Petrochemicals Corporation (IPC). The company was not available for comment. IPC is 46%-owned by Reliance Industries which in turn is run by Mukesh. Mukesh has spoken of ownership issues between the two brothers, who took over control of the Reliance empire following the death of their father in July, 2002.

Reliance's operations have massive reach, covering textiles, telecommunications, petrochemicals, petroleum refining and marketing, as well as oil and gas exploration, insurance and financial services. The brothers' spat has hogged headlines in India during recent weeks, despite a denial from the family that there was anything wrong. Speculation has been rife about what has triggered the stand-off, with some observers blaming Anil's political ambitions, others the heavy investment by Mukesh and Reliance in a mobile phone venture. Shares of IPC dipped on the news in Mumbai, but recovered to trade almost 6% higher. Reliance shares added 1.7%, while Reliance Energy, headed by Anil, jumped 7%.
India opens skies to competition

India will allow domestic commercial airlines to fly long haul international routes, a move it hopes will stoke competition and drive down prices.

However, only state controlled carriers will be able to fly the lucrative Gulf routes, to countries such as Kuwait and Saudi Arabia, for at least three years. Jet Airways and Air Sahara are the two companies that will benefit initially. India is looking to develop its airline industry as booming economic growth drives demand for travel.

Monica Chadha, BBC Delhi reporter, said air travel in India had increased by almost 20% from the previous year and was expected to rise even further. Infrastructure development is lagging demand, however, and will have to improve. "Most international airports in the country are shabby and ill-equipped to handle heavy air traffic," Ms Chada said, adding that while the Civil Aviation minister has promised to modernise and privatise airports little progress has been made. Steps have been take to move things forward and the government recently changed legislation that limited foreign investment in domestic airlines. It raised the maximum stake holding allowed to 49% from 40%. Local press, meanwhile, have reported that the US and India will start negotiations about adding more routes in January. Jet Airways is India's premier private domestic carrier; Air Sahara is ranked third in the category.
Oil rebounds from weather effect

Oil prices recovered in Asian trade on Tuesday, after falling in New York on milder winter weather across the US.

With winter temperatures staying relatively high in the northern US, a barrel of light crude ended Monday down $1.33 to $42.12. However crude prices have rebounded in Asia, rising to $42.30 a barrel for February delivery. In London, trading of Brent crude was suspended for a public holiday, but the price fell to $39.20 in the Far East.

With milder temperatures expected to continue in the northern parts of the US over the next few days at least, analysts have said the price of oil may fall further - even if the decline was only temporary. "Weather has been the Achilles' heel of this market," said ABN AMRO analyst John Brady. "But it is winter in the northeast. Eventually we'll get another cold blast." Despite a fall of more than $12 a barrel from the record highs reached in late October, the price of crude oil remains almost 30% higher than year-ago levels. Prices rose last week after militant attacks in Riyadh, the capital of Saudi Arabia, briefly renewed fears that the supply chain might be broken in the world's leading crude exporter. "The market was panicked but fears essentially evaporated... since there was no follow-up," said Deborah White, senior economist for energy at SG Securities in Paris.
Ban on forced retirement under 65

Employers will no longer be able to force workers to retire before 65, unless they can justify it.

The government has announced that firms will be barred from 2006 from imposing arbitrary retirement ages. Under new European age discrimination rules, a default retirement age of 65 will be introduced. Workers will be permitted to request staying on beyond this compulsory retirement age, although employers will have the right to refuse. Trade and Industry Secretary Patricia Hewitt said people would not be forced to work longer than they wanted, saying the default age was not a statutory, compulsory retirement age. She said employers would be free to continue employing people for as long as they were competent.

Under age discrimination proposals from the Department of Trade and Industry last year workers were to be allowed to work on till 70 if they wished.

Business leaders had opposed the plan as they said it would be too costly and cumbersome. The British Chambers of Commerce welcomed the latest proposal. "This move today is the best of both worlds," it said. "Employers have the ability to define the end point of the employer-employee relationship and employees have flexibility with a right to request to work past the age of 65." But Age Concern said imposing a retirement age of 65 was "cowardly" and a "complete u-turn". "This makes a mockery of the Government's so-called commitment to outlawing ageism, leaving the incoming age discrimination law to unravel," said Gordon Lishman, director general of Age Concern England . "It is now inevitable that older people will mount legal challenges to the decision using European law." The decision will have no impact on the age at which workers can collect their state pension, the government has said.
Fed warns of more US rate rises

The US looks set for a continued boost to interest rates in 2005, according to the Federal Reserve.

Minutes of the December meeting which pushed rates up to 2.25% showed that policy-makers at the Fed are worried about accelerating inflation. The clear signal pushed the dollar up to $1.3270 to the euro by 0400 GMT on Wednesday, but depressed US shares. "The markets are starting to fear a more aggressive Fed in 2005," said Richard Yamarone of Argus Research. The Dow Jones index dropped almost 100 points on Tuesday, with the Nasdaq also falling as key tech stocks were hit by broker downgrades. The dollar also gained ground against sterling on Tuesday, reaching $1.8832 to the pound before slipping slightly on Wednesday morning.

The release of the minutes just three weeks after the 14 December meeting was much faster than usual, indicating the Fed wants to keep markets more apprised of its thinking. This, too, is being taken in some quarters as a sign of aggressive moves on interest rates to come. The key Fed funds rate has risen 1.25 percentage points during 2004 from the 46-year low of 1% reached not long after the 9/11 attacks in 2001. That long trough "might be contributing to signs of potentially excessive risk-taking in financial markets", said the Federal Open Markets Committee (FOMC), which sets interest rates. The odds now favour a further boost to rates at the next meeting in early February, economists said. But the respite for the dollar, which spent late 2003 being pushed lower against other major currencies by worries about massive US trade and budget deficits, may be short-lived. "You can't rule out a further correction... but we don't think it's a change in direction in the dollar," said Jason Daw at Merrill Lynch. "Nothing fundamental has changed."
Tate & Lyle boss bags top award

Tate & Lyle's chief executive has been named European Businessman of the Year by a leading business magazine.

Iain Ferguson was awarded the title by US publication Forbes for returning one of the UK's "venerable" manufacturers to the country's top 100 companies. The sugar group had been absent from the FTSE 100 for seven years until Mr Ferguson helped it return to growth. Tate's shares have leapt 55% this year, boosted by firming sugar prices and sales of its artificial sweeteners.

"After years of a sagging stock price and a seven-year hiatus from the FTSE 100, one of Britain's venerable manufacturers has returned to the vaunted index," Forbes said. Mr Ferguson took the helm at the company in 2003, after spending most of his career at consumer goods giant Unilever. Tate & Lyle, which was an original member of the historic FT-30 index in 1935, operates more than 41 factories and 20 more additional production facilities in 28 countries. Previous winners of the Forbes award include Royal Bank of Scotland chief executive Fred Goodwin and former Vodafone boss Chris Gent.
Krispy Kreme shares hit

Shares in Krispy Kreme Doughnuts have taken a dunking on Wall Street after the firm revealed it would have to restate its 2004 financial reports.

The company warned the move would cut its profits by $3.8m to $4.9m (£2m to £2.6m) - or between 6.6% and 8.6%. Krispy Kreme said accounting errors had forced the move, adding that its board of directors made the decision to restate its accounts on 28 December. However, the company was unavailable to comment on why it had delayed the news.

It also warned it might have to further restate results for 2004 and 2005.

Shares in Krispy Kreme sank 14.87% - or $1.83 - to close at $10.48 on the news. The revelation comes just a month after the firm warned earnings would be cut by as much as 7.6% as a result of accounting errors. Krispy Kreme said the latest adjustments involved the way it accounted for the repurchase of three franchise restaurants. It added it would now be reviewing how it accounts for its leases. In a further blow, the firm said it had been advised that some of its franchise owners were not in compliance with their loan agreements, and warned it might need to borrow extra money if it was required to honour agreements on franchisee debts or operating leases.

Krispy Kreme added that it had enough cash to fund its current operations, but it could not borrow any more under its existing agreements. "There are many more questions than answers, especially given increased concerns regarding company liquidity," JP Morgan Securities analyst John Ivankoe said in a research note on the firm. The announcement is the latest blow for the one-time darling of Wall Street, which has lost 80% of its stock value in just over a year. The firm is currently facing Securities and Exchange Commission investigation of its accounts. Shareholders have also launched lawsuits against the group, claiming it made false statements and inflated sales.
Venezuela identifies 'idle' farms

Venezuelan authorities have identified more than 500 farms, including 56 large estates, as idle as it continues with its controversial land reform policy.

Under a 2001 land law, the government can tax or seize unused farm sites. A further 40,000 farms are yet to be inspected, the state's National Land Institute has told Associated Press. Vice president Jose Vicente Rangel has said farmers and ranchers with their titles in order and their lands productive have "nothing to fear." Critics of the land reform policy claim president Hugo Chavez is trying to enforce a communist-style economic programme that ignores property rights and will damage the country. Land owners claim the National Land Institute has made mistakes in classifying lands as public or private.

But the government - Venezuela's largest land owner - say they are proceeding cautiously to prevent conflicts. In a statement, Mr Rangel said the land reform is not against the constitution, which permits private property, while stressing the efforts are to "vindicate social and economically" years of inequality in the country.

One property in conflict with the government is the El Charcote cattle ranch, run by Agroflora, a subsidiary of the UK food group Vestey. Agriculture minister Arnoldo Marquez told Reuters news agency the site's documents "do not guarantee that this is a private land". Administrators of the ranch, however, have complained that pro-Chavez squatters have taken over 80% of the property in the last four years, and the UK government has asked Venezuelan authorities to resolve the conflict. "You should ask the company when they are going to put their papers in order and hand over the land that is not theirs," said Mr Marquez.
Egypt to sell off state-owned bank

The Egyptian government is reportedly planning to privatise one of the country's big public banks.

An Investment Ministry official has told the Reuters news agency that the Bank of Alexandria will be sold sometime in 2005. The move is seen as evidence of a new commitment by the government to reduce the size of public sector. The official said the government has not yet decided whether the sale will take the form of a public flotation. "The most important thing to decide now is the method - whether by selling shares to the public or to a strategic investor from abroad," he said.

Analysts say the public-sector banks have suited the government's monetary, credit and exchange policies. Nevertheless, the Egyptian government has spoken for years about privatising one of the big four state banks - Banque Misr, National Bank of Egypt, Banque du Caire and Bank of Alexandria. It had been expected one of the smallest of the four big public banks - Bank of Alexandria or Banque du Caire - would be sold first. The announcement reinforces the hopes of investors and international financial bodies for a revival of Egypt's privatisation programme. About 190 state-run companies and facilities were sold off from the early 1990s to 1997. The appointment of Mahmoud Mohieldin, a reform-minded technocrat, to the new post of investment minister in July was taken as a sign that more sell-offs were on the way. Both the IMF and World Bank have urged Egypt to remove obstacles to the development of the private sector which they say has a vital role to play in reducing poverty by expanding the economy.
Wal-Mart to pay $14m in gun suit

The world's largest retailer, Wal-Mart, has agreed to pay a total of $14.5m (£7.74m) to settle a lawsuit over gun sales violations in California.

The lawsuit alleged Wal-Mart committed thousands of gun sales violations in California between 2000 and 2003. The total payment includes $5m in fines and more than $4m to fund state compliance checks with gun laws and prevent ammunition sales to minors. Wal-Mart agreed to suspend firearms sales in its California stores in 2003,

The alleged violations included the sale of guns to 23 people who were not allowed to possess them, and delivering 36 guns to customers who acquired them for people not allowed to own firearms. Although Wal-Mart has suspended firearms sales in the state, California attorney general Bill Lockyer said he wanted to be sure the giant supermarket chain would follow state rules in future. "Wal-Mart's failure to comply with gun safety laws put the lives of all Californians at risk by placing guns in the hands of criminals and other prohibited persons," said Mr Lockyer. "Although Wal-Mart has suspended gun sales in California, this settlement will ensure that it follows state law if it renews sales and will also provide valuable public education about the importance of gun safety." The world's largest retailer has not yet decided whether to resume firearms sales in California, company spokesman Gus Whitcomb said.
Laura Ashley chief stepping down

Laura Ashley is parting company with its chief executive Ainum Mohd-Saaid.

The clothing and home furnishing retailer said Ms Mohd-Saaid had resigned for personal reasons. Her departure will come into effect on 1 February and follows the departure of co-chief executive Rebecca Navarednam on 1 January. Ms Mohd-Saaid is to be replaced by Lillian Tan, presently a non-executive director of the company and head of a Malaysian retailer.

In a statement issued on Thursday, Laura Ashley thanked Ms Mohd-Saaid for her services to the company. Its shares were down 8.51% to 10.75p in late Thursday morning trading on the London Stock Exchange.

Since 2002, Ms Tan has been managing director and chief executive of Metrojaya, one of the largest retail groups in Malaysia. Laura Ashley, which is due to issue its next trading statement in the next few weeks, has in recent months been hit by reports of poor sales. In October last year, it announced the closure of one of its two Welsh factories. In September, the company had said that its half-year clothing sales had been "below expectations". In recent times, it has put renewed focus on home furnishings rather than clothing, but last September it reported that interim six month losses had risen from £1m to £1.2m, while sales had fallen from £138m to £118m.

Laura Ashley, which floated on the London Stock Exchange for £200m ($376m) in 1995, is majority-owned by Malaysia entrepreneur Dr Khoo Kay Peng. In 1996, its share price was more than 200p. It has long been reported that Dr Khoo intends to take the company private, but he has always denied this. "Laura Ashley is a bit of a shrivelled husk of a company," said retail analyst Nick Bubb of Evolution Securities. "It is all pretty odd with its Malaysian owners seemingly just shuffling the deckchairs." Laura Ashley was founded by its late namesake in Kent in 1955, before moving to Mid Wales in 1961 where it still has its main UK factory.
US Airways staff agree to pay cut

A union representing 5,200 flight attendants at bankrupt US Airways have agreed to a new contract that cuts pay by nearly 10%.

The deal will help the carrier, trying to survive by cutting costs by nearly $1bn (£530m) a year, save about $94m. More than two thirds of its 28,000 staff have now accepted wage cuts. But talks are still continuing with a union representing mechanics, baggage handlers and cleaners, which has so far failed to negotiate a new contract. The seventh largest carrier in the US sought bankruptcy protection for a second time in two years last September. It had been one of the quickest to deal with difficulties faced by the aviation industry after the 9/11 attacks in 2001. But it emerged from Chapter 11 bankruptcy in March 2003 to face competition from low-cost carriers and higher fuel costs. US Airways management has said it may need to start liquidating assets if it does not receive concessions from all staff by the middle of this month.
Delta cuts fares in survival plan

Delta Air Lines is cutting domestic fares by as much as 50% as part of a plan to ensure its financial survival.

Other US carriers, including United, have sought bankruptcy protection, amid high fuel costs and competition from discount carriers. Delta is restructuring in a bid to fight off insolvency. This latest move to boost business has prompted speculation other firms will be forced to match their fares, hurting revenues in the sector. Delta's new SimpliFares were trialled from August last year on tickets from Cincinnati, its second-largest hub.

The airline says no one-way economy fare will now be priced higher than $499 (£264), and no first-class fare will be priced higher than $599. It is also eliminating a Saturday-night stay requirement on discount fares and will give further reductions to customers opting for non-refundable tickets, booking in advance and online. Delta, which lost $646m in the three months to September, was forced to cut 6,900 jobs worldwide as part of its aim to slash $5bn from its costs. In October, it reached a crucial agreement with pilots on pay and conditions and it has also issued new shares to staff in return for wage cuts. Airline shares closed lower on the announcement, with Delta, Continental and American Airlines all falling by more than 7%. "We believe the whole airline industry will now have to move in this direction; this will likely hurt revenue in the short run but could be beneficial in the long run," said analyst Ray Neidl at Calyon Securities.
Profits jump at China's top bank

Industrial and Commercial Bank (ICBC), China's biggest lender, has seen an 18% jump in profits during 2004.

The increase in earnings has allowed the firm to write off bad loans and pave the way for a state bailout and eventual stock-market listing. China is trying to clean up its banking system, which is weighed down by billions of dollars of unpaid loans. It has already pumped $45bn (£24bn) into two of its largest banks, and has identified ICBC as a recipient of aid. ICBC's profits were 74.7bn yuan ($9bn; £4.8bn) in 2004, the bank said in a statement. The percentage of non-performing loans dropped to 19.1%, down about 2 percentage points. ICBC was founded in 1984 and had total assets of 5.3 trillion yuan at the end of 2003. China committed to gradually opening up its banking sector when it joined the World Trade Organisation in 2002.
Tsunami to cost Sri Lanka $1.3bn

Sri Lanka faces a $1.3bn (£691m) bill in 2005 for reconstruction after the tsunami which killed more than 30,000 of its people, its central bank says.

This estimate is preliminary, bank governor Sunil Mendis told reporters, and could rise in 2006. The island state is asking for about $320m from the International Monetary Fund to help pay for relief, he said. The bank has 5bn rupees ($50m; £27m) set aside to lend at a lower interest rate to those who lost property. According to Mr Mendis, half the IMF support could come from a freeze on debt repayments, which would free up resources immediately. The rest could come from a five-year emergency loan. Sri Lanka is hoping for a wider freeze from other creditors.

The Paris Club of 19 creditors meets on 12 January to discuss a debt moratorium for the nations hit by the tsunami, which ravaged south and east Asia on 26 December.

Some 150,000 people across the region are feared to be dead and millions have been left homeless and destitute. A full reckoning of the economic cost to Sri Lanka of the tsunami will not be clear for some time to come. But already it looks likely that growth in the first half of 2005 will slow, Mr Mendis told reporters, although he would not say by how much. One side-effect of the disaster has been that the value of the rupee has risen as foreign funds have flooded into the country. The currency has strengthened 4% since late December, coming close to 100 rupees to the US dollar for the first time in more than six months.
Marsh executive in guilty plea

An executive at US insurance firm Marsh & McLennan has pleaded guilty to criminal charges in connection with an ongoing fraud and bid-rigging probe.

New York Attorney General Elliot Spitzer said senior vice president Robert Stearns had pleaded guilty to scheming to defraud. The offence carries a sentence of 16 months to four years in state prison. Mr Spitzer's office added Mr Stearns had also agreed to testify in future cases during the industry inquiry. "We are saddened by the development," Marsh said in a statement. The company added it would continue to co-operate in the case, adding it was "committed to resolving the company's legal issues and to serving our clients with the highest standards of transparency and ethics".

According to a statement from Mr Spitzer's office, the Marsh executive admitted he instructed insurance companies to submit non-competitive bids for insurance business between 2002 and 2004. Those bids were then "conveyed to Marsh clients under false and fraudulent pretences". Through the practice, Marsh was allowed to determine which insurers won business from clients, and so control the insurance market, Mr Spitzer's office added. It also protected incumbent insurers when their business was up for renewal and helped Marsh to maximise its fees, a statement said. In one case, an email showed Mr Stearns had instructed a colleague to solicit a non-competitive - or "B" - quote from AIG that was "higher in premium and more restrictive in coverage" and so fixed the bids in a way that would support the present provider Chubb. The company is also still being examined by US stock market regulator the Securities and Exchange Commission (SEC). Late last month the SEC asked for information about transactions involving holders of 5% or more of the firm's shares.
US interest rate rise expected

US interest rates are expected to rise for the fifth time since June following the US Federal Reserve's latest rate-setting meeting later on Tuesday.

Borrowing costs are tipped to rise by a quarter of a percentage point to 2.25%. The move comes as a recovery in the US economy, the world's biggest, shows signs of robustness and sustainability. The dollar's record-breaking decline, meanwhile, has spooked markets and along with high oil prices has raised concerns about the pace of inflation. "We are seeing evidence that inflation is moving higher," said Ken Kim, an analyst at Stone & McCarthy Research. "It's not a risk, it's actually happening." Mr Kim added that borrowing costs could rise further.

The Fed has said that it will move in a "measured" way to combat price growth and lift interest rates from their 40-year lows that were prompted by sluggish US and global growth.

With the economic picture now looking more rosy, the Fed has implemented quarter percentage point rises in June, August, September and November. Although the US economy grew at an annual rate of 3.9% in the three months to September, analysts warn that Fed has to be careful not to move too aggressively and take the wind out of the recovery's sails. Earlier this month figures showed that job creation is still weak, while consumer confidence is subdued. "I think the Fed feels it has a fair amount of flexibility," said David Berson, chief economist at Fannie Mae. "While inflation has moved up, it hasn't moved up a lot." "If economic growth should subside... the Fed would feel it has the flexibility to pause in its tightening. "But if economic growth picked up and caused core inflation to rise a little more quickly, I think the Fed would be prepared to tighten more quickly as well."
Continental 'may run out of cash'

Shares in Continental Airlines have tumbled after the firm warned it could run out of cash.

In a filing to US regulators the airline warned of "inadequate liquidity" if it fails to reduce wage costs by $500m by the end of February. Continental also said that, if it did not make any cuts, it expects to lose "hundreds of millions of dollars" in 2005 in current market conditions. Failure to make cutbacks may also push it to reduce its fleet, the group said. Shares in the fifth biggest US carrier had fallen 6.87% on the news to $10.44 by 1830 GMT. "Without the reduction in wage and benefit costs and a reasonable prospect of future profitability, we believe that our ability to raise additional money through financings would be uncertain," Continental said in its filing to the US Securities and Exchange Commission (SEC).

Airlines have faced tough conditions in recent years, amid terrorism fears since the 11 September World Trade Centre attack in 2001. But despite passengers returning to the skies, record-high fuel costs and fare wars prompted by competition from low cost carriers have taken their toll. Houston-based Continental now has debt and pension payments of nearly $984m which it must pay off this year. The company has been working to streamline its operations - and has managed to save $1.1bn in costs without cutting jobs. Two weeks' ago the group also announced it would be able to shave a further $48m a year from its costs with changes to wage and benefits for most of its US-based management and clerical staff.
India's Deccan gets more planes

Air Deccan has signed a deal to acquire 36 planes from Avions de Transport Regional (ATR).

The value of the deal has not been revealed, because of a confidentiality clause in the agreement. But Air Deccan's managing director Gorur Gopinath has said the price agreed was less than the catalogue price of $17.6m (£9.49m) per plane. Recently, India's first low-cost airline ordered 30 Airbus A320 planes for $1.8bn.

Under the agreement, Air Deccan will buy 15 new ATR 72-500 and lease another 15. ATR will also provide six second hand airplanes. In a statement, ATR has said deliveries of the aircraft will begin in 2005 and will continue over a five-year period.

Mr Gopinath said the planes will connect regional Indian cities. "After an evaluation of both ATR and Bombardier aircraft, we have chosen the ATR aircraft as we find it most suitable for our operations and for the Indian market for short haul routes." Filippo Bagnato, ATR's chief executive, has said that his firm will also work with Air Deccan to create a training centre in Bangalore.

The potential of the Indian budget market has attracted attention from businesses at home and abroad. Air Deccan has said it will base its business model on European firms such as Ireland's Ryanair. Beer magnate Vijay Mallya recently set up Kingfisher Airlines, while UK entrepreneur Richard Branson has said he is keen to start a local operation. India's government has given its backing to cheaper and more accessible air travel.
South African car demand surges

Car manufacturers with plants in South Africa, including BMW, General Motors, Toyota and Volkswagen, have seen a surge in demand during 2004.

New vehicle sales jumped 22% to 449,603 from a year earlier, the National Association of Automobile Manufacturers of South Africa (NAAMSA) said. Strong economic growth and low interest rates have driven demand, and analysts expect the trend to continue. NAAMSA said it expects sales to top 500,000 in 2005. During 2004 "South Africa was one of the best performing markets internationally" for car sales, NAAMSA said. While domestic demand is set to continue to enjoy rapid growth, foreign sales could come under pressure, analysts said. The vehicle industry accounts for about 13% of South Africa's total exports. However, the world auto market has its problems and analysts warn that overcapacity and the strength of the rand could hit exports.
DaimlerChrysler's 2004 sales rise

US-German carmaker DaimlerChrysler has sold 2.1% more cars in 2004 than in the previous year, as solid Chrysler sales offset a weak showing for Mercedes.

Sales totalled 3.9 million units worldwide during 2004, the company said at the Detroit Motor Show. A switch to new models hit luxury marque Mercedes-Benz, with sales down 3.1% at 1.06 million. Chrysler avoided the fate of US rivals Ford and General Motors, both of whom lost ground to Japanese firms. Its sales rose 3.5% to 2.7 million units.

Similarly on the up was the Smart brand of compact cars, with the division's sales jumping by 21.1% during 2004 to 136,000. The future of the brand - which is controlled by the Mercedes group within DaimlerChrysler - remains in question, however. Smart has consistently lost money since it started trading in 1998, and new model launches are now "on hold", said Mercedes chief executive Eckhard Cordes. In Europe, the Smart will now go on sale through regular Mercedes dealerships as well as its own dealer network, Mr Cordes said.
Tsunami cost hits Jakarta shares

The stock market in Jakarta has seen its biggest slide in a month, after the country doubled the likely cost of rebuilding from the Asian tsunami.

The fall came as Indonesia said it expected debt repayments of up to 30 trillion rupiah ($3.2bn; £1.7bn) to be frozen to help pay for the recovery. By Monday's close, the Jakarta Stock Exchange was down 2.1% at 1,011.15. Bar a slight dip at the New Year, The JSE had risen steadily by 4.7% since the tsunami hit on 26 December. Construction and property companies in particular have gained ground, although banks were among the main fallers on Monday.

So far, more than 100,000 people are believed to have been killed in Indonesia, the country closest to the earthquake which triggered the great wave.

On Friday, the government said its five-year estimate of rebuilding costs for Banda Aceh province - much of which was flattened by the quake and the tsunami - was 20 trillion rupiah ($2.2bn; £1.1bn), twice what it had previously estimated. That cost could be defrayed by temporary debt relief. On Monday, Indonesian economy minister Aburizal Bakrie told reporters that the Paris Club group of creditor countries was expected to freeze 20-30bn rupiah in payments due in 2005 and 2006. "We hope we can resume the repayments at least from 2007," Mr Bakrie said. French finance minister Herve Gaymard said on Sunday that the Paris Club had already agreed to a moratorium on repayments for tsunami-hit countries ahead of its meeting on 12 January.
Barclays shares up on merger talk

Shares in UK banking group Barclays have risen on Monday following a weekend press report that it had held merger talks with US bank Wells Fargo.

A tie-up between Barclays and California-based Wells Fargo would create the world's fourth biggest bank, valued at $180bn (£96bn). Barclays has declined to comment on the report in the Sunday Express, saying it does not respond to market speculation. The two banks reportedly held talks in October and November 2004.

Barclays shares were up 8 pence, or 1.3%, at 605 pence by late morning in London on Monday, making it the second biggest gainer in the FTSE 100 index. UK banking icon Barclays was founded more than 300 years ago; it has operations in over 60 countries and employs 76,200 staff worldwide. Its North American divisions focus on business banking, whereas Wells Fargo operates retail and business banking services from 6,000 branches. In 2003, Barclays reported a 20% rise in pre-tax profits to £3.8bn, and it has recently forecast similar gains in 2004, predicting that full year pre-tax profits would rise 18% to £4.5bn. Wells Fargo had net income of $6.2bn in its last financial year, a 9% increase on the previous year, and revenues of $28.4bn. Barclays was the focus of takeover speculation in August, when it was linked to Citigroup, though no bid has ever materialised. Stock market traders were sceptical that the latest reports heralded a deal. "The chief executive would be abandoning his duty if he didn't talk to rivals, but a deal doesn't seem likely," Reuters quoted one trader as saying.
US firm 'bids for Lacroix label'

A US firm has said it is in final negotiations with luxury goods group LVMH to buy the loss-making Christian Lacroix haute-couture house.

Paris-based LVMH has been selling non-core businesses and focusing on its most profitable labels including Moet & Chandon champagne and Louis Vuitton. Privately-held Falic Group bought two cosmetics brands, Hard Candy and Urban Decay, from LVMH in early 2003. The Florida company also own a chain of 90 duty free stores in the US. LVMH refused to comment on the reports. But one of the three brothers behind the Falic Group said the firm had also held talks with the designer Christian Lacroix, and wished to retain him. "We are buying his name," Simon Falic told the Reuters news agency. "We have plans to increase the exposure of the brand and increase the volume of business."
$1m payoff for former Shell boss

Shell is to pay $1m (£522,000) to the ex-finance chief who stepped down from her post in April 2004 after the firm over-stated its reserves.

Judy Boynton finally left the firm on 31 December, having spent the intervening time as a special advisor to chief executive Jeroen van der Veer. In January 2004, Shell told shocked investors that its reserves were 20% smaller than previously thought. Shell said the pay-off was in line with Ms Boynton's contract. She was leaving "by mutual agreement to pursue other career opportunities", the firm said in a statement. The severance package means she keeps long-term share options, but fails to collect on a 2003 incentive plan since the firm has failed to meet the targets included in it.

The revelation that Shell had inflated its reserves led to the resignation of its chairman, Sir Phil Watts, and production chief Walter van der Vijver.

An investigation commissioned by Shell found that Ms Boynton had to share responsibility for the company's behaviour. Despite receiving an email from Mr Van de Vijver which said the firm had "fooled" the market about its reserves, the investigation said, she did nothing to inquire further. In all, Shell restated its reserves four times during 2003. In September, it paid £82.7m in fines to regulators on both sides of the Atlantic for violating market rules in its reporting of its reserves.
India and Iran in gas export deal

India has signed a $40bn (£21bn) deal to import millions of tonnes of liquefied natural gas from Iran.

Firms led by the Oil & Natural Gas Corporation (ONGC) will also assist in the development of Iranian oil fields. Ministers, eager to gain access to energy supplies to meet the demands of a booming economy, secured a similar deal to one between Iran and China. The announcement comes as ONGC said it was in talks to buy former assets of troubled Russian oil firm Yukos. The agreements with Iran were sealed after talks in New Delhi between Middle East producers and Asia's biggest energy consumers - China, India, Japan and South Korea.

Iran - Opec's second-biggest oil producer and one of the world's top gas producers - has been pursuing a series of deals, rewarding LNG buyers with participation in development of its oil fields. Under the agreement, it will supply India with 7.5 million tonnes of LPG annually over a 25 year period from 2009. ONGC and the National Iranian Oil Company (NIOC) reached a preliminary deal for Indian firms to take part in the development of the Yadavaran and Jufeyr oilfields, both countries said in a statement. India's oil production has stagnated over recent years, and it is having to look abroad to secure future supplies. India imports about 70% of its total oil consumption. Consumption has jumped to 2.4 million barrels per day, compared with 474,000 bpd in 1973.
News Corp makes $5.4bn Fox offer

News Corporation is seeking to buy out minority investors in Fox Entertainment Group, its broadcasting subsidiary, for about $5.4bn (£3.7bn).

The media giant, run by Rupert Murdoch, owns 82% of the shares in the company, home to the Fox television network and the 20th Century Fox film studio. The move follows News Corp's decision to register its business in the US. 20th Century Fox's recent film releases include I Heart Huckabees and I, Robot, while Fox puts out hit TV series 24.

Under the terms of the offer, minority Fox shareholders will receive 1.90 News Corp shares in return for each Fox share they hold. Analysts said the decision to list News Corp in the US - which will result in the firm's shares trading in New York rather than Sydney- nullified the need to retain a separate stock market listing for Fox Entertainment shares. News Corp investors voted in October to approve the transfer of the company's corporate domicile from Australia to the US state of Delaware. The move is designed to help News Corp attract more investment from the largest US financial institutions, and make it easier to raise capital. Fox Entertainment Group generated revenues of $12bn last year. News Corp shares fell 25 cents to $17.65 after the share offer was announced while Fox shares were up 19 cents at $31.22.
Israel looks to US for bank chief

Israel has asked a US banker and former International Monetary Fund director to run its central bank.

Stanley Fischer, vice chairman of banking giant Citigroup, has agreed to take the Bank of Israel job subject to approval from parliament and cabinet. His nomination by Prime Minister Ariel Sharon came as a surprise, and led to gains on the Tel Aviv stock market. Mr Fischer, who speaks fluent Hebrew, will have to become an Israeli citizen to take the job. The US says he will not have to give up US citizenship to do so.

Previous incumbent David Klein, who often argued with the Finance Ministry, steps down on 16 January. Mr Fischer will face a delicate balancing act - both in political and economic terms - between Mr Sharon and finance minister Binyamin Netanyahu, who also backed his nomination. But his appointment has also raised hopes that it could bring in fresh investment - and perhaps even an improvement in the country's credit rating Mr Fischer first went to Israel for six months in 1973, and almost emigrated there before deciding finally to return to the US. While teaching at the Massachussetts Institute of Technology he spent a month seconded to the Bank of Israel in 1979, beginning a long-time involvement in studying Israel's economy. In 1983 Mr Fischer became adviser on Israel's economy to then-US secretary of state George Shultz. At the World Bank in 1985, he participated in drawing up an economic stabilisation package for Israel.
Nortel in $300m profit revision

Telecoms equipment maker Nortel Networks has sharply revised downwards its profits for the 2003 fiscal year.

In a long-awaited filing, Nortel said it had made $434m (£231m), compared to the previously reported $732m. But the figures - revised after an audit which led to the sacking of the Canadian firm's chief - showed revenue was about 4% higher than first thought. Nortel shares, which have lost nearly 50% of their value since last year, climbed 1.46% in Toronto on Tuesday. Nortel's head Frank Dunn and two other executives were fired in January last year after the company announced it had conducted the internal audit. Securities and police authorities in both the US and Canada are still conducting inquiries into the accounts.

Nortel also issued new figures for the 2001-2002 period, which they had previously indicated had understated losses. "With the completion of our restatements we have a solid foundation on which to move forward with our business," said Nortel president and chief executive Bill Owens. "The restatement has been a monumental task, both complex and demanding." The company also said 12 senior executives - none of whom were involved directly in the accounting of the revised figures - have voluntarily agreed to repay to bonuses awarded in 2003 totalling $8.6m. Nortel added: "these members of the core executive team share the board's deep disappointment over the circumstances that led to the restatement."
Chinese exports rise 25% in 2004

Exports from China leapt during 2004 over the previous year as the country continued to show breakneck growth.

The spurt put China's trade surplus - a sore point with some of its trading partners - at a six-year high. It may also increase pressure on China to relax the peg joining its currency, the yuan, with the weakening dollar. The figures released by the Ministry of Commerce come as China's tax chief confirmed that growth had topped 9% in 2004 for the second year in a row. State Administration of Taxation head Xie Xuren said a tightening of controls on tax evasion had combined with the rapid expansion to produce a 25.7% rise in tax revenues to 2.572 trillion yuan ($311bn; £165bn).

According to the Ministry of Commerce, China's exports totalled $63.8bn in December, taking the annual total up 35.4% to $593.4bn. With imports rising a similar amount, the deficit rose to $43.4bn. The increased tax take comes despite healthy tax rebates for many exporters totalling 420bn yuan in 2004, according to Mr Xie. China's exporting success has made the trade deficit of the United States soar even further and made trade with China a sensitive political issue in Washington. The peg keeping the yuan around 8.30 to the dollar is often blamed by US lawmakers for job losses at home. A US report issued on Tuesday on behalf of a Congressionally-mandated panel said almost 1.5 million posts disappeared between 1989 and 2003. The pace accelerated in the final three years of the period, said the report for the US-China Economic and Security Review Commission, moving out of labour-intensive industries and into more hi-tech sectors. The US's overall trade deficit with China was $124bn in 2003, and is expected to rise to about $150bn for 2004.
US trade gap ballooned in October

The US trade deficit widened by more than expected in October, hitting record levels after higher oil prices raised import costs, figures have shown

The trade shortfall was $55.5bn (£29bn), up 9% from September, the Commerce Department said. That pushed the 10 month deficit to $500.5bn. Imports rose by 3.4%, while exports increased by only 0.6%. A weaker dollar also increased the cost of imports, though this should help drive export demand in coming months. "Things are getting worse, but that's to be expected," said David Wyss of Standard & Poor's in New York. "The first thing is that when the dollar goes down, it increases the price of imports. "We are seeing improved export orders. Things seem to be going in the right direction."

Despite this optimism, significant concerns remain as to how the US will fund its trade and budget deficits should they continue to widen. Another problem highlighted by analysts was the growing trade gap with China, which has been accused of keeping its currency artificially weak in order to boost exports. The US imported almost $20bn worth of goods from China during October, exporting a little under $3bn. "It seems the key worry that has existed in the currency market still remains," said Anthony Crescenzi, a bond strategist at Miller Tabak in New York. The trade deficit and the shortfall with China "are big issues going forward". The Commerce Department figures caused the dollar to weaken further despite widespread expectations that the Federal Reserve will raise interest rates for a fifth time this year. Borrowing costs are tipped to rise by a quarter of a percentage point to 2.25% at a Fed meeting later on Tuesday.
Mitsubishi in Peugeot link talks

Trouble-hit Mitsubishi Motors is in talks with French carmaker PSA Peugeot Citroen about a possible alliance.

On Tuesday Mitsubishi, the only major Japanese car firm in the red, confirmed earlier reports of negotiations. But a spokesman refused to comment on speculation that Mitsubishi could end up building cars for PSA and perhaps its Japanese rival Nissan. Mitsubishi has been hit by a recall scandal and the withdrawal of support from shareholder DaimlerChrysler. The US-German firm, once a majority shareholder, decided last April to stop providing financial backing. Mitsubishi's sales have slid 41% in the past year, catalysed by the revelation that the company had systematically been hiding records of faults and then secretly repairing vehicles. Mitsubishi is due to unveil a recovery plan later in January. Analysts said that alliances with other carmakers would be a necessary part of whatever it came up with, not least because its own slow sales have left its manufacturing capacity under-used.
BA to suspend two Saudi services

British Airways is to halt its flights from London Heathrow to Jeddah and Riyadh in Saudi Arabia from 27 March.

The airline said the decision was a commercial one due to reduced passenger demand for the services. BA currently operates four flights per week from Heathrow to Jeddah, and three weekly journeys to Riyadh. It suspended flights to Saudi Arabia for three weeks in autumn 2003 after a government warning about a "threat to UK aviation interests in Saudi Arabia".

BA will now suspend the Saudi flights - which it says will remain "under constant review" - from 27 March. "The decision to suspend flights between the UK and Saudi Arabia is a difficult one to make as we have enjoyed a long history of flying between the two countries," said BA director of commercial planning, Robert Boyle. "However, the routes don't currently make a profitable contribution to our business and we are unable to sustain them while this remains the case." Passengers with flights booked after the suspension date will be contacted by BA for alternative arrangements to be made.
Cairn Energy in Indian gas find

Shares in Cairn Energy rose 3.8% to 1,088 pence on Tuesday after the UK firm announced a fresh gas discovery in northern India.

The firm, which last year made a number of other new finds in the Rajasthan area, said the latest discovery could lead to large gas volumes. However, chief executive Bill Gammell cautioned that additional evalution was first needed at the site. Cairn has also been granted approval to extend its Rajasthan exploration area. This approval has come from the Indian government.

A spokesman said the company's decision to carry out further investigations at the new find showed that it believed there was significant gas. But he added: "It's still too early to say what the extent of it is." Cairn's string of finds in Rajasthan last year saw it elevated to the FTSE 100 index of the UK's leading listed companies. The company had bought the rights to explore in the area from oil giant Shell. Mr Gammell is a former Scottish international rugby player.
ECB holds rates amid growth fears

The European Central Bank has left its key interest rate unchanged at 2% for the 19th month in succession.

Borrowing costs have remained on hold amid concerns about the strength of economic growth in the 12 nations sharing the euro, analysts said. Despite signs of pick-up, labour markets and consumer demand remain sluggish, while firms are eyeing cost cutting measures such as redundancies. High oil prices, meanwhile, have put upward pressure on the inflation rate.

Surveys of economists have shown that the majority expect borrowing costs to stay at 2% in coming months, with an increase of a quarter of a percentage point predicted some time in the second half of the year. If anything, there may be greater calls for an interest rate cut, especially with the euro continuing to strengthen against the dollar. "The euro land economy is still struggling with this recovery," said economist Dirk Schumacher. The ECB "may sound rather hawkish but once the data allows them to cut again, they will." Data coming out of Germany on Thursday underlined the problems facing European policy makers. While Germany's economy expanded by 1.7% in 2004, growth was driven by export sales and lost some of its momentum in the last three months of the year.

The strength of the euro is threatening to dampen that foreign demand in 2005, and domestic consumption currently is not strong enough to take up the slack. Inflation in the eurozone, however, is estimated at about 2.3% in December, above ECB guidelines of 2%. ECB President Jean-Claude Trichet has remained upbeat about prospects for the region, and inflation is expected to drop below 2% later in 2005. The ECB has forecast economic growth in the eurozone of 1.9% in 2005.
German economy rebounds

Germany's economy, the biggest among the 12 countries sharing the euro, grew at its fastest rate in four years during 2004, driven by strong exports.

Gross domestic product (GDP) rose by 1.7% last year, the statistical office said. The economy contracted in 2003. Foreign sales increased by 8.2% last year, compared with a 0.3% slide in private consumption. Concerns remain, however, over the strength of the euro, weak domestic demand and a sluggish labour market. The European Central Bank (ECB) left its benchmark interest rate unchanged at 2% on Thursday. It is the nineteenth month in a row that the ECB has not moved borrowing costs. Economists predict that an increase is unlikely to come until the second half of 2005, with growth set to sputter rather than ignite.

"During 2004 we profited from the fact that the world economy was strong," said Stefan Schilbe, analyst at HSBC Trinkaus & Burkhardt. "If exports weaken and domestic growth remains poor, we cannot expect much from 2005." Many German consumers have been spooked and unsettled by government attempts to reform the welfare state and corporate environment. Major companies including Volkswagen, DaimlerChrysler and Siemens have spent much of 2004 in tough talks with unions about trimming jobs and costs. They have also warned there are more cost cutting measures on the horizon.
Trade gap narrows as exports rise

The UK's trade gap narrowed in November, helped by a 7.5% rise in exports outside the European Union.

According to the Office for National Statistics, the difference between what the UK exported and imported was £3.1bn ($5.8bn), down from October's £3.6bn. Overall UK exports - including both goods and services - rose by more than 3.2% to £24.8bn, although total imports rose again to a new record of £27.9bn. The deficit for goods alone was £4.6bn, down from October's £5bn. During November the UK exported £16.9bn worth of goods, but imported £21.5bn. The cumulative deficit for the first eleven months of 2004 now stands at £36.3bn, £4.5bn higher than the same period in 2003.

November saw an improvement in export levels to both the European Union and the rest of the world, the Office for National Statistics (ONS) said. EU exports rose 2%, fuelled by an increase in sales of chemicals. Non-EU exports shot up 7.5%, with growth seen across a range of manufacturing sectors including cars, consumer durables and chemicals. The export boost offset a 1% rise in imports. Non-EU imports rose 3%, but the growth in goods entering the UK from the EU slowed to 0.5%.

The UK's deficit with the EU fell to £1.9bn from £2.1bn, while its non-EU shortfall dropped to £2.7bn from £2.9bn in October.

The country's surplus on trade-in-services remained steady at £1.5bn for the fifth month in a row. Paul Dales, UK economist for Capital Economics, said the figures represented an improvement on recent months. However, he stressed that the long-term prognosis for exports was still uncertain. "The figures are a lot better than expected but the trend still remains poor," he said. "There have been some very encouraging signs that the UK export recovery is starting to take hold. But there is a danger that this could be held back by the ongoing weakness of domestic demand on the continent."
Lesotho textile workers lose jobs

Six foreign-owned textile factories have closed in Lesotho, leaving 6,650 garment workers jobless, union officers told the AP news agency.

Factory Workers Union secretary general Billy Macaefa blamed the closures on the end of worldwide textile quotas. The quotas for developing nations, ended on 1 January, gave them a set share of the rich countries' markets. They also limited the amount countries like China could export to the big markets of the United States and EU.

"We understand that some (owners)... were complaining that the South African rand was strong against the US dollar, and they were losing when exporting textiles and clothing to the United States," Mr Macaefa said at a news briefing in the capital, Maseru. Lesotho's currency, the maloti, is fixed to the rand. "But we suspect that they left the country unceremoniously because of the end of quotas introduced by the World Trade Organization." He said the six factories were Leisure Garments, Modern Garments, Precious Six Garments, TW Garments, Lesotho Hats and Vogue Landmark. The owners - two from Taiwan, two from China, one from Mauritius and one from Malaysia - left over the December holiday period without informing or paying their employees, he said.

Union leaders and trade campaigners have been warning that developing nations such as Lesotho, Sri Lanka, and Bangaldesh could lose thousands of jobs once the quotas were lifted. In the mountainous country surrounded by South Africa, it is feared as many as 50,000 textile workers could lose their jobs, and Mr Mafeca said he expected more companies to leave. The assistance of a US law had given Lesotho's textiles duty-free access to North American markets. The African Growth and Opportunity Act (AGOA), gave sub-Saharan countries preferential access to the US market for apparel and textile products as well as a wide range of other goods. A Lesotho government news briefing is expected on Wednesday.
Kraft cuts snack ads for children

Kraft plans to cut back on advertising of products like Oreo cookies and sugary Kool-Aid drinks as part of an effort to promote healthy eating.

The largest US food maker will also add a label to its more nutritional and low-fat brands to promote the benefits. Kraft rival PepsiCo began a similar labelling initiative last year. The moves come as the firms face criticism from consumer groups concerned at rising levels of obesity in US children. Major food manufacturers have recently been reformulating the content of some calorie-heavy products.

Kraft's new advertising policy, which covers advertising on TV, radio and in print publications, is aimed at children between the ages of six and 11. It means commercials for some of its most famous snacks and cereals shown during early morning cartoon shows on TV will now be replaced by food and drink qualifying for Kraft's new "Sensible Solution" label. But the firm said it would continue to advertise all its products in media seen by parents and "all family" audiences. "We're working on ways to encourage both adults and children to eat wisely by selecting more nutritionally balanced diets," said Lance Friedmann, Kraft senior vice president.
Khodorkovsky quits Yukos shares

Jailed tycoon Mikhail Khodorkovsky has transferred his controlling stake in oil giant Yukos to a business partner.

Mr Khodorkovsky handed over his entire 59.5% stake in holding company Group Menatep - which controls Yukos - to Leonid Nevzlin. A close ally of the ex-Yukos boss, Mr Nevzlin is currently based in Israel. Mr Khodorkovsky handed over his stake after the forced sale of Yukos' core oil production unit, Yuganskneftegaz to pay a giant tax bill.

Yuganskneftegaz was sold off at auction in December last year, eventually falling into the hands of state oil firm Rosneft in a deal worth $9.4bn (£5bn). "Since the sale of Yuganskneftegaz, I have been delivered of (all) responsibility for the business that remains and the group's money as a whole," Mr Khodorkovsky said. "It is all over. As before, I see my future in public activity to build a civil society in Russia." Mr Nevzlin is Yukos' largest shareholder but is living in self-imposed exile in Israel. Yuganskneftegaz pumps around 1 million barrels of oil a day. It was sold by the Russian authorities to recover government tax claims against Yukos totalling over $27bn. Previously considered to be Russia's richest man, with an estimated fortune of $15bn, Mr Khodorkovsky is currently on trial for fraud and tax evasion following his arrest in October 2003. However, the charges are widely seen as politically motivated and part of a drive by Russian President Vladimir Putin to rein in the country's super-rich business leaders, the so-called oligarchs. It is also believed that Mr Khodorkovsky was particularly targeted because he had started to bankroll political opponents of Mr Putin.
US in EU tariff chaos trade row

The US has asked the World Trade Organisation to investigate European Union customs tariffs, which it says are inconsistent and hamper trade.

The EU's own institutions have noted the uneven way EU customs rules are applied but failed to act, the US Trade Representative's Office said. Small and mid-sized US firms were worst-hit, it added. The EU expanded from 15 to 25 member states in May. The US said it filed the complaint after talks failed to find a solution.

The move came in the same week that the US and EU stepped back from confrontation in a tense dispute over aircraft subsidies to European manufacturer Airbus and US firm Boeing. New EU trade commissioner Peter Mandelson said on Tuesday that the two sides had agreed to reopen talks in the aircraft subsidies row, which led to tit-for-tat WTO filings in last autumn.

Explaining why it has asked the WTO to set up a dispute settlement panel on customs barriers, the US Trade Representative's Office said that it wants to tackle the issue "early in the EU's process of dealing with the problems of enlargement". Ten countries, mostly in Eastern Europe, joined the EU in May. The US said its trade with the 25 EU member countries was worth $155.2bn (£82.8bn) in 2003. "Although the EU is a customs union, there is no single EU customs administration," a statement issued on behalf of Robert Zoellick, US Trade Representative, said. Lack of uniformity, coupled with lack of procedures for prompt EU-wide review can hinder US exports, especially for small to mid-sized businesses", An EU spokesman in Washington dismissed the US complaint. "We think the US case is very weak. They haven't come up with any evidence that US companies are being harmed," said Anthony Gooch. It could take several months for the WTO's dispute settlement panel to report its findings.
News Corp eyes video games market

News Corp, the media company controlled by Australian billionaire Rupert Murdoch, is eyeing a move into the video games market.

According to the Financial Times, chief operating officer Peter Chernin said that News Corp is "kicking the tires of pretty much all video games companies". Santa Monica-based Activison is said to be one firm on its takeover list. Video games are "big business", the paper quoted Mr Chernin as saying. We "would like to get into it".

The success of products such as Sony's Playstation, Microsoft's X-Box and Nintendo's Game Cube have boosted demand for video games.

The days of arcade classics such as Space Invaders, Pac-Man and Donkey Kong are long gone. Today, games often have budgets big enough for feature films and look to give gamers as real an experience as possible. And with their price tags reflecting the heavy investment by development companies, video games are proving almost as profitable as they are fun. Mr Chernin, however, told the FT that News Corp was finding it difficult to identify a suitable target. "We are struggling with the gap between companies like Electronic Arts, which comes with a high price tag, and the next tier of companies," he explained during a conference in Phoenix, Arizona. "These may be too focused on one or two product lines."
Winemaker rejects Foster's offer

Australian winemaker Southcorp has rejected a takeover offer worth 3.1bn Australian dollars ($2.3bn; £1.8bn) from brewing giant Foster's Group.

Southcorp, whose brands include Penfolds, Rosemount and Lindemans, dismissed the offer as inadequate. The two companies held four days of talks after Foster's bought an 18.8% stake in Southcorp on 13 January. A merger would create a global player with worldwide annual sales of 39m cases and revenues of A$2.6bn.

Southcorp said Foster's A$4.17-a-share takeover proposal offered a "excellent strategic fit" but undervalued the company. "Southcorp's board has informed Foster's that it is not prepared to recommend the offer as it does not adequately reflect the strategic value of the company," said Southcorp chairman Brian Finn.

Southcorp said Foster's takeover offer was "opportunistic". However, it said that the offer may represent an 'opening bid', opening up the possibility of Foster's returning with an improved offer.

Foster's said a combination of the two companies would create a global player with an "unrivalled" collection of premium wine brands. Despite being best known for brewing Foster's Lager, Foster's is already one of Australia's largest wine producers, owning the Beringer and Wolf Blass brands among others. "The combination of Foster's and Southcorp will transform the global wine industry and significantly enhance Australia's competitive position on the global stage," said Trevor O'Hoy, Foster's chief executive officer. Foster's spent A$584m on buying an 18.8% stake in Southcorp from the Oatley family, which founded the Rosemount Estates business and later merged it into Southcorp. Shares in both companies were suspended while the two held talks about a deal. Southcorp's shares rose 12% to A$4.76 on news of the offer but Foster's shares fell 3.7% to A$5.44.
US industrial output growth eases

US industrial production continued to rise in November, albeit at a slower pace than the previous month.

The US Federal Reserve said output from factories, mines and utilities rose 0.3% - in line with forecasts - from a revised 0.6% increase in October. Analysts added that if the carmaking sector - which saw production fall 0.5% - had been excluded the data would have been more impressive. The latest increase means industrial output has grown 4.2% in the past year. Many analysts were upbeat about the prospects for the US economy, with the increase in production coming on the heels of news of a recovery in retail sales. "This is very consistent with an economy growing at 3.5 to 4.0%. It is congruent with job growth and consumer optimism," Comerica chief economist David Littman said of the figures.

The US economy grew at a respectable annual rate of 3.7% in the three months between July and September, while jobs growth averaged 178,000 during the same period. While the employment figures are not spectacular, experts believe they are enough to whittle away at America's 5.4% jobless rate. A breakdown of the latest production figures shows mining output drove the increase, surging 2.1%, while factory output rose 0.3%. But utility output dropped 1.4%. Meanwhile, the amount of factory capacity in use during the month rose to 77.6% - its highest level since May 2001. "Many investors think that product market inflation won't be a problem until the utilisation rates are at 80% or higher," Cary Leahy, senior US economist at Deutsche Bank Securities, said. "So there is still a lot of inflation-fighting slack in the manufacturing sector," "Overall I'd say manufacturing at least away from autos continues to improve and I would bet that it improves at a faster rate in coming months given how lean inventories are," Citigroup senior economist Steven Wieting added.
Gazprom 'in $36m back-tax claim'

The nuclear unit of Russian energy giant Gazprom is reportedly facing a 1bn rouble ($35.7m; £19.1m) back-tax claim for the 2001-2003 period.

Vedomosti newspaper reported that Russian authorities made the demand at the end of last year. The paper added that most of the taxes claimed are linked to the company's export activity. Gazprom, the biggest gas company in the world, took over nuclear fuel giant Atomstroieksport in October 2004. The main project of Atomstroieksport is the building of a nuclear plant in Iran, which has been a source of tension between Russia and the US.

Gazprom is one of the key players in the complex Russian energy market, where the government of Vladimir Putin has made moves to regain state influence over the sector. Gazprom is set to merge with state oil firm Rosneft, the company that eventually acquired Yuganskneftegas, the main unit of embattled oil giant Yukos. Claims for back-taxes was a tool used against Yukos, and led to the enforced sale Yuganskneftegas. Some analysts fear the Kremlin will continue to use these sort of moves to boost the efforts of the state to regain control over strategically important sectors such as oil.
Beijingers fume over parking fees

Choking traffic jams in Beijing are prompting officials to look at reorganising car parking charges.

Car ownership has risen fast in recent years, and there are now two and a half million cars on the city's roads. The trouble is that the high status of car ownership is matched by expensive fees at indoor car parks, making motorists reluctant to use them. Instead roads are being clogged by drivers circling in search of a cheaper outdoor option. "The price differences between indoor and outdoor lots are unreasonable," said Wang Yan, an official from the Beijing Municipal Commission for Development and Reform quoted in the state-run China Daily newspaper. Mr Wang, who is in charge of collecting car parking fees, said his team would be looking at adjusting parking prices to close the gap. Indoor parking bays can cost up to 250% more than outdoor ones.

Sports fans who drive to matches may also find themselves the target of the commission's road rage. It wants them to use public transport, and is considering jacking up the prices of car parks near sports grounds. Mr Wang said his review team may scrap the relatively cheap hourly fee near such places and impose a higher flat rate during matches. Indoor parking may be costly, but it is not always secure. Mr Wang's team are also going to look into complaints from residents about poor service received in exchange for compulsory monthly fees of up to 400 yuan ($48; £26). The Beijing authorities decided two years ago that visiting foreign dignitaries' motorcades should not longer get motorcycle outriders as they blocked the traffic. Unclogging Beijing's increasingly impassable streets is a major concern for the Chinese authorities, who are building dozens of new roads to create a showcase modern city ahead of the 2008 Olympic Games.
GM issues 2005 profits warning

General Motors has warned that it expects earnings this year be lower than in 2004.

The world's biggest car maker is grappling with losses in its European business, and weak US sales. GM said higher healthcare costs in North America, and lower profits at its financial services subsidiary would hurt its performance in 2005. GM said it expects to meet its 2004 earnings targets "despite a tough competitive environment".

GM, whose brands include Buick, Cadillac and Chevrolet in the US and Opel, Saab and Vauxhall in Europe, is due to reveal 2004 earnings on 19 January.

It said it would deliver a shareholder payout of $6.0-$6.5 per share this year, as promised, but that next year's earnings per share would be lower, at between $4.0-$5.0. "We're following a roadmap that we believe will deliver strong results," said GM chief executive Rick Waggoner. GM said it was expecting "reduced financial losses" in Europe in 2005. It is in the midst of cutting 12,000 jobs - one fifth of the European total - in a bid to cut costs. The biggest job losses are in Germany. Its vehicle businesses have gained market share in three out of four regions in 2004, achieving record profitability in Asia Pacific and returning to profit in Latin America, the Middle East and Africa. The car maker has diversified into financial services, and is extending the reach of General Motors Acceptance Corp (GMAC), which has said it may enter the home loans market. GMAC has been a strong contributor to profits in 2004 but GM said it will do less well this year, delivering net income of $2.5bn. "Attaining earnings of $10 a share remains GM's goal," the company said, adding it believes it can achieve this in 2007.
US economy still growing says Fed

Most areas of the US saw their economy continue to expand in December and early January, the US Federal Reserve said in its latest Beige Book report.

Of the 12 US regions it identifies for the study, 11 showed stronger economic growth, with only the Cleveland area falling behind with a "mixed" rating. Consumer spending was higher in December than November, and festive sales were also up on 2003. The employment picture also improved, the Fed said.

"Labour markets firmed in a number of districts, but wage pressures generally remained modest," the Beige Book said. "Several districts reported higher prices for building materials and manufacturing inputs, but most reported steady or only slightly higher overall price levels." The report added that residential real estate activity remained strong and that commercial real estate activity strengthened in most districts. "Office leasing was especially brisk in Washington DC, and New York City, two of the nation's strongest commercial markets," the Fed said.
Wall Street cool to eBay's profit

Shares in online auction house eBay fell 9.8% in after-hours trade on Wednesday, after its quarterly profits failed to meet market expectations.

Despite seeing net profits rise by 44% to $205.4m (£110m) during October to December, from $142m a year earlier, Wall Street had expected more. EBay stock fell to $92.9 in after-hours trade, from a $103.05 end on Nasdaq. EBay's net revenue for the quarter rose to $935.8m from $648.4m, boosted by growth at its PayPal payment service.

Excluding special items, eBay's profit was 33 cents a share, but analysts had expected 34 cents.

"I think Wall Street has gotten a bit ahead of eBay this quarter and for the 2005 year." said Janco Partners analyst Martin Pyykkonen. For 2004 as a whole, eBay earned $778.2m on sales of $3.27bn. EBay president and chief executive Meg Whitman called 2004 an "outstanding success" that generated "tremendous momentum" for 2005. "I'm more confident than ever that the decisions and investments we're making today will ensure a bright future for the company and our community of users around the world," she said. EBay now forecasts 2005 revenue of $4.2bn to $4.35bn and earnings excluding items of $1.48 to $1.52 per share. Analysts had previously estimated that eBay would achieve 2005 revenues of $4.37bn and earnings of $1.62 per share, excluding items.
WorldCom trial starts in New York

The trial of Bernie Ebbers, former chief executive of bankrupt US phone company WorldCom, has started in New York with the selection of the jury.

Mr Ebbers, 63, is accused of being the mastermind behind an $11bn (£6bn) accounting fraud that eventually saw the firm collapse in July 2002. His indictment includes charges of securities fraud, conspiracy and filing false reports with regulators. If found guilty, Mr Ebbers could face a substantial jail sentence. He has firmly declared his innocence.

Under Mr Ebbers' leadership, WorldCom emerged from Mississippi obscurity to become a $160bn telecoms giant and the darling of late 1990s investors. Yet as competition intensified and the telecoms boom petered out, WorldCom found itself under growing financial stress. When WorldCom finally collapsed, shareholders lost about $180bn and 20,000 workers lost their jobs. Mr Ebbers' trial, which is expected to last two months, is the latest in a series of attempts by US prosecutors to pursue senior executives for fraud. It will coincide with the retrial of former Tyco International chief Dennis Kozlowski and his top lieutenant, accused of looting the industrial conglomerate to the tune of $600m. Trail preparations are also preparing for former executives of shamed US energy firm Enron.
High fuel costs hit US airlines

Two of the largest airlines in the US - American and Southwest - have blamed record fuel prices for their disappointing quarterly results.

American Airlines' parent AMR reported a loss of $387m (£206m) for the fourth quarter of 2004, against a $111m loss for the same period a year earlier. Meanwhile, Southwest Airlines saw its fourth-quarter 2004 profits fall 15% to $56m, against $66m a year earlier. Both said high fuel bills would continue to pressure revenues in 2005. American, the world's biggest airline by some measures, said it expected to report a loss for the first quarter of 2005. Southwest, which has the highest market value of any US carrier, said it would remain profitable despite high fuel prices.

AMR's shares were flat in Wednesday morning trading on the New York Stock Exchange, as the results were slightly better than analysts had anticipated. AMR's chief executive Gerard Arpey said the airline's difficulties reflected the situation within the industry. "AMR's results for the fourth quarter of 2004 reflect the economic woes that plagued the airline industry throughout 2004 - in particular, high fuel prices and a tough revenue environment," he said. For the full year, AMR posted a loss of $761m, lower than 2003's $1.2bn loss and an indication that the airline has successfully cut costs. AMR added that as part of its cost cutting measures, it is postponing the delivery of 54 Boeing jets. Shares in Southwest fell 65 cents to $14.35 as analysts voiced their disappointment. "The results came in below our already conservative estimate for the quarter," said Ray Neidl, an analyst at Calyon Securities. Both American and Southwest have been squeezed by cut-throat competition in the US airline industry, as a glut of available seats has led to fierce price reductions.
European losses hit GM's profits

General Motors (GM) saw its net profits fall 37% in the last quarter of 2004, as it continued to be hit by losses at its European operations.

The US giant earned $630m (£481.5m) in the October-to-December period, down from $1bn in the fourth quarter of 2003. GM's revenues rose 4.7% to $51.2bn from $48.8bn a year earlier. The fourth-quarter losses at General Motors Europe totalled $345m, up from $66m during the same period in 2003. GM's main European brands are Opel and Vauxhall.

Excluding special items, GM's global income from continuing operations totalled $569m during the quarter, down from $838m a year earlier. The results were in line with Wall Street expectations and shares in GM rose by about 1% in pre-market trade. For the whole of 2004, GM earned $3.7bn, down from $3.8bn in 2003, while its annual revenue rose 4.5% to $193bn. GM said its profits were also hit by higher healthcare costs in the US. "GM reported solid overall results in 2004, despite challenging competitive conditions in many markets around the globe," GM chairman and chief executive Rick Wagoner said in a statement. The company recently announced that it expected profits in 2005 to be lower than in 2004.
EU to probe Alitalia 'state aid'

The European Commission has officially launched an in-depth investigation into whether Italian airline Alitalia is receiving illegal state aid.

Commission officials are to look at Rome's provision of a 400m euro ($495m; £275m) loan to the carrier. Both the Italian government and Alitalia have repeatedly denied that the money - part of a vital restructuring plan - is state aid. The investigation could take up to 18 months. However, Transport Commissioner Jacques Barrot said he wanted it to be carried out as swiftly as possible. "The Italian authorities have presented a serious industrial plan," said Mr Barot. "We now have to verify certain aspects to confirm that this plan contains no state aid. I would like our analysis to be completed swiftly."

The matter of possible state aid was brought to the Commission's attention by eight of Alitalia's rivals, including Germany's Lufthansa, British Airways and Spain's Iberia. While Alitalia needs to restructure to bring itself back to profitability, the rival carriers say it has both violated state aid rules and threatened competition. Alitalia lost 330m euros in 2003 as it struggled to get to grips with high costs, spiralling oil prices, competition from budget carriers and reduced demand. It plans to split into AZ Fly and AZ Services, which will handle air and ground services respectively. Alitalia already enjoyed state aid in 1997. EU rules prevent that from happening again in what is known as the "one time, last time" rule for airlines. Otherwise, EU regulations on state aid stipulate that governments may help companies financially, but only on the same terms as a commercial investor. The airline declined to comment on the Commission decision.
Saudi investor picks up the Savoy

London's famous Savoy hotel has been sold to a group combining Saudi billionaire investor Prince Alwaleed bin Talal and a unit of HBOS bank.

Financial details of the deal, which includes the nearby Simpson's in the Strand restaurant, were not disclosed. The seller - Irish-based property firm Quinlan Private - bought the Savoy along with the Berkeley, Claridge's and the Connaught for £750m last year. Prince Alwaleed's hotel investments include the luxury George V in Paris. He also has substantial stakes in Fairmont Hotels & Resorts, which will manage the Savoy and Simpson's in the Strand, and Four Seasons. Fairmont said it planned to invest $48m (£26m) in renovating parts of the Savoy including the River Room and suites with views over the River Thames. Work was expected to be completed by summer 2006, Fairmont said.
Two Nigerian banks set to merge

Nigerian banks United Bank of Africa and Standard Trust Bank have agreed plans to merge and create the biggest bank in West Africa.

The deal is also in line with a 2004 directive from the Nigerian central bank that called for more consolidation in the nation's crowded banking sector. The merger was announced in a statement on Standard Trust's website on Tuesday, but no financial details were revealed. United Bank is the third biggest in Nigeria in terms of number of branches. Standard Trust is smaller but more profitable. "The boards of United Bank and Standard Trust, at separate meetings yesterday, approved arrangements to merge both institutions," Standard Trust said. Standard Trust is 100% Nigerian-owned, but United Bank has some foreign investors, including New York-based Global Depository Receipts (32.8%), and Banca Nazionale del Lavoro and Monte del Paschi di Siena, both from Italy, who each have a 2.4% stake.
Virgin Blue shares plummet 20%

Shares in Australian budget airline Virgin Blue plunged 20% after it warned of a steep fall in full year profits.

Virgin Blue said profits after tax for the year to March would be between 10% to 15% lower than the previous year. "Sluggish demand reported previously for November and now December 2004 continues," said Virgin Blue chief executive Brett Godfrey. Virgin Blue, which is 25% owned by Richard Branson, has been struggling to fend off pressure from rival Jetstar. It cut its full year passenger number forecast by "approximately 2.5%". Virgin Blue reported a 22% fall in first quarter profits in August 2004 due to tough competition. In November, first half profits were down due to slack demand and rising fuel costs. Virgin Blue was launched four years ago and now has roughly one third of Australia's domestic airline market. But the national carrier, Qantas, has fought back with its own budget airline, Jetstar, which took to the skies in May 2004. Sydney-listed Virgin Blue's shares recovered slightly to close 12% down on Wednesday. Shares in its major shareholder, Patrick Corporation - which owns 46% of Virgin Blue - had dropped 31% by the close.
Watchdog probes Vivendi bond sale

French stock market regulator AMF has filed complaints against media giant Vivendi Universal, its boss and another top executive.

It believes the prospectus for a bond issue was unclear and that executives may have had privileged information. AMF has begun proceedings against Vivendi, its chief executive Jean-Rene Fourtou and chief operating officer Jean-Bernard Levy. Vivendi advisor Deutsche Bank was also the subject of a complaint filing. Deutsche Bank, which was responsible for selling the convertible bonds to investors, could face penalties if the complaint is upheld.

Vivendi has said it believes there is "no legal basis" for the complaints. The watchdog is said to believe the executive pair were party to "privileged information" surrounding the issue of the bonds. Both men bought some of the bonds, the Associated Press news agency reported. AMF is investigating claims that the duo were aware of an interest in Vivendi's US assets from investor Marvin Davis, at the time of the bond sale. Vivendi, however, has said that the information was public knowledge as Mr Davis' offer for the US assets had already been rejected by Vivendi's board. AMF is also looking into whether the executives knew that Vivendi was considering exercising its right to buy British Telecom's shares in Cegetel. Vivendi has rejected the charge, saying the decision to buy the Cegetel shares was "no more than a possibility, of which the public was perfectly aware" at the time of the bond issue. Back in December, Vivendi and its former chief executive Jean-Marie Messier were each fined 1m euros ($1.3m; £690,000) by AMF. The fines came after a 15-month probe into allegations that the media giant misled investors after a costly acquisition programme went wrong.
Saudi NCCI's shares soar

Shares in Saudi Arabia's National Company for Cooperative Insurance (NCCI) soared on their first day of trading in Riyadh.

They were trading 84% above the offer price on Monday, changing hands at 372 riyals ($99; £53) after topping 400 early in the day. Demand for the insurer's debut shares was strong - 12 times what was on sale. The listing was part of the country's plans to open up its insurance market and boost demand in the sector. Deregulation is expected to boost demand for accident and damage cover.

Previously, only NCCI has been legally allowed to offer insurance products within Saudi Arabia. However, the authorities have turned a blind eye to the many other firms selling insurance. Saudi Arabia now wants a fully functioning insurance industry and is introducing legislation that will clamp down on unauthorised companies. Policy-makers also want to make having insurance more of a requirement, but first have to take steps to boost public confidence in the system, analysts said. As a result, NCCI is being developed as the industry's flagship firm - publicly-listed, with audited accounts. Saudi Arabia sold 7 million NCCI shares, or about 70% of the company's total capital last month. More than 800,000 applicants got 9 shares each for 205 riyals apiece.
JP Morgan admits US slavery links

Thousands of slaves were accepted as collateral for loans by two banks that later became part of JP Morgan Chase.

The admission is part of an apology sent to JP Morgan staff after the bank researched its links to slavery in order to meet legislation in Chicago. Citizens Bank and Canal Bank are the two lenders that were identified. They are now closed, but were linked to Bank One, which JP Morgan bought last year. About 13,000 slaves were used as loan collateral between 1831 and 1865.

Because of defaults by plantation owners, Citizens and Canal ended up owning about 1,250 slaves. "We all know slavery existed in our country, but it is quite different to see how our history and the institution of slavery were intertwined," JP Morgan chief executive William Harrison and chief operating officer James Dimon said in the letter. "Slavery was tragically ingrained in American society, but that is no excuse." "We apologise to the African-American community, particularly those who are descendants of slaves, and to the rest of the American public for the role that Citizens Bank and Canal Bank played." "The slavery era was a tragic time in US history and in our company's history." JP Morgan said that it was setting up a $5m scholarship programme for students living in Louisiana, the state where the events took place. The bank said that it is a "very different company than the Citizens and Canal Banks of the 1800s".
Egypt and Israel seal trade deal

In a sign of a thaw in relations between Egypt and Israel, the two countries have signed a trade protocol with the US, allowing Egyptian goods made in partnership with Israeli firms free access to American markets.

The protocol, signed in Cairo, will establish what are called "qualified industrial zones" in Egypt. Products from these zones will enjoy duty free access to the US, provided that 35% of their components are the product of Israeli-Egyptian cooperation. The US describes this as the most important economic agreement between Egypt and Israel in two decades.

The protocol establishing the zones has been stalled for years. There has been deep sensitivity in Egypt about any form of co-operation with Israel as long as its peace process with the Palestinians remains blocked. But in recent weeks an unusual warmth has crept into relations between the two countries. Both exchanged prisoners earlier this month, with Egypt handing back an Israeli who has served eight years in prison after being convicted for spying.

Egyptian President Hosni Mubarak has described Israeli Prime Minister Ariel Sharon as the best chance for the Palestinians to achieve peace. The government in Cairo now believes Mr Sharon is moving towards the centre and away from the positions of right wing groups. It also believes the US, pressed by Europe, is now more willing to engage seriously in the search for a settlement. But there are also pressing economic reasons for Egypt's decision to enter into the trade agreement. It will give a huge boost to Egyptian textile exports, which are about to suffer a drop after new regulations come into force in the US at the beginning of the year.
Wipro beats forecasts once again

Wipro, India's third-biggest software firm, has reported a 60% rise in profit, topping market expectations.

Net income in the last quarter was 4.3bn rupees ($98m; £52m), against 2.7bn a year earlier. Profit had been forecast to be 4.1bn rupees. Wipro offers services such as call centres to foreign clients and has worked for more than half of the companies on the Fortune 500 list. Wipro said demand was strong, allowing it to increase the prices it charged.

"On the face of it, the results don't look very exciting," said Apurva Shah, an analyst at ASK-Raymond James. "But the guidance is positive and pricing going up is good news." Third-quarter sales rose 34% to 20.9bn rupees. One problem identified by Wipro was the high turnover of its staff. It said that 90% of employees at its business process outsourcing operations had had to be replaced. "We have to get that under control," said vice-chairman Vivek Paul. Wipro is majority owned by India's richest man Azim Premji.
Ailing EuroDisney vows turnaround

EuroDisney, the European home of Mickey Mouse and friends, has said it will sell 253m euros (£175m; $328m) of new shares as it looks to avoid insolvency.

The sale is the last part of a plan to restructure 2.4bn euros-worth of debts. Despite struggling since it was opened in 1992, EuroDisney has recently made progress in turning its business around and ticket sales have picked up. However, analysts still question whether it attracts enough visitors to stay open, even with the restructuring.

EuroDisney remains Europe's largest single tourist attraction, attracting some 12.4 million visitors annually. A new attraction - Walt Disney Studios - has recently opened its site near Paris. The company's currently traded stock tumbled in Paris on the latest news, shedding 15% to 22 euro cents. EuroDisney will sell the new shares priced at 9 euros cents each. The US Disney Corporation and Saudi Arabian prince Al-Walid bin Talal, the firm's two main shareholders, will buy the new stock. The restructuring deal is the second in the firm's troubled financial history; its finances were first reorganised in 1994.
UK young top Euro earnings league

British children enjoy the highest average annual income in Europe - more than double that of Spanish or Italian youngsters, a report suggests.

Children in the UK between the ages of 10 and 17 had an annual income of £775, said market analyst Datamonitor. They use "pester power" to get their parents to stump up nearly a third of this income, the report said. As for how they spend their cash, the bulk goes on personal care, soft drinks and food, Datamonitor said.

Datamonitor adds that British teenagers are keen on personal care because it helps them combine two seemingly contradictory emotional needs - the desire to fit in and the desire to express their individuality.

British teenage girls, compared to their counterparts in seven European countries, are the most keen to use make-up products. Nearly three out of four girls said they used make-up. According to the Datamonitor report the trend marked British teenagers out as "particularly important to cosmetics manufacturers as they are likely to experiment more with brands and products and form long-term beauty routines". And the good times are likely to keep rolling for British children, as the report predicts that they will still be topping the earnings table in 2008.
Swiss cement firm in buying spree

Swiss cement firm Holcim has bid $800m (£429m) to buy two Indian cement firms and a holding company in the country.

It plans to buy Associated Cement Companies (ACC), Ambuja Cement Eastern and the holding firm, Ambuja Cement India Ltd, a Holcim statement said. Shares in ACC fell 5.5% as investors, who thought the offer was underpriced, decided to sell. Meanwhile, UK-based firm Aggregate Industries said it had agreed a £1.8bn takeover by Holcim.

The deal with Aggregates will give Holcim, the world's second-biggest cement maker, an entry into the UK market and boost its presence in the US. Peter Tom, who will remain as Aggregate chief executive, said the 138p a share offer provided "significant value" for shareholders. The Markfield, Leicestershire-based company runs 142 quarries in the UK and the US. It also has 164 ready-mixed concrete plants, 90 asphalt plants and 32 pre-cast concrete factories.

If the Indian deals go ahead, it will give Holcim a major presence in the world's fastest-growing market behind China. ACC is India's second-largest cement maker with an annual capacity of 18.2 million tonnes and a market share of 13%. "Holcim is looking to buy it (ACC) very cheap," said KK Mittal, a fund manager with Escorts Mutual Fund in New Delhi. "The market is not impressed. If they want a substantial chunk, then they should be paying a premium over the market price." Shares in Holcim rose by 2.3% on Thursday following news of the takeover.
India's Reliance family feud heats up

The ongoing public spat between the two heirs of India's biggest conglomerate, Reliance Group, has spilled over to the board meeting of a leading company within the group.

Anil Ambani, vice-chairman of India Petrochemicals Limited (IPCL), stayed away from a gathering of senior managers on Thursday. The move follows a decision earlier this month by Anil - the younger brother of Reliance Group president Mukesh Ambani - to resign from his post. His resignation was not accepted by his brother, who is also the boss of IPCL. The IPCL board met in Mumbai to discuss the company's results for the October-to-December quarter.

It is understood that the board also considered Anil's resignation and asked him to reconsider his decision. However, Anil's demand that Anand Jain - another IPCL board member accused by Anil of creating a rift in the Ambani family - be thrown out, was not met. Anil has accused Anand Jain, a confidant of his brother Mukesh, of playing a negative role in the Ambani family, and being responsible for the trouble between the brothers. On Wednesday, the board of Reliance Energy, another Reliance Group company, reaffirmed its faith in Anil, who is the company's chief. Reliance Group acquired the government's 26% stake in IPCL - India's second-largest petrochemicals company - in 2002, as part of the privatisation drive. Meanwhile, the group's flagship company, Reliance Industries, has its board meeting on Friday to consider its financial results. Mukesh is the company's chairman and Anil its deputy, and it is expected that both brothers will come face to face in the meeting. The Ambani family controls 48% of the group, which is worth $17bn (£9.1bn; 745bn Indian rupees). It was founded by their father, Dhiru Bhai Ambani, who died two years ago.
US budget deficit to reach $368bn

The US budget deficit is set to hit a worse-than-expected $368bn (£197bn) this year, officials said on Tuesday.

The cost of military operations still needs to be factored in, with analysts saying the deficit could end up a further $100bn in the red. Past Congressional Budget Office (CBO) forecasts said there would be a $348bn shortfall in the 2005 fiscal year. In recent months, the dollar has weakened amid market jitters about the size of the budget and trade deficits. In November, the gap between US exports and imports widened to more than $60bn, a record figure. The CBO says it envisages a further "orderly" decline in the greenback over the next two years as the twin deficit drives dollar investors away. But the non-partisan fiscal watchdog notes the declines will help exporters and boost US economic growth.

The budget deficit hit a record $412bn in the 12 months to 30 September 2004, after reaching $377bn in the previous fiscal year. The CBO also forecast a total shortfall of $855bn for the years from 2006 to 2015, an improvement on previous projections. However, analysts say the new figures fail to take into account the potential $2-$3.8 trillion costs of the president's plan to revamp state pensions and extend tax cuts. The figure could also be worsened by any further military costs. Republicans have blamed the size of the deficit on slow economic conditions after the 11 September attacks and ongoing military operations in Iraq and Afghanistan. One of President George W Bush's election pledges was to halve the budget deficit within five years. But Democrats have accused the president of excluding Iraq-related costs from previous budgets to meet the aim of reducing the deficit, a charge which the administration denies. On Tuesday, the US administration asked Congress for additional funds for military operations.
Criminal probe on Citigroup deals

Traders at US banking giant Citigroup are facing a criminal investigation in Germany over a controversial bond deal.

The deal saw the sale of 11bn euros ($14.4bn; £7.6bn) of government bonds in a few minutes on 2 August, with 4bn euros-worth then bought back later. The move was widely criticised at the time, and now the German regulator has said it has found evidence of possible market manipulation. Citigroup said it would continue to co-operate fully with the authorities. "We are disappointed that the BaFin has referred to the prosecutor the question of whether action should be brought against individuals involved," Citigroup said. If the traders are found guilty, they could face a five-year jail term or a fine, Reuters reported BaFin as saying. However, under German criminal law, prosecutors cannot pursue Citigroup itself.

Germany's financial watchdog BaFin told BBC News it had now transferred the investigation to the public prosecutor. "I can confirm that BaFin has passed through the case to the public prosecutor," a BaFin spokeswoman said. "It is now a criminal investigation." "We found clues of possible market manipulation," the spokeswoman said, which included signs of linked bond trading ahead of the main trades on 2 August. "Germany's Securities Trading Act says that if BaFin finds such clues, it has to put the case in the hands of the prosecutor." Regulatory investigations are still going on in France, the UK and elsewhere. Some Citigroup operations elsewhere in the world came under regulatory criticism in 2004. Its private banking operation in Japan was closed down by regulators in Tokyo after an "aggressive sales culture" led the bank to flout anti-money laundering rules.
Brazil jobless rate hits new low

Brazil's unemployment rate fell to its lowest level in three years in December, according to the government.

The Brazilian Institute for Geography and Statistics (IBGE) said it fell to 9.6% in December from 10.6% in November and 10.9% in December 2003. IBGE also said that average monthly salaries grew 1.9% in December 2004 from December 2003. However, average monthly wages fell 1.8% in December to 895.4 reais ($332; £179.3) from November. Tuesday's figures represent the first time that the unemployment rate has fallen to a single digit since new measurement rules were introduced in 2001. The unemployment rate has been falling gradually since April 2004 when it reached a peak of 13.1%. The jobless rate average for the whole of 2004 was 11.5%, down from 12.3% in 2003, the IBGE said.

This improvement can be attributed to the country's strong economic growth, with the economy registering growth of 5.2% in 2004, the government said. The economy is expected to grow by about 4% this year. President Luiz Inacio Lula da Silva promised to reduce unemployment when he was elected two years ago. Nevertheless, some analysts say that unemployment could increase in the next months. "The data is favourable, but a lot of jobs are temporary for the (Christmas) holiday season, so we may see slightly higher joblessness in January and February," Julio Hegedus, chief economist with Lopes Filho & Associates consultancy in Rio de Janeir, told Reuters news agency. Despite his leftist background, President Lula has pursued a surprisingly conservative economic policy, arguing that in order to meet its social promises, the government needs to first reach a sustained economic growth. The unemployment rate is measured in the six main metropolitan areas of Brazil (Sao Paolo, Rio de Janeiro, Belo Horizonte, Recife, Salvador and Porto Alegre), where most of the population is concentrated.
Parmalat bank barred from suing

Bank of America has been banned from suing Parmalat, the food group which went bust in 2003 after an accounting scandal.

The bank - along with investors, auditors and the group's managers - wants damages for being a victim of fraud at the hands of the Italian firm. But a judge has barred Bank of America and two auditors from the case. The bank, and Italaudit - formerly the Italian arm of auditor Grant Thornton - face lawsuits and possible prosecution. A second auditor, Deloitte & Touche, has also been banned from the case. Grant Thornton - now rid of the Italian unit at the centre of the case - is still being permitted to sue, as are Consob, Italy's stock market regulator, hundreds of small investors and Parmalat's new managers. Parmalat collapsed in December 2003 after it emerged that the 4bn euros ($5.2bn; £2.8bn) it supposedly held in a Bank of American offshore account did not in fact exist.
Europe asks Asia for euro help

European leaders say Asian states must let their currencies rise against the US dollar to ease pressure on the euro.

The European single currency has shot up to successive all-time highs against the dollar over the past few months. Tacit approval from the White House for the weaker greenback, which could help counteract huge deficits, has helped trigger the move. But now Europe says the euro has had enough, and Asia must now share some of the burden.

China is seen as the main culprit, with exports soaring up 35% in 2004 partly on the back of a currency pegged to the dollar. "Asia should engage in greater currency flexibility," said French finance minister Herve Gaymard, after a meeting with his German counterpart Hans Eichel. Markets responded by pushing the euro lower, in the expectation that the rhetoric - and the pressure - is unlikely to ease ahead of a meeting of the G7 industrialised countries next week. Early on Tuesday morning, the dollar had edged higher to 1.3040 euros. The yen, meanwhile, had strengthened to 102.975 against the dollar by 0730 GMT.
FBI agent colludes with analyst

A former FBI agent and an internet stock picker have been found guilty of using confidential US government information to manipulate stock prices.

A New York court ruled that former FBI man Jeffrey Royer, 41, fed damaging information to Anthony Elgindy, 36. Mr Elgindy then drove share prices lower by spreading negative publicity via his newsletter. The Egyptian-born analyst would extort money from his targets in return for stopping the attacks, prosecutors said. "Under the guise of protecting investors from fraud, Royer and Elgindy used the FBI's crime-fighting tools and resources actually to defraud the public," said US Attorney Roslynn Mauskopf.

Mr Royer was convicted of racketeering, securities fraud, obstruction of justice and witness tampering. Mr Elgindy was convicted of racketeering, securities fraud and extortion.

The charges carry sentences of up to 20 years. When the guilty verdict was announced by the jury foreman, Mr Elgindy dropped his face into his hands and sobbed, the Associated Press news agency reported. He was led weeping from the court room by US marshals, AP said. Defense lawyers contended that Mr Royer had been feeding information to Mr Elgindy and another trader in an attempt to expose corporate fraud. Mr Elgindy's team claimed that he also was fighting against corporate wrongdoing. "Elgindy's conviction marks the end of his public charade as a crusader against fraud in the market," said Ms Mauskopf. One of the more bizarre aspects of the trial focused on the claims that Mr Elgindy may have had foreknowledge of the 11 September terrorist attacks in New York and Washington. Mr Elgindy had been trying to sell stock prior to the attack and had predicted a slump in the market. No charges were brought in relation to these allegations.
China Aviation seeks rescue deal

Scandal-hit jet fuel supplier China Aviation Oil has offered to repay its creditors $220m (£117m) of the $550m it lost on trading in oil futures.

The firm said it hoped to pay $100m now and another $120m over eight years. With assets of $200m and liabilities totalling $648m, it needs creditors' backing for the offer to avoid going into bankruptcy. The trading scandal is the biggest to hit Singapore since the $1.2bn collapse of Barings Bank in 1995. Chen Jiulin, chief executive of China Aviation Oil (CAO), was arrested by at Changi Airport by Singapore police on 8 December. He was returning from China, where he had headed when CAO announced its trading debacle in late-November. The firm had been betting heavily on a fall in the price of oil during October, but prices rose sharply instead.

Among the creditors whose backing CAO needs for its restructuring plan are banking giants such as Barclay's Capital and Sumitomo Mitsui, as well as South Korean firm SK Energy. Of the immediate payment, the firm - China's biggest jet fuel supplier - said it would be paying $30m out of its own resources. The rest would come from its parent company, China Aviation Oil Holding Company in Beijing. The holding company, owned by the Chinese government, holds most of CAO's Singapore-listed shares. It cut its holding from 75% to 60% on 20 October.
Low-cost airlines hit Eurotunnel

Channel Tunnel operator Eurotunnel has seen sales fall in the face of the upsurge in European low-cost airlines.

The firm said sales were down 4% in 2004 to 789m euros ($1.03bn; £548m). "The impact of the development of no-frills airlines is being felt ever more strongly," said chief executive Jean-Louis Raymond. Income from its vehicle-carrying shuttle services fell 7%, although 15% more passengers meant a 2% rise in railway revenue.

The cross-Channel truck market is improving, Eurotunnel said, but warned that it was not benefiting since much of the traffic was in containers destined for ports. The passenger-only trains which use the tunnel are run by a separate company, Eurostar.

Eurotunnel is still struggling with debts of more than 6bn euros. The company is currently kept afloat by the 200-plus banks to whom it owes the money. A shareholder revolt threw out the old board in 2004. But the BBC's business editor, Jeff Randall, said the banks could yet step in and take over altogether. "At the moment it can't even service the interest on its debt," he said. "This is a company in the departure lounge of life."
Algeria hit by further gas riots

Algeria suffered a weekend of violent protests against government plans to raise gas prices, local press reports.

Demonstrators in a number of regions blocked roads, attacked public buildings and overturned vehicles, newspapers including El Watan reported. The price of butane gas, a vital fuel for cooking, has risen to 200 dinars ($2.77) per canister from 170 dinars. Even before the hike, failing economic conditions had been fanning resentment in some of Algeria's poorest regions.

Demonstrators took to the streets last week when the cost change was first announced, but police seemed to have restored order. According to local press reports, trouble flared up again on Saturday and carried on into Sunday. El Watan said that a number of hot spots centred on the villages and towns close to Bouira, about 100 kilometres (60 miles) south of the capital Algiers. Among the other main areas affected were the western Tiaret region and Sidi Ammar in the east of the country, Agence France Presse (AFP) reported. Riots also flared up in the Maghnia region close to the border with Morocco in the west, AFP said. Butane gas and fuel oil are used as the main source of fuel to heat homes and cook food in Algeria's remote mountain areas.
India's Maruti sees profits jump

India's biggest carmaker Maruti has reported a sharp increase in quarterly profit after a booming economy and low interest rates boosted demand.

Net profit surged 70% to 2.39bn rupees ($54.98m; £29.32m) in the last three months of 2004 compared with 1.41bn rupees a year earlier. Total sales were 30.1bn rupees, up 27% from the same 2004 period. Maruti accounts for half of India's domestic car sales, luring consumers with cheap, fuel-efficient vehicles.

Demand in India also has been driven by the poor state of public transport and the very low level of car ownership, analysts said.

Figures show that only eight people per thousand are car owners. Maruti beat market expectations despite an increase in raw materials costs. The company, majority-owned by Japan's Suzuki, said an increase in steel and other raw material prices was partially offset by cost cutting. Sales in the fiscal third quarter, including vans and utility vehicles, rose by 17.8% to 136.069 units. Maruti is not the only company benefiting as Indian's economic growth gives consumer greater spending power. Utility vehicle and tractor maker Mahindra has reported a 52% rise in net profit during the last three months of 2004. Profit was 1.33bn rupees compared with 874.2m rupees a year earlier.
China now top trader with Japan

China overtook the US to become Japan's biggest trading partner in 2004, according to numbers released by Japan's Finance Ministry on Wednesday.

China accounted for 20.1% of Japan's trade in 2004, compared with 18.6% for the US. In 2003, the US was ahead with 20.5% and China came second with 19.2%. The change highlights China's growing importance as an economic powerhouse. In 2004, Japan's imports from and exports to China (and Hong Kong) added up to 22,201bn yen ($214.6bn;£114.5bn). This is the highest figure for Japanese trade with China since records began in 1947. It compares with 20,479.5bn yen in trade with the US.

Trade with the US during 2004 was hurt by one-off factors, including a 13-month ban on US beef imports following the discovery of a cow infected with mad cow disease (BSE) in the US. However, economists predict China will become an even more important Japanese trading partner in the coming years. On Tuesday, figures showed China's economy grew by 9.5% in 2004 and experts say the overall growth picture remains strong. Analysts see two spurs to future growth as being China's membership of the World Trade Organisation and lower trade tariffs. During 2004, Japan's trade surplus grew 17.9% to 12.011 trillion yen, with more than half the surplus, 6.962 trillion yen, accounted for by its trade with the US. In December, the surplus grew 1.8% on a year ago to 1.14 trillion yen thanks to stronger-than-expected exports.
Trial begins of Spain's top banker

The trial of Emilio Botin, the chairman of Spain's most powerful bank, Santander Central Hispano, has started in Madrid.

Mr Botin is accused of misusing the bank's funds after he approved the payment of 160m euros ($208m; £111m) in bonus and pension payouts to two former executives. However, the trial was suspended when Mr Botin's lawyer introduced a new set of documents on the day testimony was set to begin. A three-judge panel gave prosecution lawyers until Monday to study the documents, when the trial will be reconvened.

The high-profile case began after two Santander shareholders filed a criminal complaint about the payments to Jose Maria Amusategui and Angel Corcostegui, who stepped down in 2001. Both executives helped Mr Botin orchestrate Spain's biggest bank merger, between Santander and Banco Central Hispano, in 1999. As he arrived at Spain's High Court earlier on Wednesday, Mr Botin greeted the waiting media, saying: "I have full faith in justice." Santander's board of governors strongly reject the charges against their chairman, saying the payouts were legal and made with their unanimous support. But if convicted, Mr Botin could face a prison term of up to six years. Mr Corcostegui, a former CEO at Santander, also asked the court for new evidence to be admitted. In spite of the allegations against him, Mr Botin continues to lead Santander, and was instrumental in the £8.5bn takeover last November of the British bank Abbey National. Since taking over the chairmanship in 1986, he has turned Santander into one of the top ten biggest banks in the world.
HealthSouth ex-boss goes on trial

The former head of US medical services firm HealthSouth overstated earnings and assets to boost the company's share price, it was claimed in court.

Richard Scrushy, 52, is accused of "directing" a $2.7bn (£1.4bn) accounting fraud at the company he co-founded in Alabama in 1984. Prosecutors said he was motivated by wealth - spending about $200m between 1996 and 2002 while earning much less. Defence lawyers said Mr Scrushy had been deceived by other executives. Several former HealthSouth employees have already pleaded guilty to fraud and are expected to give evidence against Mr Scrushy.

"We will present evidence that Richard Scrushy knew about the conspiracy, that he participated in the conspiracy and that he profited," prosecutor Alice Martin told the court. Mr Scrushy is the first chief executive to be tried for breaching the Sarbanes Oxley Act - a law introduced in the wake of the Enron and WorldCom frauds which obliges corporate bosses to vouch for the accuracy of their companies' results. Among the charges he faces are conspiracy to commit fraud, filing false statements and money laundering. After federal agents raided HealthSouth's offices in March 2003, the company said none of its past financial statements could be relied on. The firm has since reorganised its board and management team and currently operates about 1,400 health clinics.
Lacroix label bought by US firm

Luxury goods group LVMH has sold its loss-making Christian Lacroix clothing label to a US investment group.

The Paris-based firm has been shedding non-core businesses and focusing on its most profitable brands including Moet & Chandon champagne and Louis Vuitton. LVMH said the French designer's haute couture and ready-to-wear labels had been purchased by the Falic Group for an unspecified sum. The Falic Group bought two cosmetics labels from LVMH in 2003. The sale of the Lacroix label comes as many fashion houses are struggling to make money from their expensive haute couture ranges. The Florida-based Falic group, which also runs a chain of 90 duty free stores in the US, said it planned to expand the brand by opening new stores. Mr Lacroix said he planned to stay at the label he founded in 1987 although exact details are still to be confirmed.
Gallery unveils interactive tree

A Christmas tree that can receive text messages has been unveiled at London's Tate Britain art gallery.

The spruce has an antenna which can receive Bluetooth texts sent by visitors to the Tate. The messages will be "unwrapped" by sculptor Richard Wentworth, who is responsible for decorating the tree with broken plates and light bulbs. It is the 17th year that the gallery has invited an artist to dress their Christmas tree. Artists who have decorated the Tate tree in previous years include Tracey Emin in 2002.

The plain green Norway spruce is displayed in the gallery's foyer. Its light bulb adornments are dimmed, ordinary domestic ones joined together with string. The plates decorating the branches will be auctioned off for the children's charity ArtWorks. Wentworth worked as an assistant to sculptor Henry Moore in the late 1960s. His reputation as a sculptor grew in the 1980s, while he has been one of the most influential teachers during the last two decades. Wentworth is also known for his photography of mundane, everyday subjects such as a cigarette packet jammed under the wonky leg of a table.
Jarre joins fairytale celebration

French musician Jean-Michel Jarre is to perform at a concert in Copenhagen to mark the bicentennial of the birth of writer Hans Christian Andersen.

Denmark is holding a three-day celebration of the life of the fairy-tale author, with a concert at Parken stadium on 2 April. Other stars are expected to join the line-up in the coming months, and the Danish royal family will attend. "Christian Andersen's fairy tales are timeless and universal," said Jarre. "For all of us, at any age there is always - beyond the pure enjoyment of the tale - a message to learn." There are year-long celebrations planned across the world to celebrate Andersen and his work, which includes The Emperor's New Clothes and The Little Mermaid. Denmark's Crown Prince Frederik and Crown Princess Mary visited New York on Monday to help promote the festivities. The pair were at a Manhattan library to honour US literary critic Harold Bloom "the international icon we thought we knew so well".

"Bloom recognizes the darker aspects of Andersen's authorship," Prince Frederik said. Bloom is to be formally presented with the Hans Christian Andersen Award this spring in Anderson's hometown of Odense. The royal couple also visited the Hans Christian Anderson School complex, where Queen Mary read The Ugly Duckling to the young audience. Later at a gala dinner, Danish supermodel Helena Christensen was named a Hans Christian Andersen ambassador. Other ambassadors include actors Harvey Keitel and Sir Roger Moore, athlete Cathy Freeman and Brazilian soccer legend Pele.
Musical treatment for Capra film

The classic film It's A Wonderful Life is to be turned into a musical by the producer of the controversial hit show Jerry Springer - The Opera.

Frank Capra's 1946 movie starring James Stewart, is being turned into a £7m musical by producer Jon Thoday. He is working with Steve Brown, who wrote the award-winning musical Spend Spend Spend. A spokeswoman said the plans were in the "very early stages", with no cast, opening date or theatre announced.

A series of workshops have been held in London, and on Wednesday a cast of singers unveiled the musical to a select group of potential investors. Mr Thoday said the idea of turning the film into a musical had been an ambition of his for almost 20 years. It's a Wonderful Life was based on a short story, The Greatest Gift, by Philip van Doren Stern. Mr Thoday managed to buy the rights to the story from Van Doren Stern's family in 1999, following Mr Brown's success with Spend Spend Spend. He later secured the film rights from Paramount, enabling them to use the title It's A Wonderful Life.
Richard and Judy choose top books

The 10 authors shortlisted for a Richard and Judy book award in 2005 are hoping for a boost in sales following the success of this year's winner.

The TV couple's interest in the book world coined the term "the Richard & Judy effect" and created the top two best-selling paperbacks of 2004 so far. The finalists for 2005 include Andrew Taylor's The American Boy and Robbie Williams' autobiography Feel. This year's winner, Alice Sebold's The Lovely Bones, sold over one million. Joseph O'Connor's Star of the Sea came second and saw sales increase by 350%. The best read award, on Richard Madeley and Judy Finnigan's Channel 4 show, is part of the British Book Awards. David Mitchell's Booker-shortlisted novel, Cloud Atlas, makes it into this year's top 10 along with several lesser known works.

"There's no doubt that this year's selection of book club entries is the best yet. If anything, the choice is even wider than last time," said Madeley. "It was very hard to follow last year's extremely successful list, but we think this year's books will do even better," said Richard and Judy executive producer Amanda Ross. "We were spoiled for choice and it was tough getting down to only 10 from the 301 submitted."
Poppins musical gets flying start

The stage adaptation of children's film Mary Poppins has had its opening night in London's West End.

Sir Cameron Mackintosh's lavish production, which has cost £9m to bring to the stage, was given a 10-minute standing ovation. Lead actress Laura Michelle Kelly soared over the heads of the audience holding the nanny's trademark umbrella. Technical hitches had prevented Mary Poppins' flight into the auditorium during preview performances. A number of celebrities turned out for the musical's premiere, including actress Barbara Windsor, comic Graham Norton and Sir Richard Attenborough.

The show's director Richard Eyre issued a warning earlier in the week that the show was unsuitable for children under seven, while under-threes are barred. Mary Poppins was originally created by author Pamela Travers, who is said to have cried when she saw Disney's 1964 film starring Julie Andrews. Travers had intended the story to be a lot darker than the perennial family favourite. Theatre impresario Sir Cameron Mackintosh has said he hopes the musical is a blend of the sweet-natured film and the original book.
Bennett play takes theatre prizes

The History Boys by Alan Bennett has been named best new play in the Critics' Circle Theatre Awards.

Set in a grammar school, the play also earned a best actor prize for star Richard Griffiths as teacher Hector. The Producers was named best musical, Victoria Hamilton was best actress for Suddenly Last Summer and Festen's Rufus Norris was named best director. The History Boys also won the best new comedy title at the Theatregoers' Choice Awards.

Partly based upon Alan Bennett's experience as a teacher, The History Boys has been at London's National Theatre since last May. The Critics' Circle named Rebecca Lenkiewicz its most promising playwright for The Night Season, and Eddie Redmayne most promising newcomer for The Goat or, Who is Sylvia?

Paul Rhys was its best Shakespearean performer for Measure for Measure at the National Theatre and Christopher Oram won the design award for Suddenly Last Summer. Both the Critics' Circle and Whatsonstage.com Theatregoers' Choice award winners were announced on Tuesday. Chosen by more than 11,000 theatre fans, the Theatregoers' Choice Awards named US actor Christian Slater best actor for One Flew Over the Cuckoo's Nest. Diana Rigg was best actress for Suddenly Last Summer, Dame Judi Dench was best supporting actress for the RSC's All's Well That Ends Well and The History Boys' Samuel Barnett was best supporting actor.
West End to honour finest shows

The West End is honouring its finest stars and shows at the Evening Standard Theatre Awards in London on Monday.

The Producers, starring Nathan Lane and Lee Evans, is up for best musical at the ceremony at the National Theatre. It is competing against Sweeney Todd and A Funny Thing Happened on the Way to the Forum for the award. The Goat or Who is Sylvia? by Edward Albee, The Pillowman by Martin McDonagh and Alan Bennett's The History Boys are shortlisted in the best play category.

Pam Ferris, Victoria Hamilton and Kelly Reilly are nominated for best actress. Ferris - best known for her television roles in programmes such as The Darling Buds of May - has made the shortlist for her role in Notes on Falling Leaves, at the Royal Court Theatre. Meanwhile, Richard Griffiths, who plays Hector in The History Boys at the National Theatre, will battle it out for the best actor award with Douglas Hodge (Dumb Show) and Stanley Townsend (Shining City). The best director shortlist includes Luc Bondy for Cruel and Tender, Simon McBurney for Measure for Measure, and Rufus Norris for Festen.

Festen is also shortlisted in the best designer category where Ian MacNeil, Jean Kalman and Paul Arditti will be up against Hildegard Bechtler, for Iphigenia at Aulis, and Paul Brown, for False Servant. The Milton Shulman Award for outstanding newcomer will be presented to Dominic Cooper (His Dark Materials and The History Boys), Romola Garai (Calico), Eddie Redmayne (The Goat, or Who is Sylvia?) or Ben Wishaw (Hamlet). And playwrights David Eldridge, Rebecca Lenkiewicz and Owen McCafferty will fight it out for The Charles Wintour Award and a £30,000 bursary. Three 50th Anniversary Special Awards will also be presented to an institution, a playwright and an individual.
Da Vinci Code is 'lousy history'

The plot of an international bestseller that thousands of readers are likely to receive as a Christmas present is 'laughable', a clergyman has said.

The Da Vinci Code claims Jesus was not crucified, but married Mary Magdalene and died a normal death. It claims this was later covered up by the Church. The Bishop of Durham, the Rt Rev Dr Tom Wright, described the novel as a "great thriller" but "lousy history". The book has sold more than seven million copies worldwide. Despite enjoying Dan Brown's conspiracy theory, the Bishop said there was a lack of evidence to back up its claims.

Writing his Christmas message in the Northern Echo, the Bishop said: "Conspiracy theories are always fun - fun to invent, fun to read, fun to fantasise about. "Dan Brown is the best writer I've come across in the genre, but anyone who knows anything about 1st century history will see that this underlying material is laughable." A great deal of credible evidence proves the Biblical version of Jesus' life was true, according to the Bishop. "The evidence for Jesus and the origins of Christianity is astonishingly good," he said. "We have literally a hundred times more early manuscripts for the gospels and letters in the New Testament than we have for the main classical authors like Cicero, Virgil and Tacitus.

"Historical research shows that they present a coherent and thoroughly credible picture of Jesus, with all sorts of incidental details that fit the time when he lived, and don't fit the world of later legend." Brown's book has become a publishing phenomenon, consistently topping book charts in the UK and US. The Da Vinci Code has been translated into 42 languages and has spawned its own cottage industry of publications, including guides on to how to read the book, rebuttals and counter claims. The book, which has become an international best-seller in little over two years, is set to be made into a film starring Tom Hanks.
Uganda bans Vagina Monologues

Uganda's authorities have banned the play The Vagina Monologues, due to open in the capital, Kampala this weekend.

The Ugandan Media Council said the performance would not be put on as it promoted and glorified acts such as lesbianism and homosexuality. It said the production could go ahead if the organisers "expunge all the offending parts". But the organisers of the play say it raises awareness of sexual abuse against women. "The play promotes illegal, unnatural sexual acts, homosexuality and prostitution, it should be and is hereby banned," the council's ruling said.

The show, which has been a controversial sell-out around the world, explores female sexuality and strength through individual women telling their stories through monologues. Some parliamentarians and church leaders are also siding with the Media Council, Uganda's New Vision newspaper reports. "The play is obscene and pornographic although it was under the guise of women's liberation," MP Kefa Ssempgani told parliament.

But the work's author, US playwright Eve Ensler, says it is all about women's empowerment. "There is obviously some fear of the vagina and saying the word vagina," Ms Ensler told the BBC. "It's not a slang word or dirty word it's a biological, anatomical word." She said the play is being produced and performed by Ugandan women and it is not being forced on them. The four Ugandan NGOs organising the play intended to raise money to campaign to stop violence against women and to raise funds for the war-torn north of the country. "I'm extremely outraged at the hypocrisy," the play's organiser in Uganda, Sarah Mukasa, told the BBC's Focus on Africa programme. "I'm amazed that this country Uganda gives the impression that it is progressive and supports women's rights and the notions of free speech; yet when women want to share their stories the government uses the apparatus of state to shut us up."
Artists' secret postcards on sale

Postcards by artists including Damien Hirst and Tracey Emin have sold just hours after the opening of the Royal Academy of Arts annual Secrets sale.

The identity of the artist remains unknown until each work is bought and the signature is revealed on the back. "There are still some big names left, such as Mario Testino," said RCA spokeswoman Sue Bradburn. All postcards are priced at £35. The sale opened at 8am on Friday and will close at 6pm on Saturday. Ms Bradburn said there was a big queue at the start of the sale but it had now gone down.

She said the people that had bought the famous name postcards had arrived early and had spent time studying each work. "They would have known what to look for." The exhibition has been open for viewing since 19 November. Film director Ken Loach, fashion designer Hussein Chalayan and former Blur guitarist Graham Coxon have all designed postcards for the sale. Some of the contributing artists are students or recent graduates of the Royal College of Art and other leading art colleges. Money raised from the sale will go towards the RCA's Fine Art Student Award Fund which supports students with grants and bursaries. The famous sale is now in its 11th year.
Adventure tale tops awards

Young book fans have voted Fergus Crane, a story about a boy who is taken on an adventure by a flying horse, the winner of two Smarties Book Prizes.

Paul Stewart and Chris Riddell's book came top in the category for six- to eight-year-olds and won the award chosen by after-school club members. Sally Grindley's Spilled Water, about a Chinese girl sold as a servant, was top in vote of readers aged nine to 11. Biscuit Bear by Mini Grey took the top award in the under-five category. Winners were voted for by about 6,000 children from a shortlist picked by an adult panel.

The prize, which is celebrating its 20th year, is billed as "the UK's biggest children's book award". Fergus Crane includes text by Stewart and illustrations by Riddell, who also created The Edge Chronicles together. As well as the six to eights prize, it won the 4Children Special Award voted for by after-school club members. Julia Eccleshare, chair of the adult judging panel, said children's literature had "never looked stronger" in the prize's 20 years. "This award counts because the final choice of winners is made by children, who are the toughest critics of all," she said. "This year's young judges chose the winners from an exceptionally strong and varied shortlist which showcases the very best in children's books today." Previous winners have included JK Rowling, Jacqueline Wilson and Dick King-Smith.
Mutant book wins Guardian prize

A book about the evolution of mutants and the science of abnormality has won the Guardian First Book Award 2004.

Armand Marie Leroi, a lecturer at London's Imperial College, scooped the £10,000 prize for Mutants: On the form, varieties and errors of the human body. "It is profoundly cultured and beautifully written in the very best tradition of popular science writing today," said judge Claire Armistead. The award recognises and rewards new writing across fiction and non-fiction. A panel of literary experts, including novelists Hari Kunzru and Ali Smith, director Sir Richard Eyre and comedian Alexei Sayle chose the winner from a five-strong shortlist.

The shortlist included Susanna Clarke's Jonathan Strange and Mr Norrell, a novel about the magic arts at the turn of the 19th Century and The Places In Between, Rory Stewart's account of his trek, on foot, across Afghanistan. "What we found so impressive about Armand Marie Leroi's book was the scope of its reference, its elegance and its inquisitiveness," said Ms Armistead, chair of the judges and the Guardian literary editor. "While the subject matter of Mutants unsettled some involved in the judging process, the overwhelming majority found it fascinating," she added. Her words were echoed by Iris director Sir Richard Eyre who called Marie Leroi's work "extraordinarily thought provoking". The award, for first time authors, is open to books from genres including fiction, poetry, biography, memoir, history, politics, science and current affairs. Previous winners include White Teeth by Zadie Smith, in 2000, which went on to become a bestseller.
Spark heads world Booker list

Dame Muriel Spark is among three British authors who have made the shortlist for the inaugural international Booker Prize.

Doris Lessing and Ian McEwan have also been nominated. McEwan and Margaret Atwood are the only nominees to have previously won the main Booker Prize. The new £60,000 award is open to writers of all nationalities who write in English or are widely translated. The prize commends an author for their body of work instead of one book.

Gabriel Garcia Marquez, Saul Bellow, Milan Kundera and John Updike also feature on the 18-strong list of world literary figures.

But other past winners of the regular Booker Prize, such as Salman Rushdie, JM Coetzee and Kazuo Ishiguro have failed to make the shortlist. The prize, which will be awarded in London in June, will be given once every two years. It will reward an author - who must be living - for "continued creativity, development and overall contribution to fiction on the world stage". An author can only win once. The international award was started in response to criticisms that the Booker Prize is only open to British and Commonwealth authors.



Margaret Atwood (Canada) Saul Bellow (Canada) Gabriel Garcia Marquez (Colombia) Gunter Grass (Germany) Ismail Kadare (Albania) Milan Kundera (Czech Republic) Stanislaw Lem (Poland) Doris Lessing (UK) Ian McEwan (UK) Naguib Mahfouz (Egypt) Tomas Eloy Martinez (Argentina) Kenzaburo Oe (Japan) Cynthia Ozick (US) Philip Roth (US) Muriel Spark (UK) Antonio Tabucchi (Italy) John Updike (US) Abraham B Yehoshua (Israel)
Versace art portfolio up for sale

The art collection of murdered fashion designer Gianni Versace could fetch up to £9m ($17m) when it is auctioned in New York and London later this year.

Among the pictures for sale are works by Roy Lichtenstein, Andy Warhol and Henri Matisse. The collection was housed at Versace's six-storey New York townhouse. The 51-year-old designer was shot outside his Florida home in 1997 by suspected serial killer Andrew Cunanan, who later killed himself. The auction, at Sotheby's, will feature 45 contemporary, impressionist and 19th Century paintings. One of the highlights of the sale is Roy Lichtenstein's Blue Nude which has been given an estimate of £1.8m ($3.4m).

Tobias Meyer, Sotheby's worldwide head of contemporary art, said: "This collection reflects Mr Versace's wide-ranging taste and impeccable eye, and many of the works were commissioned directly from the artists. "Outstanding later examples from champions of the Pop movement, such as Roy Lichtenstein, are juxtaposed with masterpieces from the most visible artists of the 1980's, including Jean-Michel Basquiat and the collaborative genius of Basquiat and Warhol, as well as Francesco Clemente." Much of the collection will be offered for sale at three auctions in New York in June, with smaller contemporary paintings going under the hammer in London on 22 and 23 June. A sale of Versace's furniture and artworks sold in 2001fetched £5.5m ($10.3m).
Slater to star in Broadway play

Actor Christian Slater is stepping into the role of Tom in the Broadway revival of The Glass Menagerie.

Slater, 35, is replacing actor Dallas Roberts in the Tennessee Williams drama, which opens next month. No reason was given for Roberts' departure. The role will be played by understudy Joey Collins until Slater joins the show. Slater won rave reviews for his recent performance in One Flew Over the Cuckoo's Nest in London's West End.

He has also starred in a number of films, including Heathers, Robin Hood: Prince of Thieves and more recently Churchill: The Hollywood Years. Preview performances of The Glass Menagerie will begin at New York's Ethel Barrymore Theatre on Thursday. Philip Rinaldi, a spokesman for the show, said the play's 15 March opening date remains unchanged. The revival, directed by David Leveaux, will also star Jessica Lange as the domineering mother, Amanda Wingfield.
Public show for Reynolds portrait

Sir Joshua Reynolds' Portrait of Omai will get a public airing following fears it would stay hidden because of an export wrangle.

The Tate Gallery unsuccessfully tried to buy the picture from its anonymous owner after a ban was issued preventing the painting from leaving the UK. The 18th Century painting has remained in storage but the owner has agreed to allow it to be part of an exhibition. The exhibition of Reynolds' work will be shown at Tate Britain from May. Joshua Reynolds: The Creation of Celebrity will feature prints, caricatures, and sculpture by the 18th Century artist, who painted some of the most famous personalities of his day. Portrait of Omai fetched the second highest amount for a British painting when it was sold at auction for £10.3m in 2001. It was bought by a London dealer who sold it on to a collector. The unnamed collector wanted to take it out of the country, but was barred from doing so by the government because of its historical significance.

In March 2004, the Tate managed to raise £12.5m funding to buy the portrait but the owner refused to sell and it has been held in storage since. The portrait is of a young man who was dubbed "the noble savage" when he arrived in London from Polynesia. He became a darling of London society and was invited to all the best parties by people who were fascinated by such an exotic character. Sir Joshua painted him after his arrival in 1774, and it became the artist's most famous work after it was first exhibited at the Royal Academy in 1776.
Famed music director Viotti dies

Conductor Marcello Viotti, director of Venice's famous La Fenice Theatre, has died in Germany at 50.

Viotti, director of La Fenice since 2002, conducted at renowned opera houses worldwide including Milan's La Scala and the Vienna State Opera. His time at La Fenice coincided with its reopening in 2003 after it was destroyed by fire in 1996. He fell into a coma after suffering a stroke during rehearsals for Jules Massenet's Manon last week.

He conducted some of the best orchestras in the world including the Berlin Philharmonic and the English Chamber Orchestra. Viotti was born in Switzerland and studied the piano, cello and singing at the Lausanne Conservatory. His career breakthrough came in 1982 when he won first prize at the Gino Marinuzzi conducting competition in Italy. Viotti established himself as chief conductor of the Turin Opera and went on to become chief conductor of Munich's Radio Orchestra. At La Fenice Viotti was widely acclaimed for his production of the French composer Massenet's Thais and some of his other productions included Giuseppe Verdi's La Traviata and Richard Strauss's Ariadne auf Naxos.

The last opera he directed at La Fenice was Massenet's Le Roi de Lahore. Viotti's debut at the New York's Metropolitan Opera came in 2000 with Giacomo Puccini's Madame Butterfly, followed by La Boheme, La Traviata and Fromental Halevy's La Juive. Giampaolo Vianello, superintendent of the Fenice Theatre Foundation, said: "I am filled with extreme sadness because, other than a great artist, he is missed as a friend - a main character in the latest joyous times, during the rebirth of our theatre." Viotti's last public performance was on 5 February when he conducted Vincenzo Bellini's Norma at the Vienna State Opera.
New Harry Potter tops book chart

Harry Potter and the Half-Blood Prince has topped Amazon's book chart less than 24 hours after its release date - 16 July - was announced.

Thousands of customers placed pre-orders on the amazon.co.uk website for the sixth book in the series. Rowling revealed she had completed the novel on Tuesday, ahead of the scheduled announcement on 25 December. It will be published simultaneously in the UK, the US, Canada, Australia, New Zealand and South Africa. JK Rowling's fifth book in the wizard series, Harry Potter and Order of the Phoenix was Amazon's largest pre-ordered item ever, with 420,000 copies pre-ordered prior to its release in June 2003. Customers who pre-order Harry Potter and the Half-Blood Prince avoid standing in long queues at bookshops on the day of the book's release next July. "The fact that the book has already hit number one in our Hot 100 books chart shows how incredibly excited customers are about the sixth Harry Potter," said Amazon's Robin Terrell.

Harry Potter and the Half-Blood Prince takes up the story of Harry Potter's sixth year at Hogwarts School of Witchcraft and Wizardry as Lord Voldemort grows stronger. Rowling has already revealed that the Half-Blood Prince is neither Harry nor Voldemort. And she added that the opening chapter of the book had been brewing in her mind for 13 years. Rowling said she had plenty of time while pregnant "to tinker with the manuscript to my satisfaction and I am as happy as I have ever been with the end result". She also previously revealed that a character will be killed in the sixth book, but she has given no hints as to who it might be. Following publication of the sixth book, just one novel remains to complete the series.
Lit Idol begins search for author

The second Pop Idol-style search for literary talent has begun with the help of the brother of Simon Cowell.

Writer Tony Cowell is among the judges who will hear aspiring writers read their work aloud. The winner gets a deal with literary agency Curtis Brown. "I'm not going to be the Mr Nasty of books," said Cowell, 54, in reference to his brother's caustic remarks on TV shows Pop Idol and The X-Factor. The 2004 winner, Paul Cavanagh, went on to sign a deal with Harper Collins.

This year, the competition is specifically looking for a crime writer. Writers must submit up to 10,000 words from the opening chapters of their novels and a synopsis. Professional readers will choose a shortlist of five following the competition closing date on 14 January.

The final five will then have to read their work in front of judging panel. A public vote will also take place, which will account for 25% of the final decision. The winner will be announced at the London Book Fair on 14 March next year and could be screened on TV. "It's very, very hard to find an agent and extremely difficult, without an agent, to get a publisher to look at your work," said Cowell. "People do fall by the wayside and the more avenues we can provide for aspiring authors, the better," he added. Paul Cavanagh, a former university professor and health care consultant from Ontario in Canada, was one of 1,466 aspiring novelists to enter the first contest. He lifted the inaugural Lit Idol prize after reading aloud an excerpt of his work Northwest Passage. Three film studios are said to be interested in buying film rights for the book, even though it is not finished yet.
Potter director signs Warner deal

Harry Potter director Alfonso Cuaron has signed a three-year deal with Hollywood studio Warner Brothers, according to Variety trade magazine.

The Mexican film-maker, who directed Harry Potter and the Prisoner of Azkaban, will produce mainstream movies and smaller Spanish-language films. "We had a wonderful experience with Alfonso on Harry Potter," Warner producer Jeff Robinov told Variety. Cuaron's other films include Mexican movie Y Tu Mama Tambien.

The 2001 rites-of-passage drama about two teenage boys who embark on a relationship with an older woman, brought Cuaron international attention - and box office glory.

It also won him and his brother Carlos, with whom he co-wrote the screenplay, an Oscar nomination for best original screenplay. Warner will distribute Cuaron's films in several languages outside the US. "This deal will give us the opportunity to collaborate with Alfonso on movies that make the most of his artistry and vision, and continue to offer him the mainstream worldwide audiences that our studio provides so successfully," said Mr Robinov.

His first film for Warner Brothers was 1995's family fantasy movie A Little Princess. Based on the novel by Frances Hodgson Burnett, A Little Princess tells the story of a young girl who is sent to live in a New York boarding school when her widowed father enlists for war. After the erotic nature of Y Tu Mama Tambien, Cuaron was a surprise choice to direct the third Harry Potter film but his dark interpretation was received well by the public and critics alike.
Baghdad Blogger on big screen

A film based on the internet musings of the "Baghdad Blogger" has been shown at the Rotterdam Film Festival.

The film has been directed by the man who calls himself Salam Pax, the author of the weblog about Iraqi life during and after the war. The movie version comes in the form of a series of shorts made by Pax on a hand-held camera. Baghdad Blogger is among a number of films about Iraq showcased at the Dutch festival, which runs until Sunday. Following the fascination with the writing of Salam Pax - not his real name - he began a regular column in The Guardian newspaper and was given a crash course in documentary film-making. For the film he travelled Iraq to document the changing landscape of the country and the problems it has faced since the invasion, speaking to ordinary Iraqis about their experiences. The festival will also see the screening of Underexposure, one of Iraq's first features to emerge since the toppling of Saddam Hussein.

Director Oday Rasheed made the film on discarded 1980s Kodak film taken from the remains for the former Ministry of Culture building. It centres on the lives of families and strangers going about their everyday business as Baghdad is under siege. Rasheed said the title was refers to the isolation felt by Iraqis under Saddam's regime and the difficult time the country is now experiencing. "Saddam's regime was hell, but now I think the hell has doubled," Rasheed said. The festival was also due to screen murdered Dutch film-maker Theo Van Gogh's film about the treatment of woman under Islam, but it was withdrawn due to safety fears. Van Gogh was shot and stabbed in November 2004, following death threats he received about his film Submission.
US critics laud comedy Sideways

Road trip comedy Sideways has had more praise heaped on it by two US critics' associations, adding to honours it has already picked up.

The Chicago Film Critics Association (CFCA) named it winner in five categories including best film and best actor for Paul Giamatti. But the director award went to Clint Eastwood for Million Dollar Baby. The Southeastern Film Critics also awarded Sideways its best film of the year accolade. Director Alexander Payne was named best director, and he also won best screenplay shared with Jim Taylor. The CFCA awarded Thomas Haden Church the best supporting actor prize and Virginia Madsen the best supporting actress award for their roles in the film.

Sideways has already been voted best film by critics associations in New York and Los Angeles and has been nominated for a Golden Globe. British actress Imelda Staunton won the CFCA best actress for the gritty abortion drama Vera Drake, adding to a growing list of awards she has won for her performance in the Mike Leigh film. Scrubs star Zach Braff was named best new director for his debut Garden State. Michael Moore's controversial documentary Fahrenheit 9/11 won the best documentary, while A Very Long Engagement won best foreign film. The Chicago critics have yet to name a date for when their awards ceremony will be held.
Dirty Den's demise seen by 14m

More than 14 million people saw "Dirty" Den Watts killed off on Friday, marking EastEnders' 20th anniversary, according to unofficial figures.

Den's death came 16 years after he was supposedly shot in 1989. But he came back to the show in September 2003. The audience for BBC One's one-hour special averaged 13.7 million and peaked at 14.2 million in the last 15 minutes, overnight figures showed. Den died after being confronted by Zoe, Chrissie and Sam in the Queen Vic.

If the ratings are confirmed, the episode will have given the soap its highest audience for a year. The overnight figures showed almost 60% of the viewing public tuned into EastEnders between 2000 and 2100 GMT, leaving ITV1 with about 13%. "We are very pleased with the figures," a BBC spokesman said. "It shows viewers have really enjoyed the story of Den's demise." The show's highest audience came at Christmas 1986, when more than 30 million tuned in to see Den, played by Leslie Grantham, hand divorce papers to wife Angie.

Two years later, 24 million saw him apparently shot by a man with a bunch of daffodils by a canal. More than 16 million viewers watched his return in 2003. The show's ratings have since settled down to about 12 million per episode. Grantham hit the headlines in May after a newspaper printed photographs of him apparently exposing himself via a webcam from his dressing room. He also allegedly insulted four co-stars. He apologised for his "deplorable actions" and "a moment's stupidity".
DVD review: Harry Potter and the Prisoner of Azkaban

This third Harry Potter film brought a change of director and a dramatic visual shake-up that really shines on DVD.

Gone are the warm, bright colours found in the two earlier films, Alfonso Cuaron brings in a bleak and cold feel that is simply gorgeous - and looks even better here than in the cinema. It is all part of the progression of Harry's story into darker areas, but you'll spend time just marvelling at the beautiful Hogwarts landscape.

This is the first Potter film where you get so lost in the screen adaptation that you forget the book. It is the third year at Hogwarts and studies are interrupted, as they always are, by a calamity that only Harry, Ron and Hermione can put right.

It sounds corny. But Harry is no longer the winsome hero, he is a moody teenager and Daniel Radcliffe pulls it off very well. Emma Watson is ever better as Hermione, and the young stars are joined by the usual myriad famous actors including Gary Oldman and Emma Thompson. The film itself is the reason to buy this DVD. But it is laden with behind-the-scenes extras, including funny, if shallow, interviews with all the main cast. But what seems like a long list of features can be swiftly whittled down to the few that you are going to watch. Younger viewers will go for the games which include a Magic You May Have Missed memory test, and Crookshanks chasing off after Scabbers. Adult viewers will ignore those and go straight to the deleted scenes. You will understand why they were deleted but it is fun to see more footage - and not have to hunt through endless menus to find it, as we did on the first Harry Potter DVD. The most interesting pieces are an interview with JK Rowling in Creating The Vision and Conjuring A Scene, a short featurette about the making of the film's big moments.
Vera Drake scoops film award

Oscar hopefuls Mike Leigh and Imelda Staunton were both winners at the 2004 Evening Standard British Film Awards.

Vera Drake - Leigh's 1950s drama about a backstreet abortionist - was named best film and Staunton, who played the title role, was named best actress. Other winners included Paddy Considine, who was crowned best actor for his role in Dead Man's Shoes. Bridget Jones: The Edge of Reason was named Evening Standard Readers' Film of 2004 at the central London ceremony.

Leigh was presented with his winner's statuette by Timothy Spall and Staunton's award was announced by Patrick Stewart, during the glittering ceremony at The Savoy on Sunday night. Evening Standard film critic Derek Malcolm said: "He [Leigh] has never made a film that is better controlled and technically more secure... If this isn't one of the films of the year, I don't know what is." The Alexander Walker Special Award - which honours those who have made a supreme contribution to British film - went to Tim Bevan and Eric Fellner, the co-chairmen of Working Title films. The production company is behind films such as My Beautiful Laundrette, Billy Elliot, About A Boy, Shaun of The Dead and Bridget Jones: The Edge of Reason.

Simon Pegg, who stars in and co-wrote Shaun of the Dead, won the 2004 Peter Sellers Award For Comedy. Other winners included Emily Blunt and Nathalie Press who were jointly named ITV London Most Promising Newcomer Award for their performances in Pawel Pawlikowski's rites-of-passage story, My Summer of Love. Pawlikowski won the best screenplay statuette, while Roger Deakins won the Technical Achievement Award for his cinematography on The Village and The Ladykillers. Guests at the ceremony included Dame Judi Dench, Kim Cattrall, Charles Dance, Bill Nighy and Colin Firth. The awards, which were hosted by Jack Dee, are to be screened on ITV London on Tuesday at 2300 GMT.
Hundreds vie for best film Oscar

A total of 267 films are eligible for the best film Oscar but only five will be chosen to go forward as nominees.

The Academy of Motion Picture, Arts and Sciences has sent out the first ballot papers with the full list of films vying for recognition. Among those expected to receive nominations are The Aviator, Million Dollar Baby and Sideways. Academy members will now vote for their favourites before the final nominees are announced on 25 January.

To be eligible for nomination a film must have been shown in a commercial theatre for seven consecutive days before the deadline of 31 December. Director Martin Scorsese's The Aviator, starring Leonardo DiCaprio went on general release on Christmas Day in the US, ensuring it just made the deadline. Studios have already begun lobbying voters, taking out full page adverts in trade publications such as Variety urging them to remember particular films when it comes to choosing what to back. Other movies tipped for possible success include Closer, starring Jude Law and Julia Roberts, Finding Neverland, with Johnny Depp as author JM Barry and Kinsey starring Liam Neeson as the famed sex scientist Alfred Kinsey. Meanwhile, design engineer Takuo Miyagishima will be awarded an Oscar at the Scientific and Technical Awards Dinner on 12 February 2005. Miyagishima is the 18th recipient of the Sawyer Award, which is "presented to an individual in the motion picture industry whose technological contributions have brought credit to the industry." The main Oscar ceremony will be held in Los Angeles on 27 February.
Hanks greeted at wintry premiere

Hollywood star Tom Hanks was in London's Leicester Square for the UK premiere of Polar Express.

The West End landmark was turned into a festive landscape complete with snow and carol singers to celebrate the arrival of the animated film. "This is Leicester Square like you've never seen it before," said Hanks, who plays five roles in the movie. Polar Express is based on a children's book which tells the story of a young boy's journey to meet Santa Claus. The 48-year-old actor crossed a three-metre high bridge built in the square, which he said was "almost impossible to get across". Hundreds of fans greeted the star, all wearing Santa hats, and mince pies were on offer. Hanks said that the new film has an "elegant message". "Christmas is a special time of the year and you get out of it what you put into it," added the two-time Academy Award winner.

"I believe in the spirit of Christmas and I think that's embodied in Santa Claus," he said. Polar Express uses technology similar to that used in Lord of the Rings to bring Gollum to life. The "performance capture" technique enables Hanks to play a number of roles, including the eight-year-old boy who is at the centre of the story, and Father Christmas. It is directed by Robert Zemeckis, who has previously worked with Hanks on Forrest Gump and Castaway.
Film row over Pirates 'cannibals'

Plans to portray Dominica's Carib Indians as cannibals in the sequel to hit film Pirates of the Caribbean have been criticised by the group's chief.

Carib Chief Charles Williams said talks with Disney's producers revealed there was "a strong element of cannibalism in the script which cannot be removed". The Caribbean island's government said Disney planned to film in Dominica. The Caribs have long denied their ancestors practised cannibalism. Disney was unavailable for comment. "Our ancestors stood up against early European conquerors and because they stood up...we were labelled savages and cannibals up to today," said Mr Williams.

"This cannot be perpetuated in movies." Shooting on the sequel is expected to begin in April, with hundreds of Dominicans applying to be extras in the movie.

About 3,000 Caribs live on the island of Dominica, which has a population of 70,000. Many Caribs were killed by disease and war during colonisation up to the 1600s. Mr Williams said he had received support from indigenous groups around the world in his efforts to have cannibalism references removed from the film. But he admitted there were some members of the Carib council who did not support the campaign. He said some did not "understand our history, they are weak and are not committed to the cause of the Carib people". The first Pirates of the Caribbean film took $305m (£162m) at the box office in the US alone. The cast and crew are to work on two sequels back-to-back, with the first to be released in 2006.
Stars gear up for Bafta ceremony

Film stars from across the globe are preparing to walk the red carpet at this year's Bafta award ceremony.

The 2005 Orange British Academy Film Awards are being held at The Odeon in London's Leicester Square. A host of Hollywood stars, including Cate Blanchett, Leonardo DiCaprio, Keanu Reeves and Richard Gere, are expected to attend Saturday's ceremony. Hosted by Stephen Fry, the glittering ceremony will be broadcast on BBC One at 2010 GMT.

Other actors expected to add to the glamour of the biggest night in UK film are Gael Garcia Bernal, Imelda Staunton, Diane Kruger, Christian Slater, Anjelica Huston, Helen Mirren and former James Bond star Pierce Brosnan. Hollywood blockbuster The Aviator, starring DiCaprio, leads the field with 14 nominations, including best film.

It is up against Eternal Sunshine of the Spotless Mind, Finding Neverland, The Motorcycle Diaries and British film Vera Drake, which has 11 nominations. British hope Imelda Staunton is one of the favourites to land the best actress award for her gritty role as a backstreet abortionist in the small-budget film. Other nominees in the best actress category include Charlize Theron for Monster, Ziyi Zhang for House of Flying Daggers and UK star Kate Winslet, who has two nods for her roles in Eternal Sunshine of the Spotless Mind and Finding Neverland.

DiCaprio faces competition from Bernal, Jamie Foxx, Jim Carrey and Johnny Depp in the best actor category. And British actor Clive Owen is hoping to repeat his Golden Globe success with a best supporting actor award for his role in Closer. His co-star Natalie Portman is up against Blanchett, Heather Craney, Julie Cristie and Meryl Streep in the best supporting actress category. Mike Leigh is up for the best director award for Vera Drake, alongside Martin Scorsese for The Aviator, Michael Mann for Collateral, Michel Gondry for Eternal Sunshine of the Spotless Mind and Marc Forster for Finding Neverland.
Wine comedy up for six film gongs

Sideways, a wine-tasting comedy starring Paul Giamatti, is up for six Independent Spirit Awards, the art-house version of the Oscars.

The awards are held on 26 February, the day before the Oscars. Spanish drama Maria Full of Grace, about a Colombian woman who becomes a drug courier, got five nominations. Controversial biopic Kinsey, starring Liam Neeson as sex researcher Alfred Kinsey, was one of four films to get four nominations. The awards, now in their 20th year, honour quirky low-budget films, all of which must have a degree of independent financing. Sideways is written and directed by Alexander Payne, who directed the 2002 hit About Schmidt, winning Jack Nicholson his 12th Academy Award nomination.

"These awards, for better or worse, mean everything," said Sideways producer Michael London, adding they were a "huge first step" toward getting recognition from other awards. Among the other films receiving four nominations apiece were Brother to Brother, a drama about a young gay black man forced to live on the streets, Robbing Peter and Primer. Primer, a $7,000 (£3,650) tale of discovery, won top prize at the Sundance film festival earlier this year. Walter Salles critically acclaimed The Motorcycle Diaries and the forthcoming thriller The Woodsman, starring Kevin Bacon, received three nominations each. Also in the running, with two nominations, are high school comedy Napoleon Dynamite, The Door in the Floor and Garden State - written, directed and starring Scrubs star Zach Braff alongside Natalie Portman. The awards were announced by actors Selma Blair and Dennis Quaid in Los Angeles on Tuesday.
No ads for Passion Oscar campaign

Producer Mel Gibson will not be using paid advertisements to promote The Passion of the Christ to voters in next year's Academy Awards.

Gibson and his Icon Productions partner Bruce Davey said they would not be campaigning in print, radio or TV for success at the Oscars in February. "This film should be judged on its artistic merit, not who spends more money on advertising," Davey said. But DVDs will be sent to Oscar voters, who will be invited to screenings. Icon spent very little on advertising the film, which deals with the last hours of Jesus Christ's life, when it was released earlier this year - instead, it made the film available for special screenings at churches. It went on to gross over $600m (£322m) in ticket sales worldwide. Over recent years, marketing films to the members of the Academy of Motion Picture Arts and Sciences has become a multi-million dollar industry. Last year, the academy formed a committee to tighten the rules after the campaigns spilled over into personal attacks between studios. Academy president Frank Pierson praised Gibson's move for working to restore the Oscars as a "celebration and appreciation of excellence," and resisting the "crass commercialisation that was threatening the integrity of the award".
Berlin honours S Korean director

South Korean film director Im Kwon-Taek has received an honorary Golden Bear at the Berlin Film Festival.

Im, who has made more than 100 films in a 40-year career, was hailed for his "remarkable visual beauty, technical innovation, and intellectual depth". Twenty of his films are screening in a special retrospective during the festival, which runs until 20 February. The veteran film-maker, 68, won the best director prize at the Cannes Film Festival in 2002 for Chihwaseon. "Although his films vary in style, they all bear his unmistakable stamp: they are forceful and charged cinematographically, as well as reticent, stylised and musical," organisers said in a statement. Meanwhile, a film version of Bizet's opera Carmen - translated into the South African language Xhosa - has received a warm reception at the festival. U-Carmen eKhayelitsha (Carmen in Khayelitsha), which is one of 21 films up for Berlin's top prize, the Golden Bear, is British director Mark Dornford-May's first feature film. "It's the first time any opera has been translated into a black South African language. Xhosa works brilliantly, it's such a musical language," said music director Charles Hazlewood.
US actor Ossie Davis found dead

US actor Ossie Davis has been found dead at the age of 87.

Davis, who was married to actress Ruby Dee, was found dead on Friday in his hotel room in Miami Beach, Florida, where he was making a film. Davis, whose 65-year career included credits as a producer, director, actor and writer for stage and screen, was also a civil rights activist. Miami Beach police spokesman Bobby Hernandez said the cause of death appeared to be natural.

Davis's body was discovered by his grandson and paramedics at the Shore Club hotel in Miami Beach, where the actor had been shooting the film Retirement. Mr Hernandez said: "After gaining entry, they found Mr Davis had passed away. "The cause of death appears to be natural. According to his grandson he was suffering from heart disease." Some of Davis's best known roles included The Joe Louis Story and Gone Are the Days - a film he adapted from his own play, Purlie Victorious. He also appeared in 7 Spike Lee movies, including School Daze, Do the Right Thing and Jungle Fever.

His film debut, in 1950, was in the film No Way Out, starring Sydney Poitier and Ruby Dee. Davis and Dee were married for more than 56 years and together received Kennedy Center honours in 2004 for their body of work. The Actors' Equity Association issued a statement calling Davis "an icon in the American theatre" and he and Dee "American treasures". Davis was also a prominent figure in the civil rights movement and was a voice for racial equality. He was a featured speaker at the funerals of both Martin Luther King Jnr and Malcolm X. Besides Dee, Davis is survived by three children Nora, Hasna and Guy, a blues artist, and seven grandchildren.
Jugnot 'tops French actor league'

Actor Gerard Jugnot - star of the Oscar-nominated film The Chorus - has beaten Gerard Depardieu to become France's best-paid actor of 2004.

Jugnot made 5.45m Euros (£3.77m) last year, according to a table drawn up by France's Le Figaro newspaper. In The Chorus (Les Choristes), Jugnot plays an inspiring music teacher at a school for troubled boys in 1949. Despite starring in five films in 2004, Depardieu made 3.35m Euros (£2.31m) putting him third place in the chart. "His name [Depardieu] is no longer sufficient to guarantee the success of a film," said Le Figaro newspaper. The Chorus, which Jugnot also co-produced, has drawn an audience of nearly nine million people since its release last year.

Godzilla star Jean Reno was France's second best-paid actor in 2004, earning 3.55m Euros (£2.45m) . His roles include a recent uncredited cameo in the Oscar-nominated Hotel Rwanda. The highest-ranking woman on Le Figaro's list was Audrey Tautou in 10th place, earning 885,000 Euros (£611,000). She starred in Jean-Pierre Jeunet's A Very Long Engagement (Un Long Dimanche de Fiancailles) and is also lined up to co-star with Tom Hanks in Ron Howard's The Da Vinci Code. The Chorus is nominated for best foreign film at Sunday's Oscar ceremony. On Saturday, it will compete for the title of best film against fellow nominee A Very Long Engagement in France's Cesar film awards.
Howl helps boost Japan's cinemas

Japan's box office received a 3.8% boost last year, with ticket sales worth 211bn yen (£1.08bn).

The surge was led by animated movie Howl's Moving Castle, which took 20bn yen (£102m) to become the biggest film in Japan in 2004. It is expected to match the 30.7bn yen (£157m) record of Hayao Miyazaki's previous film Spirited Away. Japan Motion Picture Producers figures showed that 170 million cinema admissions were made in Japan in 2004. The Last Samurai, starring Tom Cruise, was the biggest foreign movie hit in Japan last year, taking 13.8bn yen (£70.7m).

It was followed by Harry Potter and the Prisoner of Azkaban, Finding Nemo and The Lord of the Rings: The Return of the King. The second highest-grossing Japanese film was romantic drama Crying Out Love in the Centre of the World, followed by Be With You and Pocket Monsters Advanced Generation. Japanese films accounted for 37.5% of Japan's box office total last year, with foreign films taking the remaining 62.5%. This represented a 4.5% gain for the proportion of Japanese films in 2004 compared to 2003. The number of Japanese films released rose to 310 in 2004 from 287 the previous year. Sales of movies on DVD and video amounted to 497bn yen (£2.54bn) for the year.
Berlin applauds Hotel Rwanda

Political thriller Hotel Rwanda was given a rousing reception by spectators at the Berlin Film Festival on Saturday.

The movie's star Don Cheadle also received a standing ovation when he stepped onto the stage after the show. The film is the true story of the hotel manager who saved 1,200 Tutsis from death during the Rwandan genocide. The film, showing out of competition in Berlin, is nominated for three Oscars, including best actor for Cheadle. Sophie Okonedo, who plays Cheadle's wife Tatiana, is nominated for best supporting actress. The film is also in the running for best original screenplay. Cheadle, was joined on stage at Berlin by Paul Rusesabagina, the hotel manager he plays in the film, Mr Rusesabagina's wife and his extended family, who fled Rwanda and now live in Belgium. Mr Rusesabagina used his influence as a prominent Hutu businessman to shelter potential victims of the Rwandan genocide, contacting dignitaries including Bill Clinton, the King of Belgium as well as the French foreign ministry. Hotel Rwanda is one of two films addressing the genocide at the 55th Berlin Film Festival, which runs until 20 February. Sometimes in April is a feature by Raoul Peck competing for the festival's coveted Golden and Silver Bear awards. The film was made exclusively in Rwanda whereas Hotel Rwanda was shot mostly in South Africa, with some scenes made in Kigali.
De Niro film leads US box office

Film star Robert De Niro has returned to the top of the North American box office with his film Hide and Seek.

The thriller shot straight to the number one spot after taking $22m (£11.7m) at the box office. De Niro recently spent three weeks at the top with comedy Meet The Fockers, which was at number five this week. Oscar hopefuls The Aviator, Million Dollar Baby and Sideways all cashed in on their multiple nominations with stronger ticket sales.

In Hide and Seek, De Niro plays a widower whose daughter has a creepy imaginary friend. Despite lukewarm reviews from critics, the film took more than the expected $18m (£9.5m). "The element of a real actor in a psychological thriller certainly elevated it," said Bruce Snyder, president of domestic distribution at 20th Century Fox. Clint Eastwood's Million Dollar Baby led the Oscar hopefuls with $11.8m (£6.3m), coming in at number three during its first weekend of wide release. The Aviator, a film biography of Howard Hughes that leads the Oscar field with 11 nominations, was at number six for the weekend with $7.5m (£4m). Oscar best-picture nominee Sideways entered the top ten for the first time in its 15th week of release. It came in seventh $6.3 (£3.35m). Last week's top film, Ice Cube's road-trip comedy Are We There Yet?, slipped to second place with $17m (£9m), while Coach Carter fell two places to number four, taking $8m (£4.25m) in its third week. Rounding out the top ten were In Good Company - starring Dennis Quaid and Scarlett Johansson - Racing Stripes and Assault on Precinct 13.
Willis sues over movie 'injury'

Actor Bruce Willis is suing Revolution Studios over an injury he said he suffered while making Tears of the Sun.

Willis is seeking medical expenses after he said he was hit in the head by a firework during the filming of the 2002 movie, produced by the firm. The lawsuit said the star has endured mental and physical injuries as a result of the alleged incident. "We are not able to comment on pending litigation," Revolution Studios spokesman Sean Dudas said.

In Tears of the Sun Willis plays a US military commander who disobeys orders to try and help save a doctor and patients trapped in the Nigerian jungle. Directed by Antoine Fuqua, the film was poorly received by critics and did not perform strongly at the box office. According to the lawsuit, the injury was suffered during the firing of explosions as part of a special effect. The explosions, known as squibs, were intended to "simulate the appearance of bullets striking the ground". The lawsuit said Willis has endured "extreme mental, physical and emotional pain and suffering." There were no specific details on the injuries. While Willis does not seek specific monetary damages, the lawsuit noted that the star "was required to and did employ physicians and other medical personnel". It stated he will incur additional future medical expenses. The lawsuit said Revolution Studios and special effects foreman Joe Pancake "had a duty to Willis to ensure that the squibs were inspected, set up, placed and detonated in a safe manner, and to employ technicians who were trained and competent in their use".
Foxx and Swank win US awards

Jamie Foxx and Hilary Swank have won the Screen Actors Guild Awards for best male and female film actors, boosting their Oscars hopes this month.

Foxx's portrayal of late soul-singer Ray Charles in Ray had already earned him a prestigious Golden Globe award. Swank triumphed for playing a gutsy female boxer in Million Dollar Baby. Modest wine country comedy Sideways knocked out favourites Million Dollar Baby and The Aviator by taking the top prize for best cast performance.

The Screen Actors Guild (SAG) represents US film and TV actors. Its winners often go on to win Oscars. In other nominations, Cate Blanchett triumphed as the best supporting actress for her role as Katharine Hepburn in The Aviator. Veteran actor Morgan Freeman took the best supporting actor award for playing a prize-fighter turned gym manager in Million Dollar Baby.

"Thank you for Ray Charles for just living so complex and so interesting, and making us all just come together," said Foxx, accepting his award in Los Angeles on Saturday.

He also praised the film director: "Thank you for Taylor Hackford for taking a chance with an African-American film. Taylor, you're my director of the year." Swank, too, was full of praise for her director and co-star Clint Eastwood. "I bow down to you," Swank said to the 74-year-old Eastwood. "You are a talent beyond compare. If I'm half the person you are and half the talent you are when I'm 74, I will know that I've accomplished something great."

Both Foxx and Swank are now considered to be among the favourites to get Oscars - the Hollywood's ultimate prize. However, Swank has to overcome a strong challenge from Annette Bening, a nominee for the theatre farce Being Julia. Meanwhile, ballots for Oscars - the Hollywood's top honours - were mailed earlier this week to members of the Academy of Motion Picture Arts and Sciences. The voting is due to end on 22 February - five days before the ceremony.
Spike Lee backs student directors

Film-maker Spike Lee says black representation is stronger than ever in cinema and TV but the true power in entertainment lies behind the camera.

The She Hate Me director urged students at his old Atlanta university, Morehouse College, to seek "gatekeeper positions" behind the scenes. Lee told them to "work up the corporate ladder because everybody can't be an actor, everybody can't make a record". He spoke as part of a discussion panel, then led a retrospective of his films.

Returning to his old university, which educates only African American students, Lee discussed the challenges facing black people in the entertainment industry. "Even Denzel (Washington), he's getting $20m a movie. But when it comes time to do a movie, he has to go to one of those gatekeepers," Lee said. He told aspiring young film-makers in the audience not to ignore non-traditional routes to getting a movie made, including raising funds independently and releasing films straight to DVD. "It's a huge market," the 47-year-old director said. "It's not something that should be looked upon as a stepchild." Lee has made more than 25 films, including Jungle Fever, Do the Right Thing, Summer of Sam and 1986 hit She's Gotta Have It.
Horror film heads US box office

A low-budget horror film produced by Evil Dead director Sam Raimi has topped the North American box office.

Boogeyman, which focuses on a man who returns to his childhood home to confront his traumatic past, took $19.5m (£14.9m) in three days. Last week's chart-topper, the Robert de Niro thriller Hide and Seek, fell to number four. Other new entries included The Wedding Date, a comedy starring Will and Grace's Debra Messing, at number two.

The road-trip comedy Are We There Yet? and multiple Oscar nominee Million Dollar Baby completed the top five. Other Oscar contenders, including The Aviator and Sideways, continued to perform strongly at the box office. The Aviator has taken $75m (£40m) so far, while Sideways has taken $46.8m (£24.8m) in a more limited release.

Boogeyman, which cost just $7m (£3.5m) to make, performed well even though it was not screened to critics before release - normally a sign that a film will get bad reviews or perform poorly at the box office. "I certainly believe it's a genre where people are going to be more moved by the marketing materials for the movie than by what the critics say," said Rory Bruer, head of distribution for Sony Pictures, which released the film in the US. Overall the weekend box office was strong despite the fact that it was American football's Super Bowl weekend - a time when cinema admissions generally fall. This year, the top 12 films grossed around $91m (£48.3m), compared to 2004's Super Bowl weekend when the total box office was $73.4m (£38.9m).
Mumbai bombs movie postponed

The release of a film about the Mumbai (Bombay) blasts in 1993 has been postponed following protests by those on trial for the bombings.

Investigating the blasts which killed more than 250 people and wounded 1,000, the film Black Friday had been due to open across India on Friday. But 36 people accused in connection with the blasts said it should not be screened until the trial is over. Mumbai High Court postponed the film's launch until 3 February.

Black Friday is based upon the novel of the same name written by journalist S Hussain Zaidi, which looks at the 15 explosions which rocked Mumbai on 12 March 1993. Director Anurag Kashyap said the film's release should not be delayed as the book has already been on sale for two years. "If you have not gone against the book, then how can you go against the movie?" Mr Kashyap's lawyer Mihir Desai said. This is the second time that those accused in connection with the blasts have sought legal intervention regarding the film.

They previously asked that a line from the movie's poster, which claimed the film portrayed "the true story of the Bombay bomb blasts", be removed. Their lawyer, Majeed Memon, said: "We had argued that how can a film say it is telling the true story when the court itself is struggling to find the truth? "So we said they should remove the line from their promotional posters and they did give us an assurance that they would do so." The Mumbai bombings case is one of India's longest-running trials. A special court was set up to hear the case and regular hearings have taken place there for the last nine years, with more than six hundred witnesses questioned.
DVD review: I, Robot

Only one man recognises that robots are a threat to humanity - but that's fine because it only takes one man to save the day in the thriller I, Robot.

Will Smith co-stars alongside more CGI robots than you can count and as a thrill-a-minute kind of action film, it's perfectly adequate. You'll have forgotten it all tomorrow but you'll have a fun night with the film and all the extras. There is a one-disc version that has commentaries and a Making Of but the two-disc adds more. Unusually for this kind of film, the extras don't solely concentrate on the special effects. They're covered but there's also a general Production Diary and a Post-Production feature.

Remember the National Lottery's draw machines Arthur and Guinevere? They were more accurate than this glossy Hollywood version of the tale.

But as long as you're not expecting a documentary, live with it: King Arthur is a fun, exciting, totally shallow experience and looks excellent. Clive Owen is the brooding king, Keira Knightly rises above her costume and Ray Winstone gives it all some grit. It's at its best in its battle scenes which are well done and are also the best part of the Making Of extra.

Less flashy than a David Attenborough show and less detailed than a Simon Schama one, the BBC series British Isles nevertheless turned out to be quite engrossing. Admit it, the fact that this is one of the shows Alan Titchmarsh left Ground Force to present did mean that you expected something equally frothy. But Titchmarsh turns out to know his subject and the sight of our present-day landscape being peeled back to reveal the past was fascinating. He's now written an accompanying book, too.
Brando 'rejected Godfather role'

Late film star Marlon Brando is said to have repeatedly turned down his Oscar-winning role in The Godfather.

The actor's friend Budd Schulberg told Vanity Fair magazine that Brando's assistant suggested he read the novel. The actor repeatedly refused, throwing the book at her and saying: "For the last time, I won't glorify the mafia". But Brando, who died last July at the age of 80, eventually took the role of Don Corleone, winning him an Oscar in 1973 which he notoriously refused. The actor sent a young woman dressed in Native American costume to refuse the award on his behalf and to draw attention to the plight of Native Americans.

Schulberg told the magazine that Brando's assistant realised the film star had warmed to the idea of The Godfather role when he sported a drawn-on pencil moustache and asked: "How do I look?" His assistant, Alice Marchak, said that he looked like George Raft, an actor famed for playing gangsters on the silver screen. Every time she went to see Brando from then on, she added, he was wearing a different gangster-style moustache. Brando was asked to screen test for the role in The Godfather, as studio executives were said to be reluctant for the actor to play the part following problems on the set of Brando's previous film Mutiny on the Bounty . In fact Brando's Academy Award triumph revived his career. The actor was nominated for an Oscar the following year for his role in Bernardo Bertolucci's Last Tango in Paris. Before his death, Brando granted gaming company Electronic Arts the rights to use his voice and image in a video game based on the Godfather film and book and recorded voice-overs which closely resembled his role as Don Corleone. Brando's co-stars from The Godfather, James Caan and Robert Duvall, will also reprise their roles for the video game, it was confirmed on Wednesday.
Dutch watch Van Gogh's last film

The last film to be made by the slain Dutch director Theo van Gogh, called 06/05, has been premiered in The Hague.

Members of Van Gogh's family and celebrities attended the screening of 06/05, based on the murder of the anti-immigration politician Pim Fortuyn. Van Gogh was shot and stabbed to death in Amsterdam six weeks ago. A Dutch-Moroccan man suspected of radical Islamist links has been charged. The killing, and Fortuyn's death in 2002, convulsed the Netherlands. Many Dutch people have questioned their country's self-image as a peaceful, tolerant nation in the wake of the murders, which triggered heated debate about immigration.

An animal rights activist was sentenced to 18 years in prison last year for killing Fortuyn. Earlier this year, Van Gogh made a film accusing Islam of promoting violence against women. It caused outrage among Muslims and death threats were made against him. The film 06/05 will become available on the internet on Wednesday and go on general release in Dutch cinemas in January. Van Gogh's movie mixes real images of the day of Fortuyn's murder with a fictional plot about Dutch intelligence services conspiring to silence the politician. The story unfolds through the eyes of a freelance photographer who unwittingly takes pictures revealing the involvement of Dutch authorities in Fortuyn's murder. Photographer Jim de Booy then goes on the run from secret service agents who burgle his home and threaten his family.
Berlin hails European cinema

Organisers say this year's Berlin Film Festival, which opens on Thursday with period epic Man to Man, will celebrate a revitalised European cinema.

Of the 21 films in competition for the Golden and Silver Bear awards, more than half are from Europe with France particularly well represented. Festival director Dieter Kosslick says this strong showing signals "a new consciousness for European films". "They're on an incredible winning streak," he told the Reuters agency. "This isn't to say there aren't any good American films," he continued. "It's just that there are more good European films."

However, Mr Kosslick refused to accept that widespread opposition to the Iraq war had turned audiences against Hollywood imports. "There is no anti-American mood," he said. Some 350 films will be screened at this year's festival, with a further 300 shown at the European Film Market that runs alongside it. More than a dozen celebrities are scheduled to attend, among them Will Smith, Kevin Spacey and Keanu Reeves. But Mr Kosslick says more would be coming had the Academy Awards not been brought forward to 27 February. "I'm not worried that we won't be able to fill the red carpet with stars," he said, though he admitted the festival may be moved to January next year to avoid a similar clash. The 10-day Berlinale runs until 20 February.
Sky takes over Oscar night mantle

Sky has signed a major new deal to broadcast this year's Academy Awards, taking over from three years of live Oscar coverage on the BBC.

Sky said it was "honoured to have won exclusive broadcasting rights" and promised to cover the event "in a way no other broadcaster could". The BBC denied it had lost a bidding war, saying it had "decided to pass the mantle to another broadcaster". The ceremony, hosted by newcomer Chris Rock, takes place on 27 February 2005.

Sky's coverage will launch with the nominations on 25 January and will include themed programming across Sky channels including Sky News, Sky Travel and the Biography Channel. There will also be a month-long season of Oscar-winning films on Sky Movies in the run up to the event and live uninterrupted coverage on the night. "We are honoured to have won the live and exclusive broadcasting rights for The Academy Awards," said Sky Networks' Sophie Turner Laing. "Sky is the natural place to see the biggest and most prestigious film event of the year, and will cover the event in a way that no other broadcaster could."

Sky first scooped Oscar rights from the BBC in 1999, but the BBC won them back in 2001 when Sky was forced to pull out of a bidding war due to financial constraints. "BBC viewers will of course be able to watch quality coverage of the 2005 Academy Awards on the BBC's bulletins and news programmes," a spokesman said. Among the films tipped to do well at this year's Academy Awards are Martin Scorsese's The Aviator, Jean-Pierre Jeunet's A Very Long Engagement and the Ray Charles biopic, Ray.
Snicket tops US box office chart

The film adaptation of Lemony Snicket novels has topped the North America box office chart, displacing Ocean's 12.

A Series of Unfortunate Events, starring Jim Carrey, took $30.2m (£15.5m) in its debut weekend. Ocean's 12 fell to number two while new entry Spanglish entered the chart at number three, taking $9m (£4.6m). A Series of Unfortunate Events also stars Scottish comedian Billy Connelly, while Carrey takes on a number of different roles in the surreal film. The only other new entry in the top 10 was re-make, Flight of the Phoenix, at number eight, starring Dennis Quaid. Carrey entertained crowds at the UK premiere of Lemony Snicket in London on Friday. The actor grabbed co-star Meryl Streep and whisked her around Leicester Square. Based on the cult children's books by author Daniel Handler, the film follows three children who are orphaned when their parents die in a fire. They are taken in by their wicked uncle Count Olaf, played by Carrey, who schemes to get his hands on their fortune.
Spirit awards hail Sideways

The comedy Sideways has dominated this year's Independent Spirit Awards, winning all six of the awards for which it was nominated.

It was named best film while Alexander Payne won best director and best screenplay, along with writing partner Jim Taylor. It also won acting awards for stars Paul Giamatti, Thomas Haden Church and Virginia Madsen. Sideways is tipped to do well at Sunday's Oscars, with five nominations.

The awards, now in their 20th year, are given to films made outside the traditional studio system, and are traditionally held the day before the Oscars. Other winners included Catalina Sandino Moreno, who took best actress for her role as a drug smuggler in the Colombian drama Maria Full of Grace. Moreno is also nominated for best actress at the Oscars. The best first screenplay award went to Joshua Marston for Maria Full of Grace. Scrubs star Zach Braff won the award for best first feature for Garden State, which he wrote, directed and starred in. Oscar-nominated euthanasia film The Sea Inside from Spain won best foreign film, while Metallica: Some Kind Of Monster was awarded best documentary. Actor Rodrigo de la Serna took the best debut performance prize for The Motorcycle Diaries. The awards are voted for by the 9,000 members of the Independent Feature Project/Los Angeles, which includes actors, directors, writers and other industry professionals. Last year's big winner, Lost In Translation, went on to win the Oscar for best original screenplay, for writer-director Sofia Coppola.
Tautou film tops Cesar prize nods

French film A Very Long Engagement has received 12 nominations for France's Cesar film awards, despite a recent ruling it was "not French enough".

The World War I romantic drama starring Audrey Tautou, was recently ruled "too American" by a Paris court as it was partially backed by Warner Bros. But the Cesar organisers modified their rules to allow the film to compete. The film, directed by Jean-Pierre Jeunet, received best actress, picture and director nominations.

Last November a court judged the film was too American to compete in French film festivals. Two associations of French producers challenged Jeunet's right to French government subsidies, because Warner Bros was a backer. The ruling meant the movie - which was filmed in France and used French actors and technicians - was not eligible to compete for French prizes. But Alain Terzian, president of Cesar organisers, the Academie des Arts et Techniques du Cinema, said the changes in eligibility rules, which allow films "of French expression", were made three months prior to the court decision. Other films in the best film category include Police drama 36, Quai Des Orfevres, Arnaud Desplechin's Kings And Queen, Abdellatif Kechiche's L'Esquive and France's number one film at the 2004 box-office The Chorus.

Best actors are Daniel Auteuil for 36, Mathieu Amalric for Kings And Queen, Gerard Jugnot for The Chorus, Philippe Torreton for L'Equipier and Benoit Poelvoorde for Podium. Tautou will compete against Maggie Cheung , Emmanuelle Devos, Yolande Moreau and Karin Viard for best actress. Michael Moore's Fahrenheit 9/11, The Motorcycle Diaries, Lost in Translation, Eternal Sunshine of the Spotless Mind and 21 Grams are all vying in the best foreign film prize. The awards ceremony will be held on 26 February. This year, Will Smith, star of I, Robot, Independence Day and Men In Black, will be given an honorary Cesar, along with French singer/actor, Jacques Dutronc.
Animation charms Japan box office

Oscar-winning director Hayao Miyazaki's latest film has set a new Japanese box office record, with 1.5bn yen ($14.3m) in two days, according to reports.

Howl's Moving Castle is the follow-up to Miyazaki's Spirited Away, which won best animation at last year's Oscars. It is based on the children's book by English writer Diana Wynne Jones. It has registered the highest opening weekend takings of any Japanese film in the country, according to trade publication Screen Daily.

The film is about an 18-year-old girl who is trapped in an old woman's body after being put under a spell by a witch. Its two-day takings represented 1.1 million cinema admissions, Screen Daily said. The film's distributor Toho expects 40 million people to see it in total - almost one third of the country's population - it added. The film won the Golden Osella for outstanding technical contribution at this year's Venice Film Festival.
US box office set for record high

Ticket sales at the US box office are predicted to break records this year, with figures expected to reach $9.4 billion, beating 2002's all-time high.

Overall figures could be dampened by the lack of a Christmas hit like last year's Oscar-winning Lord of the Rings. Traditionally, ticket sales during the festive season account for 20% of the annual total. Although admissions have actually fallen this year, the predicted high is down to increasing ticket prices. According to Exhibitor Relations President Paul Dergarabedian, the average cost of a cinema ticket could be as high as $6.25 in 2004, compared to $5.80 in 2002. This year some of the biggest hits such as The Passion of the Christ and Fahrenheit 9/11 came from outside the major studios which are usually responsible for the key blockbusters.

"Many of the films that did well (with audiences) are not necessarily the films that made a lot of money," said Mr Dergarabedian. He added that surprise hits had come from some of the more art-house offerings such as Napoleon Dynamite and critical hit Sideways. Sony Pictures, responsible for hits like Spiderman 2 and The Grudge, are expected to top domestic market share for the second time in three years, with $1 billion-plus in sales for the third consecutive year. Sony Pictures Entertainment vice chairman. Jeff Blake said: "We had a really diverse slate this year, and... certainly we pulled off one of the surprises with Grudge." Horror movie The Grudge cost Sony $10 million to make but brought in $110 million. It's the latest in a recent trend for Hollywood studios to back the upper and lower ends of the market, whilst ignoring the middle. Warner Inc are likely to end the year in second place on market share with around $1.25 billion, with Disney at number three.
Low-budget film wins Cesar

A film that follows a group of alienated youth in a Paris suburb as they prepare to perform an 18th Century play has won France's top cinema award.

L'Esquive earned a Cesar prize for its director, Tunisian-born Abdellatif Kechiche, and its young star, the 18-year-old actress Sara Forestier. It saw off competition from big-budget French epic, A Very Long Engagement, and the box-office hit, The Chorus. US film Lost in Translation won the award for best foreign feature. The wistful romantic comedy directed by Sofia Coppola has already won several awards, including an Oscar for best screenplay in 2004. Its late release in France made it a contender for this year's Cesars.

The low-budget L'Esquive depicts the travails of a group of youth getting ready to perform a school play by the 18th-Century dramatist, Marivaux. The actors are mostly amateurs and the action is set in the impoverished suburbs of Paris, home to thousands of immigrants from North Africa and their children. Kechiche said he made the film because he "wanted to show people we don't normally see at the cinema". A Very Long Engagement, a World War I drama featuring Audrey Tautou, won five Cesar awards. The Chorus, a film about a schoolteacher who introduces an unruly classroom to the pleasures of classical singing, won two awards - for best music and best sound. US actor Will Smith, who won an honorary award at the ceremony, thanked his family and his "hero", Nelson Mandela, in his speech.
Tautou 'to star in Da Vinci film'

French actress Audrey Tautou, star of hit film Amelie, will play the female lead in the film adaptation of The Da Vinci Code, it has been reported.

The movie version of Dan Brown's best-selling novel is being directed by Ron Howard and also stars Tom Hanks. Tautou will play Hanks' code-cracking partner, according to various newspapers. She is currently starring in A Very Long Engagement, directed by Jean-Pierre Jeunet. Jeunet was also responsible for directing Tautou in Amelie in 2001, which launched the actress into the mainstream.

She also starred as the lead role in critically-acclaimed film Dirty Pretty Things in 2002. Oscar-winning director Ron Howard chose Tautou for the part, preferring a French actress to a big name Hollywood star. UK actress Kate Beckinsale had been widely tipped as a possibility for the role alongside Vanessa Paradis and Juliette Binoche. The thriller upon which the movie is based has sold more than 17 million copies and is centred on a global conspiracy surrounding the Holy Grail mythology. The Louvre Museum, scene of the gruesome murder at the beginning of the novel, recently gave permission for filming to take place there, showbusiness newspaper Variety reported. The $100m movie will be produced by Columbia/Sony Pictures and is due for release on May 19, 2006 in the United States and France.
Foxx and Swank take actors awards

Jamie Foxx and Hilary Swank have won the Screen Actors Guild Awards for best male and female film actors, boosting their Oscars hopes this month.

Foxx's portrayal of late soul-singer Ray Charles in Ray had already earned him a prestigious Golden Globe award. Swank triumphed for playing a gutsy female boxer in Million Dollar Baby. Modest wine country comedy Sideways knocked out favourites Million Dollar Baby and The Aviator by taking the top prize for best cast performance.

The Screen Actors Guild (SAG) represents US film and TV actors. Its winners often go on to win Oscars. In other nominations, Cate Blanchett triumphed as the best supporting actress for her role as Katharine Hepburn in The Aviator. Veteran actor Morgan Freeman took the best supporting actor award for playing a prize-fighter turned gym manager in Million Dollar Baby.

"Thank you for Ray Charles for just living so complex and so interesting, and making us all just come together," said Foxx, accepting his award in Los Angeles on Saturday.

He also praised the film director: "Thank you for Taylor Hackford for taking a chance with an African-American film. Taylor, you're my director of the year." Swank, too, was full of praise for her director and co-star Clint Eastwood. "I bow down to you," Swank said to the 74-year-old Eastwood. "You are a talent beyond compare. If I'm half the person you are and half the talent you are when I'm 74, I will know that I've accomplished something great."

Both Foxx and Swank are now considered to be among the favourites to get Oscars - the Hollywood's ultimate prize. However, Swank has to overcome a strong challenge from Annette Bening, a nominee for the theatre farce Being Julia. Meanwhile, ballots for Oscars - the Hollywood's top honours - were mailed earlier this week to members of the Academy of Motion Picture Arts and Sciences. The voting is due to end on 22 February - five days before the ceremony.
Children vote Shrek 2 best film

Young UK film fans voted animated Hollywood hit Shrek 2 best film at the children's Bafta awards on Sunday.

More than 6,000 children voted in the only category chosen by fans. Harry Potter and the Prisoner of Azkaban, runner-up in the poll, was the choice of the Bafta experts who named it best feature film. BBC One Saturday morning show Dick and Dom In Da Bungalow won two awards - best entertainment and best presenters for Richard McCourt and Dominic Wood.

Former Playschool presenter Floella Benjamin was awarded the Special Award for outstanding creative contribution to children's film and television. She first appeared on Playschool 25 years ago and was made an OBE in 2001 for services to broadcasting. South American-themed cartoon Joko! Jakamoko! Toto! won the honour for pre-school animation and its writer Tony Collingwood for original writer. Debbie Isitt won the award for best adapted writer for her work with Jacqueline Wilson's The Illustrated Mum, which won the award for best schools drama.

Schools' Factual (primary) - Thinking Skills: Think About It - Hiding Places

Schools' Factual (secondary) - In Search of the Tartan Turban

Pre-School Live Action - Balamory

Animation - Brush Head

Drama - Featherboy

Factual - Serious Desert Interactive Bafta - King Arthur International category - 8 Simple Rules for Dating my Teenage Daughter
UK debut for Kevin Spacey movie

Hollywood stars Kevin Spacey and Kate Bosworth attended the British premiere of new film, Beyond the Sea, in London's Leicester Square on Thursday.

Spacey, 45, wrote, directed and starred in the film, inspired by the life of 1950s croooner Bobby Darin. "This is my tribute to someone I think was a remarkable talent," said Spacey, who, as Darin, sings all 18 songs on the film soundtrack. Bosworth, 21, plays Darin's wife - real life Hollywood actress Sandra Dee. "I knew absolutely nothing about Bobby Darin before this film, but now I'm a huge fan," said Bosworth, who attended the premiere with British boyfriend Orlando Bloom.

"There is darkness and tragedy in the story, and it was a dream for me to land this part." Actress Sandra Dee continues to live in Los Angeles as a virtual recluse, but has given her approval to the biopic.

"She called me last week and said she loved it," said Spacey, who was joined at the premiere by members of the boy band Westlife. Spacey, a double Oscar-winner, has long been fascinated by the story of singer Bobby Darin. The voice behind Mack the Knife, Dream Lover and Beyond the Sea, fought childhood illness to become one the biggest stars of the 1950s, but died aged 37 from the heart condition that had troubled him all his life. "Bobby Darin was one of the greatest entertainers the world has ever known, and yet, because he died young, he's been kind of forgotten," said Spacey at the premiere. "Making this film was the most fun I've ever had in my entire life." The movie also stars British actors Bob Hoskins and Brenda Blethyn, as Darin's mother.
Ray DVD beats box office takings

Oscar-nominated film biopic Ray has surpassed its US box office takings with a combined tally of $80m (£43m) from DVD and video sales and rentals.

Ray's success on DVD outstripped its $74m (£40m) US box office total, earning more than $40m (£22m) on the first day of the DVD's release alone. Ray has been nominated in six Oscar categories including best film and best actor for Jamie Foxx. The film recounts the life of blues singer Ray Charles, who died in 2004. In its first week on home entertainment release the film was the number one selling DVD, with the limited edition version coming in at number 11. Sony horror film The Grudge, starring Michelle Gellar, was the US' second best-selling DVD, with Jennifer Lopez and Richard Gere's romantic comedy Shall We Dance? at number three. Foxx's critically acclaimed performance as Ray has already earned him a Screen Actors Guild Award for best actor, as well as a prestigious Golden Globe. Ray director Taylor Hackford, responsible for the classic 1982 film An Officer and a Gentleman, has also received an Oscar nomination in the best director category. The film's three other Oscar nominations are for costume, film editing and sound mixing.
Ocean's Twelve raids box office

Ocean's Twelve, the crime caper sequel starring George Clooney, Brad Pitt and Julia Roberts, has gone straight to number one in the US box office chart.

It took $40.8m (£21m) in weekend ticket sales, according to studio estimates. The sequel follows the master criminals as they try to pull off three major heists across Europe. It knocked last week's number one, National Treasure, into third place. Wesley Snipes' Blade: Trinity was in second, taking $16.1m (£8.4m). Rounding out the top five was animated fable The Polar Express, starring Tom Hanks, and festive comedy Christmas with the Kranks.

Ocean's Twelve box office triumph marks the fourth-biggest opening for a December release in the US, after the three films in the Lord of the Rings trilogy. The sequel narrowly beat its 2001 predecessor, Ocean's Eleven which took $38.1m (£19.8m) on its opening weekend and $184m (£95.8m) in total. A remake of the 1960s film, starring Frank Sinatra and the Rat Pack, Ocean's Eleven was directed by Oscar-winning director Steven Soderbergh. Soderbergh returns to direct the hit sequel which reunites Clooney, Pitt and Roberts with Matt Damon, Andy Garcia and Elliott Gould. Catherine Zeta-Jones joins the all-star cast. "It's just a fun, good holiday movie," said Dan Fellman, president of distribution at Warner Bros. However, US critics were less complimentary about the $110m (£57.2m) project, with the Los Angeles Times labelling it a "dispiriting vanity project". A milder review in the New York Times dubbed the sequel "unabashedly trivial".
Fockers fuel festive film chart

Comedy Meet The Fockers topped the festive box office in North America, setting a new record for Christmas Day.

The sequel took $44.7m (£23.2m) between 24 and 26 December, according to studio estimates. It took $19.1m (£9.9m) on Christmas Day alone, the highest takings on that day in box office history. Meet The Fockers is the sequel to Ben Stiller comedy Meet The Parents, also starring Robert De Niro, Blythe Danner, Dustin Hoffman and Barbra Streisand. Despite the success of Meet The Fockers, takings were down 26.5% on 2003's figures - which was blamed on Christmas falling over a weekend this year.

"When Christmas falls on a weekend, it's bad for business," said Paul Dergarabedian, president of Exhibitor Relations, which compiles box office statistics. The weekend's top 12 films took an estimated $121.9m (£63.3m), compared with $165.8m (£86.1m) last year, when the third Lord of the Rings film dominated the box office. Meet The Fockers knocked last week's top film, Lemony Snicket's A Series of Unfortunate Events, down to third place, with $12.5m (£6.5m). Comedy Fat Albert - co-written by Bill Cosby - entered the chart in second place after opening on Christmas Day, taking $12.7m (£6.6m). The Aviator, starring Leonardo DiCaprio as Howard Hughes, took $9.4m after expanding from 40 to 1,796 cinemas on Christmas Day.
DVD review: Spider-Man 2

It's a universal rule that a film can either be a superhero special effects extravaganza or it can be good. But Spider-Man 2 breaks that rule in two.

It's not fantastically deep but you get quickly drawn into the tale of Spidey versus Doc Ock and more so into the fate of poor Peter Parker. Gigantic action set pieces seamlessly work with more brooding personal torment and it all looks stunning. A few effects look false but Tobey Maguire, Kirsten Dunst and Alfred Molina make this compelling. The other universal rule is that DVDs of superhero films will have Making Of features only about the effects. This disc covers those special effects enough but as just one part of a detailed look at the film. Then there are commentaries, trailers and a blooper reel.

Sometimes quality comes in bulk: this set contains no less than 34 John Wayne films ranging from the Westerns and war movies to The Quiet Man.

Now is that a Christmas present or what? Give this to someone on 24 December and you won't see them again until early in the New Year. It's not truly a complete collection and leans more toward Wayne's earlier films: there's no True Grit, for instance, though there is Hellraisers. The films look well transferred to DVD, though none has extras.

It was very daft but it knew it was and somehow this famous 1979 series became a cult favourite that's been long awaited on DVD. This set has the first season of Buck (Gil Gerard) and Wilma's (Erin Gray) tongue-in-cheek adventures and it's all as camp and gaudy as you remember. But it's also a disappointment. The US DVD has this and the more po-faced second season - and you can import it for just about the same price. The bigger omission, though, is that there are no extras. That's particularly disappointing because originally there were meant to be commentaries and stars Gerard and Gray had agreed to do them.
Baby becomes new Oscar favourite

Clint Eastwood's boxing drama Million Dollar Baby has become the new favourite to win best picture at the Oscars on Sunday.

According to pundits, the film has overtaken previous favourite The Aviator, with Eastwood also tipped to take the best director award. Its star Hilary Swank is favourite to win best actress while Jamie Foxx is tipped to win best actor for Ray. Million Dollar Baby has seven nominations while The Aviator has 11. The Aviator has scored a best director nomination for Martin Scorsese, who has never won an Oscar, while stars Leonardo DiCaprio and Cate Blanchett are both nominated for acting Oscars.

"If you look at the Oscars race, The Aviator should be ahead," said awards pundit Tom O'Neil. "It is the most nominated film, and the most nominated movie has won best picture 18 times out of the last 20 years. "But the reality is Million Dollar Baby is the dark horse. People feel emotionally about it and Clint is a beloved Hollywood chum of the Academy voters," he said. Anne Thompson of the Hollywood Reporter said that Million Dollar Baby was "heart-wrenching". "It's very emotional, it even makes grown men cry," she said. "The Aviator is a gorgeous movie, but it's colder."

In the acting categories, Foxx is regarded as almost unbeatable for his performance as Ray Charles in Ray. "The performance is based on a real person who was a showbusiness hero with a handicap, who recently died," O'Neil said. "He has unstoppable momentum among the voters." Hilary Swank is the favourite to win best actress for the second time in six years. She previously won in 1999 for her performance in Boys Don't Cry. In the supporting categories, Cate Blanchett is tipped to win for her performance as Katharine Hepburn in The Aviator, while Morgan Freeman is favourite to take home his first ever Oscar, for Million Dollar Baby. The Oscars will take place at Hollywood's Kodak Theatre on 27 February.
Russian film wins BBC world prize

Russian drama The Return (Vozvrashchenie) has been named winner of the BBC Four World Cinema Award.

The film tells the story of two adolescent boys who are subjected to a harsh regime when their strict father returns after a 10-year absence. Directed by Andrey Zvyagintsev, The Return previously won the 2003 Golden Lion award at the Venice Film Festival. The prize was presented at an awards ceremony held in London on Thursday and hosted by Jonathan Ross. The winner was chosen by a panel which included X Files actress Gillian Anderson, critic Roger Clarke and Touching the Void director Kevin McDonald.

Ross, who is the presenter of BBC One's Film 2005, was also involved in the deliberations. A shortlist of six films from around the world had been drawn up from which the panel chose. Other nominees included the Motorcycle Diaries, Zatoichi and Hero. A viewer poll saw director Zhang Yimou's martial arts epic Hero emerge as the favourite with 32% of votes cast. Tragedy struck the production of The Return when one of the young stars, 15-year-old Vladimir Girin, drowned in a lake where some of the film's scenes were set. The winner of the World Cinema Award last year was the French animated feature Belleville Rendezvous
US TV cuts nudity from BBC film

A US TV network is editing BBC Films' Dirty War to avoid showing the front of a nude woman being scrubbed down after a fictional chemical attack.

It is not worth showing "non-essential" nude scenes when indecency complaints are "aggressively pursued" by US TV watchdogs, said PBS' Jacoba Atlas. Dirty War - screened uncut on BBC One last September - depicts a dirty bomb attack on the City of London. It is also being screened uncut on US cable channel HBO on 24 January. PBS said it will use extra footage for its broadcast, showing the woman "from a more discreet angle" instead.

The US Federal Communications Commission fined CBS $550,000 (£306,814) last autumn for singer Janet Jackson's "wardrobe malfunction", during which her breast was exposed during a dance routine with Justin Timberlake. Many US networks and broadcasters are now more nervous about airing nudity, violence or bad language. Ms Atlas said PBS could put itself financially at risk if it showed the uncut version of Dirty War, and it could also deter many of its 170 individual stations from airing "an important film". "You want to pick your battles," she said. She added that PBS, which is a private, non-profit media enterprise owned and operated by the nation's 349 public television stations, is bolder about screening non-fiction or historical programming. PBS is seen in virtually all US homes with TV, and describes itself as a "trusted community resource" serving nearly 100 million people each week.
Oscars race enters final furlong

The race for the Oscars entered its final stages as the deadline for voters to choose their winners passed.

The 5,808 Academy voters had until Tuesday afternoon to return their ballots - any late submissions will not be included in the count. The next five days will be spent counting the voting forms and preparing the winners' envelopes. Best actor nominee Leonardo DiCaprio is to present a statuette for the first time at the LA ceremony on Sunday.

The 30-year-old actor, who is nominated for playing Howard Hughes in The Aviator, will join other hopefuls such as co-star Cate Blanchett, Natalie Portman and Kate Winslet as Oscar presenters. The only people who will know the Oscar winners before they are revealed at the ceremony will be the auditors who are in charge of looking after the ballot count.

After collating the results, they are responsible for sealing the results in the famous golden envelopes which will be revealed by a host of celebrity presenters at the ceremony. Former Academy Award winners Gwyneth Paltrow, Dustin Hoffman and Halle Berry will also present prizes. The event at the Kodak Theatre will be attended by 3,300 people, including some of the best-known names in film, and organisers say they expect it will be watched on television by one billion people around the world. One current concern is the torrential rain which has lashed Los Angeles for the past week, flooding suburbs and causing mudslides. It is hoped the forecast for Sunday, for cool weather but no rain, will prove accurate. "The last time it rained on Oscars night was in the mid-to-late 1980s," said Oscars communications director John Pavlik. "We have had rain up until the day before the show many times, but for some reason the Oscar gods always shine on Sunday and we hope they will do so again this year," he added.
Cage film's third week at US top

Nicolas Cage movie National Treasure has topped the US and Canada box office for the third week in a row.

National Treasure made $17.1m (£8.8m) in ticket sales from Friday to Sunday, according to studio estimates, taking its total to $110.2m (£56.7m). Comedy Christmas with the Kranks, starring Tim Allen and Jamie Lee Curtis, was in second place. The Polar Express entered in third place while Jude Law film Closer made its debut at number six.

Oliver Stone's big-budget epic Alexander, starring Colin Farrell, followed last week's disappointing sixth-place opening with a slump to seventh place and takings of $4.7m (£2.4m). Critics have savaged the three-hour epic, which reportedly cost $150m (£77m) to make. National Treasure, which sees Cage's character Ben Gates chase a hidden fortune, has been made by Disney Studios. It is Cage's fourth collaboration with Jerry Bruckheimer, who is usually noted for his male-orientated action films.
Oscar nominees gear up for lunch

Leonardo DiCaprio, Jamie Foxx and Hilary Swank are among those due to attend this year's Oscar nominees luncheon on Monday.

They will join more than 100 nominees from the 24 Oscar categories at the annual event, which will take place at the Beverly Hilton hotel, Los Angeles. British hopefuls, including Kate Winslet, Imelda Staunton and Sophie Okonedo are also expected to attend. This year's Oscar ceremony will be held on Sunday 27 February.

Martin Scorsese's The Aviator is leading the field at this year's Oscars with 11 nominations, while other multiple nominees include Million Dollar Baby and Sideways. Oscar nominees Swank and Foxx were among the winners at the Screen Actors Guild awards at the weekend, one of the many ceremonies held in the run-up to the Oscars. Swank won Best Actress for Million Dollar Baby while Foxx triumphed for his performance as Ray Charles in the biopic Ray. Sideways was also among the winners, taking the prize for best cast performance. The next major film award ceremony of the season is the Bafta awards, which take place at London's Odeon Leicester Square on 12 February. Many of those nominated for Oscars including DiCaprio, Foxx and Staunton - an Oscar nominee for her performance in Vera Drake - have also been nominated for Baftas.
Bookmakers back Aviator for Oscar

The Aviator has been tipped by UK bookmakers as the favourite to win the best film award at this year's Oscars.

Ray star Jamie Foxx is clear favourite in the best actor category while Million Dollar Baby's Hilary Swank is tipped to win the best actress prize. Bookmakers predict Cate Blanchett will be named best supporting actress. William Hill and Ladbrokes have given The Aviator 4/9 and 8/13 odds of winning best film, with Million Dollar Baby in second place at 9/4.

Bet Direct and Bet 365 also tip The Aviator, with the majority of bookmakers regarding Finding Neverland as the outsider. The Aviator is also widely tipped to win the best director prize for Martin Scorsese. British star Clive Owen is second favourite at William Hill to take the best supporting actor award, for his performance in Closer. The favourite in that category is Sideways star Thomas Hayden Church. Vera Drake star Imelda Staunton has 5/1 odds of winning the best actress Oscar at Bet 365 and William Hill, ahead of fellow UK star Kate Winslet who has odds of 25/1 at William Hill.

Mike Leigh is the outsider in the best director category for Vera Drake, a position he holds jointly with Ray's Taylor Hackford at bookmakers VC Bet. This year's Academy Awards will be handed out in Hollywood on 27 February. X Factor judge Sharon Osbourne will present Sky television's live coverage of the event. Meanwhile, Clive Owen's best supporting actor nomination has led a bookmaker to shorten his odds of becoming the next James Bond. He has moved from 4/1 to 5/2 favourite to play 007, with Hugh Jackman and Ewan McGregor joint second favourite. "Clive Owen's nomination has sparked a betting frenzy from James Bond fans, who feel that his heightened global recognition will have done his chances of becoming the next Bond a world of good," said William Hill spokesman Rupert Adams.
Global release for Japan hit film

Oscar-winning animator Hayao Miyazaki's latest film, Howl's Moving Castle, is to be released in 50 countries around the world, its distributor has said.

Howl's Moving Castle set a Japanese box office record last week, taking 1.5bn yen (£7.7m) in its first two days. Miyazaki won an Oscar earlier this year for Spirited Away, Japan's first Academy Award for nearly 50 years. Howl's Moving Castle is based on a children's fantasy novel by UK author Diana Wynne Jones. It tells the story of an 18-year-old woman who ages dramatically after falling under a witch's spell. She heads to a moving castle kept by Howl, a wizard, and searches for a way to become normal again. A spokesman for distributor Toho said the film "has received strong interest from domestic audiences and foreign media and viewers alike". "We have a good feeling about this film. We saw very good viewer response," he added. The film's worldwide release will start in South Korea on 24 December, and France on 12 January.
Ocean's Twelve raids box office

Ocean's Twelve, the crime caper sequel starring George Clooney, Brad Pitt and Julia Roberts, has gone straight to number one in the US box office chart.

It took $40.8m (£21m) in weekend ticket sales, according to studio estimates. The sequel follows the master criminals as they try to pull off three major heists across Europe. It knocked last week's number one, National Treasure, into third place. Wesley Snipes' Blade: Trinity was in second, taking $16.1m (£8.4m). Rounding out the top five was animated fable The Polar Express, starring Tom Hanks, and festive comedy Christmas with the Kranks.

Ocean's Twelve box office triumph marks the fourth-biggest opening for a December release in the US, after the three films in the Lord of the Rings trilogy. The sequel narrowly beat its 2001 predecessor, Ocean's Eleven which took $38.1m (£19.8m) on its opening weekend and $184m (£95.8m) in total. A remake of the 1960s film, starring Frank Sinatra and the Rat Pack, Ocean's Eleven was directed by Oscar-winning director Steven Soderbergh. Soderbergh returns to direct the hit sequel which reunites Clooney, Pitt and Roberts with Matt Damon, Andy Garcia and Elliott Gould. Catherine Zeta-Jones joins the all-star cast. "It's just a fun, good holiday movie," said Dan Fellman, president of distribution at Warner Bros. However, US critics were less complimentary about the $110m (£57.2m) project, with the Los Angeles Times labelling it a "dispiriting vanity project". A milder review in the New York Times dubbed the sequel "unabashedly trivial".
Oscar nominee Dan O'Herlihy dies

Irish actor Dan O'Herlihy, who was nominated for best actor at the 1955 Oscars, has died at the age of 85.

O'Herlihy, whose Oscar nomination was for Luis Bunuel's The Adventures of Robinson Crusoe, died at his home in Malibu, California, a spokesman said. The actor began his film career in the 1940s, playing Macduff to Orson Welles' Macbeth in 1948, and was also a regular in on the Dublin stage. He later appeared in Robocop and its sequel and cult TV show Twin Peaks. He played the CEO of Omni Consumer Products in 1987's Robocop and Robocop 2 three years later, and was saw mill owner Andrew Packard in Twin Peaks, also in 1990. Despite his Oscar nomination, he had few other lead roles and became a familiar supporting actor on TV and in film. The year he was nominated, the Academy Award was won by Marlon Brando for On the Waterfront.
Berlin cheers for anti-Nazi film

A German movie about an anti-Nazi resistance heroine has drawn loud applause at Berlin Film Festival.

Sophie Scholl - The Final Days portrays the final days of the member of the White Rose movement. Scholl, 21, was arrested and beheaded with her brother, Hans, in 1943 for distributing leaflets condemning the "abhorrent tyranny" of Adolf Hitler. Director Marc Rothemund said: "I have a feeling of responsibility to keep the legacy of the Scholls going." "We must somehow keep their ideas alive," he added.

The film drew on transcripts of Gestapo interrogations and Scholl's trial preserved in the archive of communist East Germany's secret police. Their discovery was the inspiration behind the film for Rothemund, who worked closely with surviving relatives, including one of Scholl's sisters, to ensure historical accuracy on the film. Scholl and other members of the White Rose resistance group first started distributing anti-Nazi leaflets in the summer of 1942. They were arrested as they dropped leaflets at Munich University calling for a "day of reckoning" with Adolf Hitler's regime. The film focuses on the six days from Scholl's arrest to the intense trial which saw Scholl initially deny the charges and ended with a defiant appearance. It is one of three German films vying for a top prize at the Festival.

A South African film version of Bizet's tragic opera Carmen shot in Cape Town in the Xhosa language has also premiered at the Berlin Festival. The film is entitled U-Carmen eKhayelitsha or Carmen in Khayelitsha after the township in which the story is set. It is performed by a 40-strong music and theatre troupe in their debut film performance. The film is the first South African feature in 25 years and only the second to be nominated for a Golden Bear Award.
Wine comedy wins critics' award

Quirky comedy Sideways was named the best film of the year by the Los Angeles Film Critics Association.

The US movie also picked up four other accolades including best director for Alexander Payne and supporting actor for Thomas Haden Church. British actress Imelda Staunton has again been recognised for her role in Vera Drake, winning best actress, while Liam Neeson won best actor for Kinsey. The awards will be handed out on 13 January at a ceremony in Las Vegas.

Sideways tells the story of two men who take a road trip through California's wine regions and also stars Paul Giamatti. Virginia Madsen was also named best supporting actress for her performance in the film. House of Flying Daggers, directed by Yimou Zhang, was named best foreign language film, while the animation award went to The Incredibles. Unusually, the runners-up in categories were also named with Clint Eastwood's Million Dollar Baby just missing out on the best film award. The best director runner-up was Martin Scorsese for The Aviator. A career achievement award will be handed to veteran actor and comic Jerry Lewis at the ceremony next year.
Actor Foxx sees Globe nominations

US actor Jamie Foxx has been given two nominations for Golden Globe awards, with Meryl Streep, Morgan Freeman and Cate Blanchett also up for prizes.

The stars were shortlisted on Monday for supporting roles, with the main nominations still to come. Foxx has starred in Collateral and Ray. Clive Owen, David Carradine and Natalie Portman are also up for awards. The Golden Globes, Hollywood's second most prominent awards, are the first major nominations to be announced. Last year, The Lord Of the Rings: The Return Of the King was named best drama movie while Lost In Translation won best musical or comedy. Sean Penn, Charlize Theron, Tim Robbins and Renee Zellweger all won acting awards - mirroring the eventual Oscars outcome. The Golden Globes ceremony will take place on 16 January, with the Oscars following on 27 February.
Godzilla gets Hollywood fame star

Movie monster Godzilla has received a star on Hollywood's Walk of Fame, honouring both his 50th birthday and the launch of his 28th film.

An actor dressed as the giant creature breathed smoke over photographers on Monday as Godzilla received the 2,271st star on Hollywood Boulevard. "Godzilla should thank you for this historical and monumental star," said Final Wars producer Shogo Tomiyama. "But unfortunately, he cannot speak English," he added. Hollywood's honorary mayor, Johnny Grant, said: "I do hereby proclaim this Godzilla Day in Hollywood.

"He's loose, he's wild, and I'm getting the hell out of here," he added. The premiere of Godzilla: Final Wars at Grauman's Chinese Theatre followed the ceremony on Hollywood Boulevard. The monster was joined by co-stars including Japanese pop star and actor Masahiro Matsuoka. Director Ryuhei Kitamura said it may not be Godzilla's final outing, as it has been billed. "That's what the producers say. But the producer's a liar," he said. "[Godzilla's] been working for the last 50 years. So, I think Godzilla just deserves a vacation." And producer Shogo Tomiyama added: "So long as Godzilla can fascinate people, I believe he will be resurrected by new generations of filmmakers in the future." Godzilla first appeared in 1954 as a prehistoric lizard woken by atomic bomb tests.
Singer's film to show at festival

A documentary which takes a candid look at the life of chart-topping singer George Michael will be shown at this year's Berlin Film Festival.

A Different Story will screen in the Panorama section of the festival, which runs from 10-20 February. It features the singer talking about both his career and his personal life, from his days in Wham! through to more recent events. Michael will attend the festival to introduce the screening on 16 February. Director Southan Morris and executive producer Andy Stephens will also attend the festival.

The 93 minute film will see Michael discussing his early days in Wham! along with his later career, including his legal battles with record label Sony and his stance against the Iraq war and American politics. It will also touch upon his turbulent personal life, including his arrest in a Beverly Hills park toilet in 1998 for "lewd behaviour", and the death of his boyfriend Anselmo Feleppa from Aids. The film, which includes previously unseen footage of the singer also features contributions from Michael's former Wham! partner Andrew Ridgeley, as well as ex-Wham! backing singers Pepsi and Shirlie. Other contributors include Sting, Mariah Carey, Elton John, Noel Gallagher, Geri Halliwell and Simon Cowell. This year's festival will open with Man To Man, a historical epic starring Joseph Fiennes and Kristin Scott-Thomas. It will be one of 21 films competing for the festival's top prize, the Golden Bear. Other films in competition will include The Life Aquatic, a quirky comedy starring Bill Murray, and the biopic Kinsey, which features Liam Neeson. The full programme will be announced on 1 February.
Surprise win for anti-Bush film

Michael Moore's anti-Bush documentary Fahrenheit 9/11 has won best film at the US People's Choice Awards, voted for by the US public.

Mel Gibson's The Passion of the Christ won best drama, despite both films being snubbed so far at US film awards in the run-up to February's Oscars. Julia Roberts won her 10th consecutive crown as favourite female movie star. Johnny Depp was favourite male movie star and Renee Zellweger was favourite leading lady at Sunday's awards in LA.

Film sequel Shrek 2 took three prizes - voted top animated movie, top film comedy and top sequel. In television categories, Desperate Housewives was named top new drama and Joey, starring former Friends actor Matt LeBlanc, was best new comedy. Long-running shows Will and Grace and CSI: Crime Scene Investigation were named best TV comedy and TV drama respectively.

Nominees for the People's Choice Awards were picked by a 6,000-strong Entertainment Weekly magazine panel, and winners were subsequently chosen by 21 million online voters. Fahrenheit 9/11 director Michael Moore dedicated his trophy to soldiers in Iraq. His film was highly critical of President George W Bush and the US-led invasion of Iraq, and Moore was an outspoken Bush critic in the 2004 presidential campaign inwhich Democratic challenger John Kerry lost.

"This country is still all of ours, not right or left or Democrat or Republican," Moore told the audience at the ceremony in Pasadena, California. Moore said it was "an historic occasion" that the 31-year-old awards ceremony would name a documentary its best film. Unlike many other film-makers, Passion of the Christ director Mel Gibson has vowed not to campaign for an Oscar for his movie. "To me, really, this is the ultimate goal because one doesn't make work for the elite," Gibson said backstage at the event. "To me, the people have spoken."
Da Vinci film to star Tom Hanks

Actor Tom Hanks and director Ron Howard are reuniting for The Da Vinci Code, an adaptation of the international best-selling novel by Dan Brown.

Distributor Sony Pictures said production will begin next year, with a planned release in May 2006. Hanks will play Robert Langdon, who is trying to solve the murder of a member of an ancient society that has protected dark secrets for centuries. It will be Hanks' third collaboration with Howard. They previously worked together, along with Howard's producing partner Brian Grazer, on Splash and Apollo 13.

Hanks is one of Hollywood's most bankable stars, with his presence in a movie almost guaranteeing box office success. Brown's book has become a publishing phenomenon, consistently topping book charts in the UK and US. It has sold more than eight million copies worldwide in little over two years. It is a classic whodunit, which centres on a global conspiracy surrounding the Holy Grail mythology and places heavy emphasis on symbols and cryptography. Its protagonist is a Harvard professor likened to a contemporary Indiana Jones, who also appeared in Brown's first book Angels and Demons. The tale mixes art history with mythology, semiotics with medieval history.
Controversial film tops festival

A controversial film starring Hollywood actor Kevin Bacon as a convicted paedophile won top honours at the London Film Festival on Thursday.

The Woodsman won the Satyajit Ray Award, named after the Indian director. The low-budget film, directed by Nicole Kassell, is about a convicted child molester trying to rebuild his life after 12 years in jail. Judges said the film tackled the contentious subject with "great insight and sensitivity". Previous films to take the prize include the Oscar-winning Boys Don't Cry, which was about the true life story of murdered transsexual Brandon Teena.

British writer-director Amma Asante won the UK Film Talent Award this year for her debut feature A Way Of Life. Set in South Wales, the film is about a teenage single mother who becomes embroiled in a tense stand-off with a Turkish neighbour. Also on Thursday night, the Fipresci International Critics Awards went to Aaltra, a Belgian film about the handicapped; and the Sutherland Trophy, which was won by Jonathan Caouette for his film Tarnation. The festival closed with a screening of the film I Heart Huckabees, starring Jude Law and Dustin Hoffman and directed by Three Kings film-maker David O Russell. The festival this year also included the first European screening of the new Pixar animation The Incredibles, and the British film Bullet Boy, starring So Solid Crew rapper Asher D.
Fockers retain film chart crown

Comedy Meet The Fockers has held on to the number one spot at the North American box office for a second week.

It took $42.8m (£23.7m) at the weekend, making its overall takings more than $163m (£90m) in 12 days, according to studio estimates. It took $19.1m (£9.9m) on Christmas Day alone, the highest takings on that day in box office history. The sequel to the Ben Stiller comedy Meet The Parents stars Robert De Niro, Dustin Hoffman and Barbra Streisand. The success of Meet the Fockers could help produce record box office revenue for 2004, said Paul Dergarabedian, president of the industry's tracker Exhibitor Relations. "We've had a much stronger than anticipated final week of the year that helped the industry end on a high note," said Mr Dergarabedian.

Meet the Fockers also broke the box office records for the most money taken on New Year's Eve, when it made $12.2m (£6.2m), and New Year's Day, when it took $18m (£9.4m). The previous New Year's Eve record was set in 2000 by Cast Away with $8.5m (£4.5m). The Lord of the Rings: The Return of the King had held the New Year's Day title with $12.8m (£6.7m). However, Christmas takings were down 26.5% on 2003's figures - which was blamed on Christmas falling over a weekend this year. This weekend's top 12 films took an estimated $125.4m (£65.8m), a 4.3% increase on the same weekend last year. But there were no major releases last week to provide competition to Meet the Fockers or Lemony Snicket's A Series of Unfortunate Events, which finished in second place with $14.7m (£7.7m). The Aviator, starring Leonardo DiCaprio as Howard Hughes, ended up in third position after taking $11.2m (£5.9m). Comedy Fat Albert - co-written by Bill Cosby - moved down the chart to fourth place after taking $10.7m (£5.6m).
Sundance to honour foreign films

International films will be given the same prominence as US films at next year's Sundance Film Festival, with movies dominated by the theme of war.

The independent film festival will feature two new international cinema competitions, during its 20-30 January season in Utah. Forty-two films will debut at Sundance, including The Liberace of Baghdad by British director Sean McAllister. The prestigious festival was founded by actor Robert Redford in 1981.

"We have always had an international component, but from next year they will enter a jury competition," festival director Geoffrey Gilmore said. "We wanted to give world cinema more emphasis and have now put it on par with the American dramatic and documentary competitions." Twelve films competing in the new world cinema documentary category focus on countries and people under siege.

The Liberace of Baghdad features an Iraqi pianist hiding in a hotel as he waits for a visa, while Finnish film The Three Rooms of Melancholia looks at the war in Chechnya. Shake Hands With The Devil: The Journey of Romeo Dallaire tells of a UN mission to Rwanda during the 1994 genocide, while French-Israeli production Wall looks at Israel's controversial security wall separating it from the Palestinian territories. The 16 films competing in the new world cinema dramatic category include works from Germany, South Korea, Angola, China, Denmark and Australia.

Several Hollywood stars feature in the festival's American independent drama category, including Keanu Reeves and Benjamin Bratt. Vince Vaughn stars in quirky movie Thumbsucker while 21 Grams actress Naomi Watts plays a budding Hollywood actress in Ellie Parker. The top Grand Jury prize at this year's festival went to low budget sci-fi thriller Primer, written and directed by Shane Carruth. Morgan Spurlock earned the directing award for Super Size Me, which became an international box office hit.
Day-Lewis set for Berlin honour

Actor Daniel Day-Lewis is to be presented with an award for his career in film at the Berlin Film Festival.

The 47-year-old, whose credits include his Oscar-winning performance in My Left Foot, will be presented with the Berlinale Camera award on 15 February. The honour, awarded since 1986, honours figures in cinema that the festival feels "particularly indebted to". Man to Man, a historical epic starring Kristin Scott Thomas, opens the German festival on 10 February. A candid documentary about the life and career of singer George Michael, A Different Story will also be screened at the 10-day event. '

Day-Lewis has competed four times at the Berlin Film Festival, with films In The Name Of The Father (1994), The Crucible (1997), The Boxer (1998) and Martin Scorsese's Gangs Of New York (2003). The festival praises him for his "sensational start" with roles in My Beautiful Launderette and costume classic A Room With A View, and a "great number of celebrated roles" in subsequent productions. Japan's oldest film studio will also be honoured along with Day-Lewis. Shochiku film studios, which was founded 110 years ago, will become the first cinematic institution to receive the Berlinale Camera award. Famous Japanese directors including Akira Hurosawa have had films produced at the studio.
Glasgow hosts tsunami benefit gig

The top names in Scottish music are taking part in a benefit concert in aid of the victims of the Asian tsunami.

All 10,000 tickets for Saturday's concert, featuring Franz Ferdinand, Belle and Sebastian and Travis, at Glasgow's SECC sold out in 36 hours. Mull Historical Society, Deacon Blue, Idlewild, Texas, Mogwai and Teenage Fanclub are among the other acts performing at the concert. Organisers hope to raise at least £250,000 from the show.

It follows a Cardiff gig starring Eric Clapton, Keane and Jools Holland, which raised more than £1.25m. And it is taking place on the same night as a tsunami benefit show in Bristol, which will see Massive Attack and Portishead share a stage for the first time. Colin MacIntyre, of Mull Historical Society, was playing another gig on the same day but said he was determined to make the Glasgow benefit. He said: "I think we were all affected by seeing the reports coming from the Far East. "We all know somebody who was there, but more than that it was that we had never seen a wave of destruction, a natural disaster, like this in my generation. "I'm lucky as an artist to be able to perform at something like this."
Pop band Busted to 'take a break'

Chart-topping pop band Busted have confirmed that they plan to "take a break", following rumours that they were on the verge of splitting.

A statement from the band's record company Universal said frontman Charlie Simpson planned to spend some time working with his other band, Fightstar. However they said that Busted would "reconvene in due course". The band have had eight top three hits, including four number ones, since they first hit the charts in 2002. Their singles include What I Go To School For, Year 3000, Crashed The Wedding, You Said No, and Who's David?

The band, which also includes members Matt Jay and James Bourne, made the top ten with their self-titled debut album, as well as the follow-up, A Present For Everyone, in 2003. They won best pop act and best breakthrough act at the 2004 Brit Awards and were nominated for best British group. Most recently they topped the charts with the theme from the live-action film version of Thunderbirds, which was voted Record Of The Year on the ITV1 show. The band have capitalised on a craze for artists playing catchy pop music with rock overtones. The trio are seen as an alternative to more manufactured artists who are not considered credible musicians because they do not write their own songs or play their own instruments. However, recent rumours have suggested that Simpson has been wanting to quit the band to focus on Fightstar. He now plans to take Fightstar on tour.
Streets have 'album of the year'

The Streets, aka British rapper and songwriter, Mike Skinner have topped a poll to find the year's best album.

A Grand Don't Come for Free beat Keane's Hope and Fears in second place with Franz Ferdinand's self-titled album third, in the Q magazine poll. Skinner uses blunt beats under streetwise lyrics about such things as falling in love and drink and drugs. Q Magazine said: "A Grand Don't Come for Free captured the country's mood in a way no one could have predicted." A Grand Don't Come for Free is the second album from The Streets. It followed Original Pirate Material. Q Magazine also had praise for the runners-up in the poll. Keane's Hopes and Fears, was described as a "revelatory debut" which showed "they had songwriting flair to spare". It also said Franz Ferdinand's album sounded "natural, unforced (and) under-produced". Rock band U2's latest album How to Dismantle an Atomic Bomb came fourth while Razorlight's Up All Night was in fifth place. Others notables on the list included Dizzee Rascal in at number 12 and The Zutons at 20. Estelle came in at 39, Joss Stone was 40th and Jamelia took the 44th place.
Manics in charge of BBC 6 Music

The Manic Street Preachers are to take over the helm of BBC digital radio station 6 Music for a week in December.

The Welsh band, whose hits include Design For Life and If You Tolerate This, have already chosen which records to play between 6 and 12 December. Their albums of the day include Who's Next by The Who and U2's Joshua Tree. The group will also perform their own live session. They follow in the footsteps of Radiohead, who took over the station for a week last year.

Bass player Nicky Wire will join Phil Jupitus on his morning show on Monday 6 December, while vocalist and guitarist James Dean Bradfield will appear on Andrew Collins' afternoon show on Thursday 9. The group have also chosen documentaries to air, such as The Leonard Cohen Story and Guitar Greats - Jimmy Page. The live concert session tracks they have picked include The Specials' Rat Race recorded at Hammersmith Odeon in London and Public Enemy's Fight The Power and Rebel Without A Pause. The band will also answer questions e-mailed in by 6 Music listeners.
Band Aid retains number one spot

The charity single by Band Aid 20 has held on the chart top spot for a second week, strengthening its chances of becoming the Christmas number one.

Do They Know It's Christmas, featuring artists including Chris Martin and Jamelia, held off Kylie Minogue to remain the week's biggest single. Next week's chart will reveal who will have the festive chart-topper Minogue's latest release I Believe in You went in at number two, pushing down Ice Cube's You Can Do It to three. Destiny's Child also slipped one place to four with Lose My Breath, followed by Girls Aloud at five with the Children in Need record I'll Stand By You.

The only other new entry in the top 10 came from Robbie Williams track Misunderstood, a new track written for his Greatest Hits album. There were no new releases in the entire top 40 album charts as record companies put out all the big releases early hoping to cash in on the lucrative Christmas market. U2's How to Dismantle a Bomb remains at number one for a third week in a row, followed by Williams' Greatest Hits. Opera band Il Divo have moved up one place with their eponymous album to number three. Maroon 5's album Songs About Jane has moved up to number seven despite being released 47 weeks ago. And the Abba Gold greatest hits album has crept back into the top 40 more than nine years after it was first released.
Rap boss arrested over drug find

Rap mogul Marion "Suge" Knight has been arrested for violating his parole after he was allegedly found with marijuana.

He was arrested in Barstow, California, on Saturday following an alleged traffic offence. He is expected to be transferred to a state prison while a decision is made on whether he should be released. Mr Knight, founder of Death Row Records, served a 10-month jail term in 2004 for punching a man while on parole for an assault conviction. Police said Mr Knight was stopped on Saturday after performing an illegal U-turn and a search of his car allegedly found marijuana.

He is also accused of not having insurance. A 18-year-old woman in the car was arrested for providing false information and having a fake ID card. She was later released. It was his second alleged violation, having previously served half of a nine-year sentence for breaking the terms of his parole. Mr Knight, 39, was jailed in October 1996 following his involvement in a fight with a rival gang just hours before rapper Tupac Shakur was killed in a Las Vegas drive-by shooting. He was driving Shakur's car at the time and was shot in the head. At the time he was on probation for assaulting two musicians. Mr Knight, a former bodyguard, set up Death Row records in the early 1990s with Shakur and Dr Dre among his protegees. But the label has always been dogged by allegations it supports gang culture and fuels the east and west coast rap rivalry.
Elton plays Paris charity concert

Sir Elton John has performed at a special concert in Paris to raise money for the victims of the Asian tsunami.

The British singer played to a 2,700-strong audience on Sunday at the French capital's Bastille opera house. The concert was also part of an attempt to bring a broader range of events to the famous venue. Money raised will go to the Fondation pour l'Enfance (Foundation for Childhood) which aims to rebuild a children's shelter in Sri Lanka. Sir Elton played hits from his vast back catalogue to a sell-out crowd which included former French president Valery Giscard d'Estaing and his wife Anne-Aymone. The veteran pop star played piano accompaniment throughout the concert which lasted for three hours without an interval.

He told the crowd: "Throughout the years, I've done a lot of drugs and alcohol. It's true that I was a nightmare, impossible. For the last 14 years I've been normal. Now my drug is called David" - a reference to David Furnish, his partner. The crowd, who greeted each song with a standing ovation, also included French singer Charles Aznavour and British ambassador Sir John Holmes. Sir Elton has also teamed up with Phil Collins to record a version of Eric Clapton's 1991 hit Tears In Heaven to raise money for the relief fund. A release date has yet to be set for the recording, which was organised by Sharon Osbourne.
Elvis set to top UK singles chart

Rock 'n' roll legend Elvis is set to top the UK singles chart on Sunday, 27 years after his death.

The re-release of hit song Jailhouse Rock was out-selling X Factor winner Steve Brockstein's cover of Against All Odds by 2,000 copies on Tuesday. If the record does make the top spot, it will be Elvis' 19th UK number one. The last time he topped the charts was with the remix of the little-known song A Little Less Conversation, which was number one in June 2002. If Jailhouse Rock does reach number one on Sunday, it will be the 999th in the history of the UK pop charts. The song first topped the charts in 1958. Chart analysts say Elvis could score the 1000th number one as well. His record One Night will be released the following week, followed the week after by A Fool Such As I, as part of his record company SonyBMG's new Elvis campaign. It has called it "the most ambitious singles release campaign in the history of the UK record industry".
Wal-Mart is sued over rude lyrics

The parents of a 13-year-old girl are suing US supermarket giant Wal-Mart over a CD by rock group Evanescence that contains swear words.

The lawsuit, filed in Washington County, alleges Wal-Mart deceived customers by not putting warning labels on the cover. Trevin Skeens alleges Wal-Mart knew of the offending word because it had censored it on its music sales website. Wal-Mart said it was investigating the claims but had no plans to pull the CD. Wal-Mart has a policy of not stocking CDs which carry parental advisory labels. Mr Skeens said he bought the Anywhere But Home CD for his daughter and was shocked to hear the swearing when it was played in their car.

"I don't want any other families to get this, expecting it to be clean. It needs to be removed from the shelves to prevent other children from hearing it," said Mr Skeens of Brownsville. The lawsuit seeks to force Wal-Mart to censor the music or remove it from its stores in Maryland. It also seeks damages of up to $74,500 (£38,660) for every customer who bought the CD at Maryland Wal-Marts, and also naming record label Wind-Up Records and distributor BMG Entertainment in the legal action. "While Wal-Mart sets high standards, it would not be possible to eliminate every image, word or topic that an individual might find objectionable," Wal-Mart spokesman Guy Whitcomb told the Herald-Mail of Hagerstown.
Pete Doherty misses bail deadline

Singer Pete Doherty will have to spend the weekend in jail because he could not come up with £150,000 bond money for his bail on time.

The former Libertines singer had been granted bail with curfew restrictions at Highbury Corner Magistrates Court on charges of robbery and blackmail. But his lawyer said the money could not be raised on time. Mr Doherty, 25, was arrested following an alleged incident in a London hotel on Wednesday evening. Musician Alan Wass, 23, also of north London, appeared in court accused of the same offences.

Magistrates imposed a range of bail conditions on Mr Doherty including a curfew between 2200 and 0700, except when he attends a drug rehabilitation centre. He was told he would not be able to leave his home without being accompanied by a security firm. He must also surrender his passport and report daily to a local police station. Mr Wass was also given a curfew and told to surrender his passport. Mr Doherty left The Libertines at the end of June 2004, but continued performing with his band Babyshambles. The singer, who has been linked to supermodel Kate Moss, was arrested after police were called to the Islington hotel in response to claims that a man had been assaulted. A man in his 30s was later taken to University College Hospital, London, with facial injuries, before being discharged. A lawyer representing Mr Doherty and Mr Wass said outside court the pair strenuously denied the charges.
Rapper Snoop Dogg sued for 'rape'

US rapper Snoop Dogg has been sued for $25m (£13m) by a make-up artist who claimed he and his entourage drugged and raped her two years ago.

The woman said she was assaulted after a recording of the Jimmy Kimmel Live TV show on the ABC network in 2003. The rapper's spokesman said the allegations were "untrue" and the woman was "misusing the legal system as a means of extracting financial gain". ABC said the claims had "no merit". The star has not been charged by police.

The lawsuit, filed in Los Angeles on Friday, says the woman's champagne was spiked and she was then assaulted. The rapper's spokesperson said: "Snoop will have the opportunity to prove in a court of law that [the alleged victim] is opportunistic and deceitful. "We are confident that in this case, [the alleged victim's] claims against Snoop Dogg will be rejected." The lawsuit names Snoop Dogg - real name Calvin Broadus - plus three associates, The Walt Disney Company and its parent company ABC Inc.

The woman waited two years to sue because she was trying to negotiate a settlement with the media companies, her lawyer, Perry Wander, said. Disney and ABC "failed to provide a safe working environment for my client," he said. The legal action comes after the rap star sued a woman who claimed they tried to blackmail him to keep quiet about an alleged assault. The 32-year-old rapper has enjoyed six US top 10 albums since bursting onto the music scene with hit songs like What's My Name? and Gin and Juice in 1993.
Legendary music studio to close

The New York music studio where John Lennon spent his final hours is to close next month.

The Hit Factory, which opened 37 years ago, has played host to some of the biggest stars in music, including Paul Simon, Madonna and David Bowie. However, the rise in digital recording has affected business at the studio, which is relocating to smaller premises in Miami. Lennon recorded his final album Double Fantasy at the studio in 1979.

The studio was founded by Jerry Ragovoy in 1968. In 1975 it was sold to fellow producer Edward Germano, who turned it into a 100,000 square foot studio with seven recording rooms and live mastering suites. His first client was Stevie Wonder, who recorded part of his classic album Songs In The Key Of Life there. Other well-known albums to be recorded or partially recorded at the studio include Bruce Springsteen's Born In The USA, the Rolling Stones' Emotional Rescue and Paul Simon's Graceland. Michael Jackson, Billy Joel, Jay-Z and Beyonce are also among artists who have used the Hit Factory in the past, as well as 50 Cent who survived an attempt on his life as he left the premises in 2000. The studio made history in 1994 when it won a record 41 Grammy nominations for songs recorded, mastered or mixed there, including the soundtrack to the Whitney Houston film The Bodyguard.
Rapper Jay-Z becomes label boss

Rap star Jay-Z is to become a record company executive after being put in charge of one of hip-hop's most influential labels, Def Jam.

Jay-Z, who said he would make no more music after 2003's The Black Album, will become the company's president and chief executive from January. Def Jam's parent company, Universal, made the appointment after buying Jay-Z's Roc-A-Fella label. Def Jam's artists include LL Cool J, DMX, Ludacris, Ja Rule and Ashanti. Jay-Z will continue to run Roc-A-Fella, which he founded with Damon Dash in 1995 and has Kanye West and Beanie Sigel on its roster. Universal said on Wednesday it had bought the 50% of Roc-A-Fella it did not already own.

Antonio "LA" Reid, chairman of The Island Def Jam Music Group, said: "I can think of no-one more relevant and credible in the hip-hop community to build upon Def Jam's fantastic legacy." He hoped Jay-Z would "move the company into its next groundbreaking era", he added. Jay-Z, real name Shawn Carter, said: "I have inherited two of the most important brands in hip-hop, Def Jam and Roc-A-Fella.

"I feel this is a giant step for me and the entire artist community." One of the most successful and respected rap stars of the last eight years, Jay-Z's hits have included Hard Knock Life, Dirt Off Your Shoulder and 03 Bonnie and Clyde with his girlfriend Beyonce Knowles. He said he would retire after The Black Album, but has just released an album and been on an ill-fated tour with R Kelly. Def Jam was founded in 1984 by Russell Simmons and producer Rick Rubin and signed artists including Run-DMC, The Beastie Boys and Public Enemy.
REM concerts blighted by illness

US rock band REM have been forced to cancel concerts after bass player Mike Mills was taken to hospital suffering from "severe flu-like symptoms".

The band were forced to cut short Monday night's show in Sheffield, and have cancelled Tuesday's Glasgow date. Mills could "hardly stand up, let alone play", said an REM spokesman, who added he is now "resting" in hospital. The remainder of the band played a short acoustic set on Monday. Tuesday's gig has been rescheduled for 15 June. Those who had a ticket for the show in Glasgow are being advised to retain their ticket stub so they can attend the new date. The band's spokesman said that they would review their remaining dates on a "day-to-day basis", based on doctors' advice to Mills. "Obviously we all want Mike to get better, and clearly we all want to play the shows. Rest assured we will do so as soon as possible," he said.

The band were still hopeful they would be able to make their Wednesday date, added the spokesman. REM played accoustic versions of their hits Losing My Religion, I've Been High, Leaving New York and The One I Love to the Sheffield Arena audience on Monday. The band had originally been scheduled to play four dates in the UK as part of a world tour. In 1995 former drummer Bill Berry collapsed in Switzerland while the band was on tour, having suffered a ruptured aneurysm. He made a full recovery, only to leave the band two years later.
Ring of Fire hit co-writer dies

Merle Kilgore, co-writer of the country hit Ring of Fire, has died of congestive heart failure aged 70.

He started out as a singer and songwriter before going into music management, looking after country star Hank Williams Jr. He wrote Ring of Fire with June Carter Cash, the future wife of Johnny Cash who went on to score his most popular hit with the track. Kilgore had heart surgery in 2004 and was also diagnosed with lung cancer. His death has been attributed to treatment he was undergoing for the cancer. His first self-penned top 10 hit was Dear Mama in 1959.

One of the first songs he wrote for other artists was Wolverton Mountain, which sold 10 million copies when recorded by Claude King. He then wrote Ring of Fire with June Carter Cash, which was about her unrequited love for Johnny, who she later married. It was first recorded by her younger sister Anita Carter before Johnny went on to make such a success of it. June Carter Cash previously said it upset her husband when Kilgore talked about the song without crediting her and believed he should not have been credited on it. Last year, Kilgore turned up an awards dinner in a wheelchair expecting to honour Hank Williams Jr, but instead he was the surprise recipient of a lifetime achievement award from the International Entertainment Buyers Association.
Belle named 'best Scottish band'

Belle & Sebastian have been named the best Scottish band of all time after a three month-long public poll.

The group beat Travis and Idlewild into second and third place respectively. Franz Ferdinand, who recently picked up five Brit Award nominations, ended up in 15th place, while the Eurythmics wound up at a lowly 38. Other Scottish acts, such as the Mull Historical Society who also featured in the top 50, performed at a party in Glasgow where the result was announced. Scottish-based band Snow Patrol, who finished 14th in the vote and have been nominated for a pair of Brit Awards, were among the performers who covered well-known Scottish pop songs at the party on Wednesday night.

Indie stalwarts Belle & Sebastian have enjoyed a chart career stretching back to 1997. They were the surprise winners of the Brit Award for best breakthrough act two years later. Scottish bands from earlier musical eras also made it into the final list, including 1970s tartan boy band the Bay City Rollers and goth favourites the Jesus and Mary Chain.

Scottish magazine The List recently compiled a list of the top 50 Scottish bands of all time, but left the final decision to the public. The magazine's music editor Mark Robertson said: "The idea behind the project was simple - to rediscover the very best of Scottish music, from the finest musical talent spanning from the age of 70s rock through to 80s pop, right up to today's international stars." "Everyone has strong opinions about this and we wanted to open it up to the public to decide," he added. BBC Radio Scotland presenter Vic Galloway, who has been involved in the project, said it had been "great fun" to look back at Scotland's musical heritage and take note of up-and-coming Scottish acts.
Label withdraws McFadden's video

The new video of former Westlife singer Brian McFadden has been pulled after a Dublin school complained about being associated with his song Irish Son.

St Fintian's High School says it is clearly identified in the video, while McFadden never went there. McFadden makes claims that he was beaten at his own school in the song's lyrics, saying it had "cell blocks". The performer's record label Sony BMG has withdrawn the video and issued replacements to television stations. The label believed the school name was fictitious until they received the complaint. They have said the reference to the school was unintentional and coincidental.

The head of Christian Brothers' school St Fintian's, Richard Fogarty, said the video implied that the 24-year-old pop star had attended his school and was abused there. "The school has always treated its pupils with respect," Mr Fogarty said in a statement. McFadden makes specific references to the Christian Brothers in his song, but did not attend St Fintian's. Corporal punishment was outlawed in Irish schools in 1982 when McFadden was two years old.

McFadden, whose debut solo album is released next week, has said that every song is autobiographical and "a true story". Alcoholism and domestic violence are among the other topics dealt with in his songs, half of which have been written with Robbie Williams' former collaborator, Guy Chambers. McFadden, who quit chart-topping group Westlife in March, went to number one in September with his first solo single Real To Me. He enjoyed 12 chart-toppers with the boy band before parting company with them.
Byrds producer Melcher dies at 62

Record producer Terry Melcher, who was behind hits by the Byrds, Ry Cooder and the Beach Boys, has died aged 62.

The son of actress Doris Day, he helped write Kokomo for the Beach Boys, which was used in the movie Cocktail, earning a 1988 Golden Globe nomination. He also produced Mr Tambourine Man for the Byrds, as well as other his such as Turn, Turn Turn. Melcher died on Friday night at his home in Beverly Hills, California, after a long battle with skin cancer. He joined Columbia Records as a producer in the mid-1960s, and also worked with Gram Parsons and the Mamas and the Papas.

Earlier in his career, Melcher had hits as part of duo called Bruce & Terry, with future Beach Boy Bruce Johnston, which evolved into the Rip Chords group. Melcher also worked closely with his mother, producing The Doris Day Show and helping to run her charitable activities. In 1969 his name became linked with the Charles Manson murders, which saw the deaths of actress Sharon Tate and four of her friends at a home which Melcher once rented. Rumours circulated that Melcher - who knew Manson - was the killer's real target, because he had turned him down for a record contract. But Los Angeles police discounted the rumours, pointing out Melcher had moved to Malibu, and Manson knew of his new address.
Snow Patrol feted at Irish awards

Snow Patrol were the big winners in Ireland's top music honours, the Meteor Awards, picking up accolades for best Irish band and album on Thursday.

The Belfast-born, Glasgow-based band collected the prizes at the ceremony at Dublin's Point Theatre. Westlife won the award for best Irish pop act, voted for by the public, beating former member Brian McFadden. Franz Ferdinand picked up best international band and album while Paddy Casey collected best Irish male. Singer-songwriter Casey beat Brian McFadden and Damien Rice. Juliette Turner was named best Irish female.

In the international categories, Morrissey beat Eminem, Usher and Robbie Williams to best male while PJ Harvey pipped Kylie Minogue, Joss Stone, Anastacia and Natasha Bedingfield to the female crown. The 8,000 fans at the ceremony were treated to performances from US rapper Snoop Dogg, Brian McFadden with Delta Goodrem and The Thrills featuring Rolling Stones star Ronnie Wood. Snow Patrol's success came after a year in which they made a chart breakthrough with their third album Final Straw. "I think a lot of bands should go through a wee bit of a kicking before the make a success," singer Gary Lightbody and drummer Jonny Quinn said. "It has been good for us, but also hard for us over the past six years." Snow Patrol will support U2 on their European tour later this year - but U2 were not nominated for best Irish band and album.
Doves soar to UK album summit

Manchester rock band Doves have entered the UK album chart at number one with their new release, Some Cities.

The trio replace flamboyant US act Scissor Sisters at the top. The album follows single Black and White Town, which reached number six. R&B star Nelly has the new number one single with Over and Over, which sees him team up with Tim McGraw. Girls Aloud, Akon and Kaiser Chiefs all have new singles in the top ten, as do Futureheads and Usher.

The latest Elvis Presley re-release, (Marie's The Name) His Latest Flame, entered the chart at number three, one place ahead of Girls Aloud's Wake Me Up. Hip-hop performer Akon's Locked Up is at number five, while hotly-tipped Leeds band Kaiser Chiefs have their second chart hit at number six with Oh My God.

Futureheads' cover of Kate Bush's Hounds of Love entered the chart at number eight, while Usher's Caught Up was a new entry at number nine. In the album chart, operatic quartet Il Divo's eponymous debut rose 23 places to number six, while crooner Tony Christie's Definitive Collection is a new entry at number 10, making it the highest-charting album of the singer's career.
Top gig award for Scissor Sisters

New York band Scissor Sisters have won a gig of the year award for their performance at this year's V Festival.

The award was voted for by listeners of Virgin Radio, which compiled a top 10 which was mostly dominated by newcomers on the music scene this year. The quirky disco-rock band beat The Red Hot Chili Peppers who came second for their Hyde Park performance in June. Virgin Radio DJ Pete Mitchell said: "This year has seen an amazing array of talent come into the mainstream." He added: "The Scissor Sisters are one of the most original, eccentric bands to come through and it's no surprise the British public are lapping up their performances." Newcomers Keane came in third place for their August gig at the V Festival, followed by Maroon 5 and Snow Patrol.

Music veterans The Who and David Bowie, both earned places on the list, at number eight and 10 respectively. At number seven was Oxfam's Make Fair Trade gig at London's Hammersmith Apollo in October, which featured performances by REM, Razorlight and Coldplay's Chris Martin. Glasgow's Franz Ferdinand earned a place at number nine for their home-town performance in April. The annual survey was voted for by nearly 4,000 listeners.
Brits return Keane to number one

Brits success has helped return Keane's award-winning album Hopes and Fears back to the top of the UK album chart.

The debut album, which took the best British album title at the Brits on Tuesday, moved up seven places from number eight to number one. Also capitalising on Brits success were the Scissor Sisters whose eponymous album moved three places to number two. U2's latest single Sometimes You Can't Make It On Your Own took the top spot in the singles chart, ahead of Elvis. The track, from their current album How To Dismantle An Atomic Bomb, pushed Eminem's Like Toy Soldiers from number one to number three.

Elvis' Wooden Heart, which entered the chart at number two, is the sixth in a series of 18 reissues to mark the 70th anniversary of Presley's birth. There are currently six re-released Elvis' tracks occupying spots in the top 40 singles chart including Are You Lonesome Tonight at number 20, It's Now or Never at number 27 and Jailhouse Rock at number 37. Soldier, by Destiny's Child, Ti and Lil Wayne, debuted at number four, while Almost Here, the duet from former Westlife star Brian McFadden and Delta Goodrem, fell from number three to number five. There was more follow up to Brits success for Franz Ferdinand won best rock act and best British group last week. Their self-titled album moved from 13 to number four. Last week's number one album Tourist, by Athlete, fell to number three.
Rock group Korn's guitarist quits

The guitarist with US rock band Korn has quit the music business, saying he made the decision after experiencing a religious awakening.

Brian 'Head' Welch told a radio station in California that his bandmates respected his decision to leave. A replacement guitarist has yet to be named by Korn, who are currently at work on their eighth studio album. Welch added that he would appear at a church in Bakersfield to explain how he "got to this place in life". The remaining members of Korn, who are known for their hardcore brand of rock, said they hoped Welch "finds the happiness he is looking for".

The 34-year-old made reference to the band's aggressive brand of music and its young fans in his parting statement. "Anger is a good thing, and if kids want to listen to Korn, good, but there's happiness after the anger," he told his local radio station in Bakersfield. "I'm going to show it through my actions, how much I love my fans," added Welch. Korn have enjoyed a moderate degree of chart success in the UK, with 10 singles breaking into the Top 40. Their best performance to date in the UK has been 2002's Here To Stay, which reached number 12, while their album Untouchables, released in the same year, made it to number four.
Vibe awards back despite violence

The US Vibe awards will be held again next year despite a stabbing which happened during the ceremony.

Vibe magazine president Kenard Gibbs said the attack earlier this month in Santa Monica was "sickening". He said not holding the awards would be counter to the work the magazine has done to promote hip hop music. Rapper Young Buck has been charged after allegedly stabbing a man who hit Dr Dre as he was about to receive a lifetime achievement award.

The rapper, whose real name is David Darnell Brown, is due in court on 20 December after being arrested on one charge of attempted murder and a second charge of assault with a deadly weapon. The performer is one of the members of 50 Cent's G-Unit group, which is signed to Dr Dre's record label. The man who was stabbed, Jimmy James Johnson, suffered a collapsed lung and is in a stable condition at a Los Angeles hospital. Mr Johnson allegedly approached Dr Dre, who was seated at a table in front of the stage, and appeared to ask for an autograph before punching him. During the ensuing scuffle - which involved many of the 1,000-strong crowd - Mr Johnson was stabbed as he was being dragged away by security staff,
'Christmas song formula' unveiled

A formula for the ultimate Christmas single has been revealed by chart bible British Hit Singles and Albums.

The recipe includes a reference to Father Christmas, sleigh bells, a children's choir and a charity element. The song should also include Christmas in the title, wishes for peace on earth and lots of airplay at office parties. "There are common musical elements linking nearly all the big Christmas number ones of recent times," said editor David Roberts. The book's analysts commissioned chart prank group Moped to create the first Christmas single using the whole formula - the song is called Gonna Have a No 1 This Christmas by Moped Vs Santa.

"Everybody says that Christmas number ones are formulaic, but Gonna Have a Number One this Christmas is the first song to crack the formula and combine all these elements into one ultimate Christmas track" said Mr Roberts. "Surprisingly, there's no Santa listed among the 8,000, top 75 chart performers in the book, so this is our chance to help Santa to his rightful place in British recording history." Big festive hits over the years include Band Aid's Do They Know It's Christmas?, Slade's Merry Christmas Everybody, Wham's Last Christmas and Sir Cliff Richards' Mistletoe and Wine. Band Aid 20's remake of Do They Know It's Christmas is set to be confirmed as number one in the charts on Sunday.
Glastonbury fans to get ID cards

Fans who buy tickets for this year's Glastonbury festival will be issued with photo ID cards in an attempt to beat touts, it has been confirmed.

The cards will include a photograph of the ticket-holder plus an electronic chip with their details to prevent tickets being sold on or forged. Tickets for the June event are expected to go on sale in April. "There is only one place in the world where you will be able to get tickets," festival organiser Michael Eavis said. "That will be the official source. If you get them anywhere else, you won't get in." Fans not wanting to carry the entrance card could present their passport or driving licence instead, he added.

More than 153,000 people are expected to travel to Mr Eavis' Somerset farm from 24-26 June, but the event's rising popularity has meant an extremely high demand for tickets in recent years. When the ID card idea was floated, Mr Eavis' daughter Emily said it would be "quite a big step in terms of ticketing for events" if implemented and they were "going as far as we can" to cut touting. "As long as it's approached in the right way, it might really work, it might really change the system," she said. In 2004, all 112,000 tickets for the public sold out in 24 hours. They were personalised with the names of purchasers, who were asked to bring identification, such as a driving licence, passport or household bill. But some forgot to take the right information while some touts simply offered to supply their own bills along with the ticket bearing their name. No details of this year's line-up have been confirmed but rumours have suggested U2 and Coldplay may be among the headliners.
Queen recruit singer for new tour

The remaining members of rock band Queen are to go on tour next year with former Free and Bad Company singer Paul Rodgers taking Freddie Mercury's place.

Guitarist Brian May has said he expects to be on the road with Rodgers and drummer Roger Taylor from April. May said: "Suddenly the Queen Phoenix is rising again from the ashes and will take precedence over... our lives." Queen have played with many different singers since Mercury's death in 1991 but have reportedly not toured. May performed with Rodgers at a concert to celebrate the 50th anniversary of the Fender Stratocaster guitar in London in September.

"We were both so amazed at the chemistry that was going on in [Free hit] All Right Now, that suddenly it seems blindingly obvious that there was 'something happening here,'" May wrote on his website. They teamed up again for a concert to mark their induction into the UK Music Hall of Fame, and were joined by Taylor. "The show went so incredibly well from our point of view, and we got so many rave reactions from out there, we decided almost then and there that we would look at a tour together," May wrote.

Queen went to number one in 2000 with a version of We Will Rock You sung by boy band 5ive and they have also played with Robbie Williams, Will Young and Bob Geldof. Queen bassist John Deacon has currently retired from the stage. Rodgers was singer with early 1970s rockers Free, who had a global hit with All Right Now, before forming Bad Company, a successful "supergroup" with members of King Crimson and Mott the Hoople. He has also been in The Firm with Led Zeppelin's Jimmy Page and The Law with The Small Faces and The Who drummer Kenny Jones.
U2 to play at Grammy awards show

Irish rock band U2 are to play live at the Grammy Awards presentation in the US next month, organisers have said.

Other acts to play include soul singer Alicia Keys, country singer Tim McGraw and punk band Green Day at the event on 13 February in Los Angeles. U2 are nominated twice for their recent single Vertigo, including a nomination for best rock song. This year the Grammys have been dominated by rap star Kanye West, who is in contention for 10 awards. US comedian Ellen Degeneres and singer Christine Milian will present awards at the event. Last week Grammy producers announced the show will be hosted by rap star and Chicago actress Queen Latifah. It will be held at the Staples Center. U2 had number one success in the album charts on both sides of the Atlantic in November when their latest studio album, How to Dismantle an Atomic Bomb, topped the US and UK charts. The band, who are also dominated for best international album at this year's Brit Awards, are to undertake a major world tour this year, their first for four years.
Rock band U2 break ticket record

U2 have smashed Irish box office records with ticket sales for their Dublin concerts, after more than 150,000 were sold within 50 minutes.

Tickets for the two concerts at the city's Croke Park stadium were released at 8am on Friday morning. "Nothing like it has ever been seen in Ireland before," said Justin Green, spokesman for organisers MCD Promoters. "We could have sold a million tickets." The Dublin dates on June 24 and 25 form part of the worldwide Vertigo tour. The tour begins in San Diego on 28 March and will cover 13 US cities. The band will also play 24 European gigs, finishing in Lisbon in August.

Mr Green said that ticket outlets had been "bombarded" by U2 fans. "Unfortunately there's thousands and thousands of disappointed fans all over the country which is disappointing, but there's only two dates confirmed," he said. Many fans camped on the streets of the Irish capital for three days to ensure they were first in line at Ticketmaster in St Stephen's Green Shopping Centre, where the tickets went on sale on Friday. However the majority of tickets, priced at between 59.50 and 80 euro each, were sold online. Earlier this week, Bono announced that the band would play two shows at the venue, which holds almost 80,000 people, due to the phenomenal demand for tickets.
Eminem beats Elvis to number one

Rapper Eminem has denied Elvis his fourth number one of the year, after his song, Like Toy Soldiers, stormed to the top of the singles charts.

The track claimed the top spot ahead of The King's latest re-release, Are You Lonesome Tonight. It is the fifth in a series of 18 reissues to mark the 70th anniversary of Presley's birth. Almost Here, the duet from former Westlife star Brian McFadden and Delta Goodrem, went in at number three.

Like Toy Soldiers, from Eminem's Encore album, is sampled from Martika's 1980s hit Toy Soldiers. It takes a swipe at hip-hop feuds and follows the success of Just Lose It. Last week's number one, Elvis's It's Now or Never, slipped 13 places to number 14, but all five of his re-released songs are in the Top 40. One World Project Tsunami fundraiser, Grief Never Grows Old, slipped four places to number eight. Featuring Cliff Richard and Boy George, the song was written by former DJ Mike Read. In the album charts, Athlete's latest offering Tourist claimed the top spot, toppling the Chemical Brother's Push The Button Down, which fell to number six.
J-Lo and husband plan debut duet

Singers Jennifer Lopez and husband Marc Anthony, a Latin pop star, are to perform a duet at this month's Grammy Awards in Los Angeles.

Anthony became Lopez's third husband in June 2004. He won a Grammy in 1998 and is nominated for two more this year. The 13 February ceremony will also include a rendition of The Beatles' Across The Universe by Bono, Stevie Wonder, Norah Jones and Brian Wilson. The song will go on sale online to raise money for the tsunami aid effort. The awards show will also feature performances from U2, Green Day, Alicia Keys and Kanye West - but the Lopez and Anthony duet is likely to be one of the biggest talking points.

Anthony, born in New York to a Puerto Rican family, is reported to be the biggest-selling salsa artist of all time. He is nominated this year for best Latin pop album and best salsa/merengue album. The tsunami tribute song will also feature Alicia Keys, Velvet Revolver and Tim McGraw. Fans will be able to download it for $0.99 (£0.53) from iTunes, or purchase the video from the CBS TV network's site. Kanye West, the rapper who leads the awards with 10 nominations, will perform alongside John Legend, Mavis Staples and the Blind Boys of Alabama. There will also be a tribute to Ray Charles featuring Bonnie Raitt and Billy Preston and a celebration of southern rock with Tim McGraw, Gretchen Wilson, Lynyrd Skynyrd, Dickie Betts and Elvis Bishop. Ray Charles, who died in June 2004, has seven posthumous nominations. Alicia Keys and Usher share eight nominations each.
Beastie Boys win sampling battle

US rappers Beastie Boys have won their long-running battle over the use of a sample in their song Pass the Mic.

The punk-rappers used three notes of music from flautist James Newton's Choir in their track from 1992. Although the group had paid a licence fee for the sample, Mr Newton said his copyright had been infringed. But the US Court of Appeal upheld its original decision that the group did not have to pay an additional fee to license the underlying composition. The Beastie Boys - Michael Diamond, Adam Horowitz, and Adam Yauch - are considered to be one of early pioneers of sampling music.

Sampling, now a standard practice among musicians, involves taking a segment of one track and using it in a different song. A three-judge panel of the court held in 2003 that the band had abided by copyright protections by paying a licence fee for a sample of Mr Newton's recording. That finding upheld a lower-court dismissal of the case in favour of the Beastie Boys. "We hold that Beastie Boys' use of a brief segment of that composition, consisting of three notes separated by a half-step over a background C note, is not sufficient to sustain a claim for infringement of Newton's copyright," Chief Judge Mary Schroeder wrote in her opinion. Mr Newton is a critically acclaimed jazz and classical flutist, composer, performer, and university professor. Mr Newton and the Beastie Boys were not available for comment.
Spector facing more legal action

Music producer Phil Spector is facing legal action from the mother of the actress he has been accused of killing.

Donna Clarkson, whose daughter Lana was found dead in Mr Spector's home in February 2003, is seeking unspecified damages in a civil action. The legal action accuses Mr Spector of murdering the actress at his LA home. Mr Spector is currently free on $1m (£535,000) bail and is awaiting trial. The 64-year-old has denied the killing, saying her death was accidental.

Ms Clarkson's legal action, filed in Los Angeles Superior Court, also accuses Mr Spector of negligence and battery, alleging he "grabbed, hit, fought with and restrained" Lana Clarkson before shooting her to death. Her lawyers said in a statement: "The Clarkson family had hoped that there would be some resolution with regard to the criminal proceedings before moving forward with the civil action. "However, Ms Clarkson and her family understand that the fair administration of justice takes time and in light of the numerous changes Mr Spector has made in his legal defence team over the last two years, Ms Clarkson was forced to file the action before (the statute of limitations expired) on 3 February 2005." Mr Spector, known for his work with the Beatles, has claimed that Lana Clarkson committed suicide. His lawyers, led by Bruce Cutler, have vowed to prove him innocent at trial.

Mr Cutler said: "Phil did not cause the death of this woman, he's not criminally responsible and he's not civilly responsible either. "But I'm not surprised they filed a suit for money, that seems to be de rigueur nowadays." A Los Angeles Superior Court judge is expected to set a trial date later this month for Spector, who was indicted on murder charges in September. Roderick Lindblom, one of Ms Clarkson's lawyers, said: "Our intent is to let the criminal proceedings go forward and not do anything that would interfere with the prosecution."
Usher leads Billboard nominations

R&B singer Usher is leading the race for the Billboard awards with nominations in 13 categories, including best male.

Alicia Keys has 12 nominations for the awards, which will be held on 8 December at the MGM Grand in Las Vegas. Other multiple nominees include Maroon5, OutKast, Kanye West, R Kelly, Gretchen Wilson, Hoobastank and Jay-Z. Soul singer Stevie Wonder will receive Billboard's Century Award, the magazine's highest honour for creative achievement, at the ceremony.

The awards will be hosted by American Idol presenter Ryan Seacrest, and will feature performances by Usher, Gwen Stefani, Nelly and Green Day. Usher and Keys will be battling it out for prizes including artist of the year, Hot 100 songwriter of the year and Billboard 200 album of the year for their respective albums Confessions and The Diary of Alicia Keys. Maroon5 and OutKast are also up for artist of the year, while OutKast's Speakerboxxx/The Love Below is a finalist for Billboard 200 album of the year, alongside Josh Groban's Closer. The awards honour the year's leading artists and songs as determined by their performance on Billboard's weekly charts.
Eminem secret gig venue revealed

Rapper Eminem is to play an intimate gig in London on Saturday, following a show on the River Thames on Friday.

The US star will play just two songs at a night showcasing his label Shady Records at the Islington Academy. Eminem performed on HMS Belfast on Friday, which is docked on the River Thames, where he filmed two songs for BBC One's Top of the Pops. He arrived in the UK on Friday following his appearance at the MTV Europe Music Awards in Rome. Other rap acts who may appear at the Islington gig include Stat Quo, Proof, DJ Green Lantern, Swift and Obie Trice.

Eminem's latest album soared to the top of the US chart after just three days on sale in record shops. Encore is now a chart-topper on both sides of the Atlantic following its debut at number one in the UK. The fourth album from the rap star was on sale for two days before it outsold all of its rivals. The album was released early in an effort to combat both physical and online piracy.

Eminem's album includes the track Mosh, which is a tirade against US President Bush and the presence of US troops in Iraq. The rapper was criticised earlier this year after a performance on BBC One's Top of the Pops in April led 12 viewers to complain he was "lewd" and "offensive". The complaints about the star grabbing his crotch were upheld by the BBC. "The performer had been asked to tone his act down after rehearsal but ignored this request during the live broadcast," a BBC statement read. "Although his gestures were part of the rap culture, they had gone beyond what is expected."
Beatles suits sell for $110,000

Four suits worn by the Beatles on their Please Please Me album cover have sold for $110,00 (£59,000) at a US auction.

But some of Elvis Presley's earliest recordings - including takes of All Shook Up - failed to sell at the Bonhams and Butterfields two-day sale. A private collection of six tape recordings of Presley valued at between $30,000 (£16,000) and $50,000 (£27,000) did not meet their reserve price. A signed Presley photograph managed to fetch $2,115 (£1,140).

Auction spokesman Erik Simon said the Presley tapes were withdrawn because "they did not meet the minimum price set by the owners".

He said the family of sound engineer Thorne Nogar did not want to divulge the price they had set or the offers they had received. The RCA tapes date from September 1956 to September 1957. The "pre-masters" include a take of Jailhouse Rock, religious songs, material for his first Christmas album, and banter between Presley, members of his band and Mr Nogar.

"We've had them for a lot of years, and I think the people should enjoy them. And frankly, we could use the money," Mr Nogar's son Stephen, 57, said before the auction. Mr Nogar, who died in 1994 aged 72, always used to make two tapes of sessions as a back-up in case RCA producers wanted to make late changes to songs. "He called them his 'ass-saver' tapes," his son said. The quality is said to be noticeably crisper than that of a new vinyl record. Because the family does not own the copyright to the music, the tapes could only be sold for "personal enjoyment" and cannot be copied for commercial gain. The auction made a total of $1.1m (£600,000).
Oasis star fined for German brawl

Oasis singer Liam Gallagher has been fined 50,000 euros (£35,000) after a fight in a German hotel two years ago.

Gallagher was arrested along with drummer Alan White and three other members of the band's entourage after the brawl in Munich in December 2002. The band said they were victims of an "unprovoked attack" in a nightclub. But police said Gallagher kicked an officer in the chest and had large amounts of alcohol and drugs - possibly cocaine - in his blood. Gallagher lost two front teeth in the fight, which led to the band abandoning their German tour. His brother and bandmate Noel was in bed at the time.

"The process has stopped by paying 50,000 euros," said Anton Winkler, spokesman for the Munich prosecutor. At the time, police said a "physical altercation" broke out among the musicians at about 0200 local time. That led to one of the group being "jostled" and falling onto the table of five Italian guests - causing the fight, they said. The fight continued outside, where "one of the officers was kicked in the chest with full force by Liam Gallagher... and suffered minor injuries", they said.
Disputed Nirvana box set on sale

A box set featuring 68 unreleased Nirvana tracks has gone on sale in the US, after years of legal wrangles.

With the Lights Out was intended to be released in 2001, to mark the 10th anniversary of the album Nevermind. It was blocked by Courtney Love, the widow of Nirvana frontman Kurt Cobain, who did not want unreleased song You Know You're Right on the box set. The dispute between Love and surviving band members Krist Novoselic and drummer Dave Grohl was settled in 2002. Work began on the box set in 1998, but legal battles put the project on hold. The legal fight centred on a studio recording of the unreleased track You Know You're Right, regarded by fans as one of the unreleased gems of Nirvana. The set, released on Tuesday, features three CDs and a DVD of rare performance and rehearsal footage. The DVD also includes the first performance of Smells Like Teen Spirit, the track that launched Nirvana on to the international stage in 1991. "The band wasn't always pretty, or always in tune. This is not Nirvana unplugged. It's Nirvana unedited," said Cobain biographer Charles Cross. The band's development ended tragically when songwriter Kurt Cobain committed suicide in April 1994.
Usher leads Soul Train shortlist

Chart-topping R&B star Usher is leading the field at this year's Soul Train Awards, with five nominations.

The singer, whose album Confessions has sold close to eight million copies in the US alone, is already in the running for eight Grammy Awards. Newcomer Ciara - who recently beat Elvis Presley to the UK number one spot - has four nominations, while Alicia Keys has three. The Soul Train Awards ceremony will take place in Hollywood on 28 February.

Usher has already swept the board at the American Music Awards with four titles, including two best album awards. His Soul Train nominations include best male R&B-soul album and best male R&B-soul single for Confessions Part II. Usher's work with rappers Ludacris & Lil Jon won him nominations for best R&B-soul or rap music video and best R&B-soul or rap dance cut for the song Yeah!, while his duet with Keys, My Boo, earned the pair a nod for best R&B-soul single. Keys' album The Diary of Alicia Keys was also up for best R&B-soul album by a female. Her song If I Ain't Got You received a best single nomination in the female R&B-soul category. Newcomer Ciara's four nominations include best female R&B-soul album and best R&B-soul or rap by a new artist. Beyonce, Prince, Destiny's Child, Jill Scott and New Edition all received two nominations each. The Soul Train Music Awards, which started 18 years ago, celebrates artists in R&B, hip-hop, rap and gospel music.
US charity anthem is re-released

We Are The World, the American charity anthem inspired by the success of Band Aid, has been re-issued to raise money for Aids research and tsunami victims.

More than 40 stars sang as group USA For Africa, including Lionel Richie, Diana Ross, Ray Charles, Bob Dylan, Michael Jackson and Bruce Springsteen. It topped the charts in the US and UK, raising millions of dollars for African famine relief. The re-release also marks the 20th anniversary of the original recording. It has been re-issued as part of a two-disc DVD set, which will also feature footage from the recording session of the track in January 1985. The single was originally released in the US on 7 March 1985 and sold 800,000 copies in its first week. It went on to win Grammys for song of the year and record of the year.
Queen recruit singer for new tour

The remaining members of rock band Queen are to go on tour next year with former Free and Bad Company singer Paul Rodgers taking Freddie Mercury's place.

Guitarist Brian May has said he expects to be on the road with Rodgers and drummer Roger Taylor from April. May said: "Suddenly the Queen Phoenix is rising again from the ashes and will take precedence over... our lives." Queen have played with many different singers since Mercury's death in 1991 but have reportedly not toured. May performed with Rodgers at a concert to celebrate the 50th anniversary of the Fender Stratocaster guitar in London in September.

"We were both so amazed at the chemistry that was going on in [Free hit] All Right Now, that suddenly it seems blindingly obvious that there was 'something happening here,'" May wrote on his website. They teamed up again for a concert to mark their induction into the UK Music Hall of Fame, and were joined by Taylor. "The show went so incredibly well from our point of view, and we got so many rave reactions from out there, we decided almost then and there that we would look at a tour together," May wrote.

Queen went to number one in 2000 with a version of We Will Rock You sung by boy band 5ive and they have also played with Robbie Williams, Will Young and Bob Geldof. Queen bassist John Deacon has currently retired from the stage. Rodgers was singer with early 1970s rockers Free, who had a global hit with All Right Now, before forming Bad Company, a successful "supergroup" with members of King Crimson and Mott the Hoople. He has also been in The Firm with Led Zeppelin's Jimmy Page and The Law with The Small Faces and The Who drummer Kenny Jones.
iTunes now selling Band Aid song

Ipod owners can now download the Band Aid single from iTunes after Apple reached agreement with the charity.

Apple had been unwilling to raise the cost of the single in line with other download services, said Band Aid. But the single is now on sale for 79p - the usual cost of a song from iTunes - with Apple donating a further 70p to the charity for each song downloaded. A copy of the original 1984 song is also available for download at 79p - with all proceeds going to the charity.

More than 72,000 copies of the new Band Aid single were sold on its first day of release on Monday, according to sales figures. The track has become the fastest-selling single of the year so far, shifting more copies than the rest of the top 30 combined, HMV claimed. Dido, Robbie Williams and Chris Martin are among those featured on the new version of Do They Know It's Christmas?, which is raising money to fight hunger in Africa. If the track sold 500,000 copies, more than £1m would be raised for charity. The CD is being sold for £3.99, with HMV, Virgin and Woolworths all donating their profits.
Prince crowned 'top music earner'

Prince earned more than any other pop star in 2004, beating artists such Madonna and Elton John in US magazine Rolling Stone's annual list.

The singer banked $56.5m (£30.4m) from concerts, album and publishing sales with his Musicology tour and album. He kept Madonna in second place, as she earned $54.9m (£29.5m) while embarking on her global Re-Invention Tour. Veterans Simon and Garfunkel were in 10th place, their comeback tour helping them earn $24.9m (£13.4m) last year.

"Prince returned to centre stage after a decade in the commercial wilderness," the magazine reported. The singer's 2004 tour took $90.3m (£48.5m) in ticket sales and he sold 1.9 million copies of his latest album Musicology.

Although she grossed more than Prince last year, Madonna remained in second place because of the "monumental" production costs of her tour. Heavy metal band Metallica's Madly in Anger with the World tour helped push their 2004 earnings up to $43.1m (£23.1m). They were ahead of Sir Elton John, who took fourth place and almost $42.7m (£23m) from performances including a debut on the Las Vegas Strip. Other seasoned performers in the list included Rod Stewart, whose sold-out shows and third volume of The Great American Songbook covers album helped net him £35m (£19m). The highest-ranking rap act in the list was 50 Cent, who at number 19 took $24m (£13m) to the bank.
Early Elvis recordings go on sale

Some of Elvis Presley's earliest recordings - including takes of All Shook Up - are going under the hammer on Sunday at a Los Angeles auction.

The six unedited reel-to-reel tapes - which were owned by the engineer who recorded them - are valued at up to $50,000 (£29,000). Highlights of the two hour-long collection will get their public debut at Bonhams auction house on Saturday. The RCA tapes date from September 1956 to September 1957. The "pre-masters" include a take of Jailhouse Rock, religious songs, material for his first Christmas album, and banter between Presley, members of his band and engineer Thorne Nogar.

"We've had them for a lot of years, and I think the people should enjoy them," Nogar's son Stephen, 57, said. "And frankly, we could use the money." Nogar, who died in 1994 aged 72, always used to make two tapes of sessions as a back-up in case RCA producers wanted to make late changes to songs. "He called them his ass-saver tapes," his son said. The quality is said to be noticeably crisper than that of a new vinyl record. Because the family does not own the copyright to the music, the tapes can only be sold for "personal enjoyment" and they cannot be copied for commercial gain.
Parker's saxophone heads auction

A saxophone belonging to legendary jazz musician Charlie Parker is expected to fetch up to $1m (£535,000) at an auction of jazz memorabilia next month.

The sale, at Guernsey's Auction House in New York, will feature instruments from other musicians including John Coltrane and Benny Goodman. Other items will include an evening gown belonging to Ella Fitzgerald. Organisers said the auction was the first in the US to be devoted to items belonging to jazz musicians.

Other items that will be auctioned include unreleased tape recordings of music by Parker as well as handwritten sheet music by jazz composers John Coltrane and Theolonius Monk. Among the instruments in the sale will be a trumpet which belonged to Dizzy Gillespie, which is expected to fetch around $500,000 (£267,000), as well as JJ Johnson's trombone and a vibraphone which beloned to Lionel Hampton. Works of art by musicians including Miles Davis and Bruni Sablan will also be featured. The proceeds from the auction, which will take place on 20 February, will go towards several organisations including the John Coltrane Foundation, a foundation set up in memory of Benny Goodman, and the Red Cross.
Comic Morris returns with sitcom

Comedian Chris Morris, who created controversial TV show Brass Eye, is to return to screens with a new sitcom about a spoof London media worker.

Morris will direct and co-write Nathan Barley - a character from cult website TV Go Home - for Channel 4. It is a send-up of the stereotypical "cool" metropolitan media scene, with Nicholas Burns in the title role. A Brass Eye satire of the media handling of paedophilia sparked 2,500 complaints in 2001.

Nathan Barley will be "a character-driven comedy", according to Charlie Brooker, who created TV Go Home in 1999 and has co-written the series. Barley is described as a "webmaster, guerrilla film-maker, screenwriter, DJ and in his own words, a 'self-facilitating media node". The story will also feature Dan Ashcroft, a style magazine columnist, and his sister Claire, a film-maker who hates the "cool" scene. As well as Brass Eye, Morris was behind another news show satire, The Day Today, and dark sketch comedy Jam. The new show is expected to begin in February.
TV station refuses adoption show

A TV station in the US has refused to show a controversial new series where adopted children try and pick their birth father - and win a cash prize.

The WRAZ-TV Fox affiliate in North Carolina was the only one of 182 stations to refuse Monday's show. Who's Your Daddy promises $100,000 (£52,000) to the contestant if she correctly identifies her father. It was met with protests by the National Council for Adoption, which said it "exploits" sensitive emotions. "It exploits the sensitive emotions of adoption," said Thomas Atwood, president of the National Council for Adoption. "It trivialises them. Adoption is a very personal, meaningful experience and it should not be commercialised like this." On the pre-taped programme, the contestant is presented with eight men who may or may not be her natural father.

If she picks the correct man from the line-up, the contestant wins the jackpot prize of US$100,000 (£52,590). However, if she picks the wrong man, then the impostor takes the money. Fox producers defended the show, saying it was a "positive experience". They have made six specials, though only one episode has so far been broadcast.

"The special was thoroughly vetted by our standards and practices department to ensure that it was appropriate for broadcast," said a Fox spokesman. "However, any network affiliate that feels the programming may be inappropriate for their individual market has the right to pre-empt the schedule." WRAZ-TV instead chose to air an independently-produced film, I Have Roots and Branches... Personal Reflections on Adoption, a documentary about families with adopted children. "We just don't think adoption is a game show," said Tommy Schenck, WRAZ-TV's general manager, though he said his decision had not been influenced by public protests.
Campaigners attack MTV 'sleaze'

MTV has been criticised for "incessant sleaze" by television indecency campaigners in the US.

The Parents Television Council (PTC), which monitors violence and sex on TV, said the cable music channel offered the "cheapest form" of programming. The group is at the forefront of a vociferous campaign to clean up American television. But a spokeswoman for MTV said it was "unfair and inaccurate" to single out MTV for criticism.

The PTC monitored MTV's output for 171 hours from 20 March to 27 March 2004, during the channel's Spring Break coverage. In its report - MTV Smut Peddlers: Targeting Kids with Sex, Drugs and Alcohol - the PTC said it witnessed 3,056 flashes of nudity or sexual situations and 2,881 verbal references to sex. Brent Bozell, PTC president and conservative activist said: "MTV is blatantly selling raunchy sex to kids. "Compared to broadcast television programmes aimed at adults, MTV's programming contains substantially more sex, foul language and violence - and MTV's shows are aimed at children as young as 12. "There's no question that TV influences the attitudes and perceptions of young viewers, and MTV is deliberately marketing its raunch to millions of innocent children."

The watchdog decided to look at MTV's programmes after Janet Jackson's infamous "wardrobe malfunction" at last year's Super Bowl. The breast-baring incident generated 500,000 complaints and CBS - which is owned by the same parent company as MTV - was quick to apologise. MTV spokeswoman Jeannie Kedas said the network follows the same standards as broadcasters and reflects the culture and what its viewers are interested in. "It's unfair and inaccurate to paint MTV with that brush of irresponsibility," she said. "We think it's underestimating young people's intellect and level of sophistication." Ms Kedas also highlighted the fact MTV won an award in 2004 for the Fight for Your Rights series that focused on issues such as sexual health and tolerance.
US actor 'found with gun residue'

Actor Robert Blake had gunshot residue on his hands and clothes the night his wife was shot dead, a court has heard.

But it may not have come from the shot that killed Bonny Lee Bakley in 2001, Mr Blake's murder trial was told by criminalist Steven Dowell. Mr Dowell told a Los Angeles court the residue may have come from Mr Blake's revolver, his gun collection, his presence at the crime scene or police. The 71-year-old former star of US TV drama Baretta has denied murder. Mr Blake said he found Ms Bakley, 44, dead in a car after they left a restaurant.

He said he briefly returned to the restaurant to collect a gun he had left behind and discovered her body when he returned. The gun he collected was not the murder weapon. It could also have been picked up if he touched or leant on the car when he found the body, or from a police box in which his clothes were later stored. The box had come from an area where officers went after being on the firing range. But Mr Dowell also said the residue would have been present if Mr Blake fired a gun that night. Witnesses have already told the trial Mr Blake "stood out as being quite nervous and agitated" at the restaurant before the murder. The actor, who won an Emmy for playing a maverick detective in the 1970s TV cop drama Baretta, could face life in prison if convicted.
EastEnders 'is set for US remake'

Plans to create a US soap based on the BBC's EastEnders have reportedly been drawn up by the Fox TV network.

EastEnders' head writer Tony Jordan and music mogul Simon Fuller are involved in the project, according to reports in the Hollywood Reporter trade newspaper. It said scripts have been commissioned for a series about a community of working class people in of Chicago. The original EastEnders was pulled from BBC America last year after it proved a failure in the ratings. US versions of other British hits have proved less successful across the Atlantic.

BBC comedy Coupling was remade with a US cast, but lost its primetime slot on the NBC network due to disappointing ratings. At home, EastEnders has been facing its own ratings battle, recently losing out to rival ITV soap Emmer dale. Primetime soaps on US television have made a recent comeback, following the success of ABC serial Desperate Housewives. The series takes a "darkly comedic" look at the goings-on of a group of characters living in the suburbs.
US 'to raise TV indecency fines'

US politicians are proposing a tough new law aimed at cracking down on indecency and bad language on US TV.

Fines of up to $500,000 (£266,582) could be imposed each time broadcasters transmit nudity or profanities. The proposal, unveiled in the House of Representatives, also seeks to revoke a broadcaster's licence after three violations have been committed. The exposure of Janet Jackson's breast at last year's Superbowl landed CBS with a $550,000 (£293,264) fine. Entertainers could also be liable for fines under the proposed legisation from both US politcians and officials from the Federal Communications Commission (FCC). A Republican senator from Kansas, Sam Brownbeck, is set to call for a maximum $3 million (£1.6 million) fine for repeated violations.

The current maximum fine stands at $32,500 (£17,320) - 20 of the stations in the CBS network were each penalised these lesser amounts for the Jackson incident. Republican politician Fred Upton, who chairs the committee responsible for broadcasting, said current fines are "more of a cost of doing business rather than a deterrent". Last year's Janet Jackson 'wardrobe malfunction' encouraged the FCC to impose tougher rules, but the US Congress adjourned last year without agreeing on a new level of fines. New figures have to be decided before new legislation can be put before President Bush. Certain broadcasters, like Fox, claim the material they carry does not violate indecency laws and is protected under the right to free speech.
Eurovision 'greats' to do battle

Stars of the Eurovision Song Contest from the show's 50-year history are to compete against each other to celebrate the contest's anniversary.

Viewers will choose 14 past songs to be performed by the original artists or others in the spirit of the originals. Past Eurovision performers include Abba, Celine Dion, Bucks Fizz, Nana Mouskouri, Lulu and Julio Iglesias. Fans will then vote as usual to pick the all-time best Eurovision song during the show in Denmark in October. The first contest was organised by the European Broadcasting Union, or EBU, in 1956, and has become an annual event pitting pop giants against musical minnows - with often surprising results.

While some regard it as an essential celebration of continental talent, others see it as an equally unmissable parade of the reasons some countries do not normally produce international stars. The 50th annual contest will be held in Kiev, Ukraine, in May, after Ukrainian singer Ruslana won last year. The 50th anniversary special will be held in Denmark later this year because the Danish Broadcasting Corporation came up with the idea for the all-time contest. A plan to hold it in London was scrapped because of problems finding a suitable venue. Ireland has been the most successful country in the show's history with seven victories, followed by the UK, France and Luxembourg with five each.
UK TV channel rapped for CSI ad

TV channel Five has been criticised for sending "offensive" and "threatening" advertising material to viewers for a new show about murder scene scientists.

Five mailed thousands of fake dossiers including photos of murder victims and an e-mail suggesting the recipient was being stalked by a serial killer. Following complaints, the Advertising Standards Authority contacted Five to cease promotion of crime show CSI:NY. Five admitted it had sent out 55,000 promotion packs but had now stopped. The promotion material was sent in brown envelope of the type used by investigators in the series, a spin-off from the highly successful CSI: Crime Scene Investigation series, which also runs on Five. The pack also features pictures of forensic evidence from a crime scene and a wanted poster, which did have a CSI:NY logo printed in large at the bottom.

Five said it had received 100 complaints but that it had been surprised at the reaction because it was "obvious this material is promoting a drama". A Five spokesman said: "In light of the efforts we have made to make the nature of the contents so transparent we are surprised a very small minority of recipients have mistaken it as anything else. "Everyone who was sent this promotion has expressed an interest in receiving details about this particular genre of programming on various websites. "We have also received emails and calls from recipients praising the originality and imagination of the campaign."
X Factor show gets second series

TV talent show The X Factor is to return for a second series after being recommissioned by ITV.

Judges Simon Cowell, Louis Walsh and Sharon Osbourne are in discussions to sign up for the new series. The final of the first series will take place on 11 December. Last Saturday's show was beaten in the ratings by the BBC's Strictly Come Dancing. "Working on the X Factor has been a blast... I predict series two will be even better," said Cowell. "I think the production team have done an amazing job," he added.

The Pop Idol-style show votes off a group or contestant every week - the two that receive the lowest public vote have to perform a second time before the judges make a final decision. Rowetta Satchell, Steve Brookstein, Tabby Callaghan and group G4 are the remaining finalists. ITV's controller of entertainment, Claudia Rosencrantz, said she had no hesitation in recommissioning the show. "There's much more to come this series as we build towards the final next month and it's great to have secured this terrific format for our viewers for another series," she said.
Alicia Keys to open US Super Bowl

R&B star Alicia Keys is to open February's Super Bowl singing a song only previously performed there by Ray Charles and Vicki Carr.

Keys, who will sing America the Beautiful, will be accompanied by 150 students from the Florida School for the Deaf and the Blind. Charles, who died last year, attended the school as a child in 1937. Keys said she was "very excited", describing Charles as "an artist I admire, miss and respect". "I know that this is going to be a very touching and memorable moment," she said.

It will be her first performance at the Super Bowl, which will be watched by millions in the US on 6 February. Sir Paul McCartney will provide the half-time entertainment in the slot filled by Janet Jackson last year. Organisers have promised there will be no repeat of her nipple-baring incident that sparked thousands of complaints on US TV's most-watched broadcast. A National Football League spokesman said they were "comfortable" this show would be acceptable to a mass audience. The game and show were watched by 144 million people in the US in 2003.

Twenty CBS-owned TV stations were fined $550,000 (£300,000) by the country's TV regulatory agency after more than 542,000 complaints were made about Janet Jackson's "wardrobe malfunction". Sir Paul said: "There's nothing bigger than being asked to perform at the Super Bowl. "We're looking forward to rocking the millions at home and in the stadium."
'Comeback' show for Friends star

Friends actress Lisa Kudrow is to play the lead role in a new series about a one-time sitcom star, according to the Hollywood reporter.

Thirteen episodes of Comeback have been commissioned by cable channel HBO, home of hits such as Sex And The City. Kudrow, who played Phoebe in Friends, co-wrote the pilot episode and will also act as executive producer. HBO has been looking for its next big comedy hit since Sex And The City drew to a close in the US in February. Comeback is the first 30-minute comedy series that the channel has picked up since the Sex And The City drew to the end of its six-year-run. Friends ended its 10-year run on the NBC network in May, and attentions have turned to which projects its six individual stars would pursue.

Matt LeBlanc is starring in a Friends spin-off sitcom, charting Joey's fortunes in Los Angeles as he pursues his acting career. Jennifer Aniston, who was Rachel in the long-running show, has enjoyed a series of successful film appearances, with further projects in the pipeline. Courteney Cox Arquette (Monica) has been working on a drama project along with husband David Arquette for HBO, called The Rise And Fall Of Taylor Kennedy. Matthew Perry, who played Chandler, has appeared on the West End stage, and has a film, The Beginning Of Wisdom, currently in production. And David Schwimmer (Ross) directed during his time on Friends, and has also worked on Joey.
Hillbillies singer Scoggins dies

Country and Western musician Jerry Scoggins has died in Los Angeles at the age of 93, his family has said.

Scoggins was best remembered for singing the theme tune to popular US TV show The Beverly Hillbillies. The Texan-born singer approached the producers of the programme with theme tune The Ballad of Jed Clampett for the pilot which was screened in 1962. The show, which told the story of a poor man striking oil and moving to Beverly Hills, ran until 1971.

Scoggins' daugher Jane Kelly Misel said that her father never tired of the song and would sing it at least once a day. "He'd sing it at birthdays and anniversaries and variety shows. He never stopped performing it," she said. When a film version of The Beverly Hillbillies was made in 1993, Scoggins came out of retirement to perform the theme tune. Scoggins sang the lyrics while bluegrass stars Lester Flatt and Earl Scruggs played guitar and banjo.
Branson show flops on US screens

Entrepreneur Sir Richard Branson's US TV show, The Rebel Billionaire, is proving a flop in the ratings.

The programme suffered poor viewing figures on its debut on the Fox network three weeks ago, and has lost one in five of its viewers since then. The show is seen as Fox's answer to The Apprentice featuring tycoon Donald Trump, a ratings hit for rivals NBC. Sir Richard's show sees a group of young entrepreneurs compete to become the president of his business empire. The Rebel Billionaire has averaged five million viewers and is 91st in the rankings of all prime-time shows. The Apprentice, which has already completed its first season, is still managing to pull in 16 million viewers, while its prime-time ranking is number four.

But Fox has said it plans to stick with Branson's show throughout its 12-episode run. "It's going to remain on the air," said the network's spokesman Scott Grogin. "Creatively we're extremely pleased with the show and hope the audience will find it," he added. Contestants on Sir Richard's show are confronted with business tasks to solve, similar to The Apprentice. They are also subjected to stunts like walking a plank suspended in mid-air. The Rebel Billionaire has marketed itself as a less materialistic version of The Apprentice, with Sir Richard shown jumping out of a taxi, while Trump is seen in a limousine.
Housewives lift Channel 4 ratings

The debut of US television hit Desperate Housewives has helped lift Channel 4's January audience share by 12% compared to last year.

Other successes such as Celebrity Big Brother and The Simpsons have enabled the broadcaster to surpass BBC Two for the first month since last July. BBC Two's share of the audience fell from 11.2% to 9.6% last month in comparison with January 2004. Celebrity Big Brother attracted fewer viewers than its 2002 series.

Comedy drama Desperate Housewives managed to pull in five million viewers at one point during its run to date, attracting a quarter of the television audience. The two main television channels, BBC1 and ITV1, have both seen their monthly audience share decline in a year on year comparison for January, while Five's proportion remained the same at a slender 6.3%. Digital multi-channel TV is continuing to be the strongest area of growth, with the BBC reporting Freeview box ownership of five million, including one million sales in the last portion of 2004. Its share of the audience soared by 20% in January 2005 compared with last year, and currently stands at an average of 28.6%.
McCririck out of Big Brother show

Racing pundit John McCririck has become the latest contestant to be evicted from Celebrity Big Brother.

He was nominated to leave the Channel 4 show by fellow housemates, alongside Happy Mondays dancer Bez. At one time Bez was among the most popular contestants but he has since become withdrawn and argumentative. McCririck was ordered to leave the house on Monday, following Jackie Stallone, the actor Sylvester's mother, who was first to be evicted. Bez reacted badly to the news that he had been nominated by five of his fellow housemates, whilst John received four votes against him. Sylvester Stallone's ex-wife Brigitte Nielsen nominated both John and Bez. She said: "Bez is a difficult human being. There's something wrong with him. Even though he's making an effort, he's not very happy in here." Former Holby City actor Jeremy Edwards said he had nominated Bez after he became agitated on Friday night and talked about escaping over the wall to go clubbing. He said Bez was being "loopy" and "stressed". According to bookmaker Ladbrokes, John McCririck was 1/3 favourite to be evicted on Monday while Bez was at 9/4 . McCririck faced the public vote on Friday and received 67% of the vote to keep him in the house, whilst Jackie Stallone was evicted.
Star Trek fans fight to save show

Star Trek fans have taken out a full-page ad in the Los Angeles Times in an attempt to persuade TV executives not to scrap Star Trek: Enterprise.

Made by the UPN TV network, the latest spin-off from the hit sci-fi show is due to end in May after four series. But fans around the world have pitched in to pay for the advert, which had the headline "Save Star Trek". They are also asking the Sci-Fi Channel to pick it up from UPN and will stage a rally in Los Angeles on 25 February.

The advert described the Star Trek franchise as a "cultural icon". Enterprise stars former Quantum Leap actor Scott Bakula as Captain Archer and is set before the original 1960s Star Trek series. "Captain Archer and the crew of the NX-01 need your help to continue their journeys!" the advert said. It also included a cut-out coupon for fans to send to UPN's parent companies Paramount and Viacom plus the Sci-Fi Channel. It also urged supporters to join the rally outside the Paramount studios.

Fan website Trek United is hoping to raise $32m (£17m) from donations by the end of March to pay for a fifth series. More than $23,000 (£12,000) has been pledged so far, according to the site. The 98th and final episode of Star Trek: Enterprise will air in the US on 13 May. The fourth series has averaged 2.9 million viewers per episode - half the amount it got in its first series. Star Trek: Enterprise began in 2001 following other Star Trek spin-off series The Next Generation, Deep Space Nine and Voyager.
Oscar host Rock to keep it clean

Oscar host Chris Rock said he will steer clear of bad language when he fronts the awards on 27 February.

The comedian, who recently got into trouble for poking fun at the ceremony, is renowned for his heavy use of expletives during his stand-up routine. The live ceremony will be broadcast with a transmission delay on US network ABC to ensure swear words are removed. "I've been on TV and been funny not cursing," he said during an interview for CBS network's 60 Minutes show. "As far as content is concerned, I will talk about the movies. I'm not really worried about it. I'm sure ABC might be more worried about it than me," he added.

The 40-year-old comedian caused a furore when he said in an interview with US magazine Entertainment Weekly recently that he hardly ever watched the Oscars and labelled awards ceremonies "idiotic". The show's producers defended Rock and confirmed that he would still be presenting the Oscar ceremony, saying his comments were "humorous digs". Meanwhile, the Academy has announced that Oscar-nominated actress Natalie Portman will present an award at the ceremony. Portman, who has been nominated for a best supporting actress gong for her role in Mike Nichols' Closer, joins a growing list of stars set to bestow an award at the ceremony including Dustin Hoffman, Drew Barrymore, Renee Zellweger and British-born actress Kate Winslet.
Johnny and Denise lose Passport

Johnny Vaughan and Denise Van Outen's Saturday night entertainment show Passport to Paradise will not return to screens, the BBC has said.

The ex-Big Breakfast presenters were recruited to host the BBC One family variety show last July. "There are currently no plans for another series," a spokeswoman said. She added the pair "brought a real warmth to Saturday night, but in the end we felt we had done enough with the format of the show".

Passport to Paradise involved a combination of games and outside broadcasts with a high level of audience participation. The first instalment attracted more than 4.1 million viewers - but that had dropped to fewer than 2.7 million by the time it ended. The BBC spokeswoman said Graham Norton's Strictly Dance Fever would be a priority for 2005. "That's very much on the cards for next year, and we're concentrating at the moment on Strictly Come Dancing, which is doing phenomenally well," she said.
Double eviction from Big Brother

Model Caprice and Holby City actor Jeremy Edwards have both left the Celebrity Big Brother house in a surprise double eviction on Friday.

Caprice, who left in the scheduled fourth eviction having gained just 5% of the public vote, afterwards said: "I am so happy, I am so glad I'm out." Edwards then left in a surprise eviction, with 12% of the vote. Nineteen-year-old Blazin' Squad singer Kenzie is currently favourite to win the £50,000 charity prize. Caprice had been the pre-show favourite to be voted out of the house, with bookmakers Ladbrokes offering odds of 1/5 on her departure. Ladbrokes spokesman Warren Lush had said she was "the hottest eviction favourite so far this series".

Odds on Kenzie's victory have been slashed from 4/6 to 1/2, although bookmakers have said they are not ruling out a late rally from former Happy Mondays star Bez. The other remaining housemate is actress Brigitte Nielsen. DJ Lisa I'Anson became the third housemate to be voted out on Wednesday when she became the victim of a surprise eviction during a game of hide-and-seek on the Channel 4 show. I'Anson said she was "glad to be out" and predicted that Kenzie would emerge as the winner. The winner is due to be announced on Sunday night.
Celebrities get their skates on

Former England footballer Paul Gascoigne will join EastEnders' actress Scarlett Johnson on BBC One's Strictly Ice Dancing.

The one-off Christmas special will also star television presenter Carol Smillie and Jessica Taylor from Liberty-X. Each celebrity will be paired with a professional skater to impress a panel of judges and win the audience vote. The BBC is yet to confirm the final two stars who will battle it out to become Ice King or Queen.

Veteran presenter Bruce Forsyth and Tess Daly will host the programme, which follows hot on the heels of the current Saturday night series Strictly Come Dancing. The celebrities will have to practise a stipulated ice dance and perform it at an ice rink with their partner. The judges will have 50% of the vote to decide who wins the contest, with the ice rink audience making up the rest of the vote. The show forms part of the BBC's festive schedule. Ice skating duo Jayne Torvill and Christopher Dean are to front a similar celebrity ice dance show for ITV, titled Stars on Thin Ice. The contestants on Stars on Thin Ice will each be paired up with a professional skater and will learn a new routine every week. At the end of the series, one celebrity will be crowned the winner.
Holmes wins '2004 top TV moment'

Sprinter Kelly Holmes' Olympic victory has been named the top television moment of 2004 in a BBC poll.

Holmes' 800m gold medal victory beat favourite moments from drama, comedy and factual programmes, as voted by television viewers. Natasha Kaplinsky's Strictly Come Dancing win was top entertainment moment and a Little Britain breast feeding sketch won the comedy prize. The 2004 TV Moments will be shown on BBC One at 2000 GMT on Wednesday. Double gold medal winner Holmes topped the best sports moment category, beating Maria Sharapova's Wimbledon triumph and Matthew Pinsent's rowing victory at the Olympics.

She then went on to take the overall prize of Golden TV Moment. The sight of former royal correspondent Jennie Bond with dozens of rats crawling over her in ITV's I'm a Celebrity Get Me Out of Here was named best factual entertainment moment. Michael Buerk's return to Ethiopia, 20 years after originally reporting its famine, topped the factual category for BBC programme This World. Long-running soap EastEnders won the best popular drama moment title when character Dot confided in Den Watts that she was unwell.
Veteran comic Cyril Fletcher dies

Veteran comedian and broadcaster Cyril Fletcher has died aged 91 at his home in Guernsey.

Fletcher will be remembered for his "odd odes" and amusing misprints on TV show That's Life in the 1970s and 80s, as well as a long variety career. He was also a regular on Does the Team Think?, a comic version of radio information show The Brains Trust. That's Life host Esther Rantzen said he was "so lovely" and a "delight" to work with. "The thing about Cyril was that he was, to use a slightly old-fashioned phrase, an English gentleman," she said. "He was courteous, and understated, and he adored gardens, particularly creating them for his beautiful wife.

"He was funny and witty to work with. He was a real friend and I shall miss him." One of the last comedians of old-time variety era, Fletcher made his first TV appearance in 1937. A year after BBC Television began, he was seen reciting humorous poems, appearing in a revue, Tele-Ho, and playing the Emperor of Morocco in the first televised pantomime, Dick Whittington. He went on to become a regular voice on radio, have a string of TV shows in the 1950s and appear in several films, including 1947's Nicholas Nickleby. He married actress Betty Astell in 1941 and in the 1950s and 60s, they produced pantos and summer shows, discovering new stars including Harry Secombe. In the mid-1990s, Fletcher said he had made a "fabulous living" since the age of 22 and had never had a day out of work.

He was most recently seen presenting a gardening programme for Channel TV. Fletcher was described as a "consummate professional" by his friend and fellow broadcaster Michael Pointon. "It really was a pleasure to work with him - he had met everyone and done everything," Mr Pointon said. "He was a whimsical, droll fellow, but also a very artistic man. As a friend, he was very kind, and generous." Fletcher's daughter Jill said her father would be sorely missed. "He was greatly loved by the public," she said.
Springer criticises Opera musical

Talk show host Jerry Springer, whose programme inspired the controversial opera shown by the BBC, has said he would not have written it himself.

The BBC received 47,000 complaints before the musical was broadcast, and protesters demonstrated outside BBC buildings across the UK. Springer helped launch the West End show and attended the opening night. "I wouldn't have written it. I don't believe in making fun of other religions," he said.

The TV host said he understood how people could have thought the musical had gone too far. "You know, on our TV show if people use inappropriate language we bleep it out, if there's nudity we cover it up, so that viewers at home don't get to see any of this," he said.

Asked whether he thought the BBC should have screened the controversial musical he said: "I don't know if they should have had it on television but, good Lord, if you don't like what's on television, that's why God gave us remote controls. "My show is about dysfunctional people and I defy anyone to watch the show and suggest to me the people on it aren't to some degree dysfunctional."

"If I did a show about the war in Iraq, it wouldn't make me a warmonger, I would just be doing my job to report on the war. "In the case of my show, it's my job to report on the dysfunctions that take place in society." The British-born presenter is in London to speak at a fundraising dinner for the United Jewish Israel Appeal. The dinner, on Tuesday, is expected to be attended by more than 800 guests.
Ethnic producers 'face barriers'

Minority ethnic led (Mel) production companies face barriers in succeeding in the film and television industries, research has suggested.

The study, commissioned by Pact and the UK Film Council, included interviews with industry experts and individuals. They indicated that career progression and a lack of role models are among the main problems within such companies. The research indicated that about 10% of independent production companies in the UK are minority ethnic led.

A minority ethnic led company is defined as one in which the majority of decision-making power rests with an individual or individuals from a minority ethnic group. The report also explored the problems faced by such companies when attempting to compete within the film and TV industries. It said they are often smaller than other companies and lack the resources, so are often squeezed out of the market by bigger firms. The research recommended that minority ethnic led companies could benefit from such positive actions as career training and business advice, plus improved communication within the film and TV sectors. "The UK has a rich and diverse culture and it is essential that it is reflected on film and television," said Arts minister Estelle Morris of the findings. "I welcome this report which I hope will lead to more doors being opened and all businesses in our film and television industries being given the same opportunities."
US TV special for tsunami relief

A US television network will screen a celebrity TV special to benefit the tsunami relief effort in South Asia.

NBC will encourage viewer donations during an hour-long show featuring musical performances on 15 January. Actress Sandra Bullock has donated $1m (£525,000) to The American Red Cross and actor Leonardo DiCaprio pledged a "sizable" aid contribution to Unicef. Meanwhile 70 Hong Kong music and movie stars re-recorded We Are the World in Mandarin and Cantonese to raise funds.

The song will not be released as a single, but will be played regularly during a Chinese telethon on Friday in aid of victims of the Boxing Day disaster. Around 140,000 people were killed and five million left homeless or without food and water after an earthquake below the Indian Ocean sent waves crashing into coastal communities in 11 countries.

The United Nations warned that the number killed in the disaster could rise sharply, with aid yet to reach some remote areas. Performers have yet to be confirmed for NBC's aid relief benefit later this month. It follows a two-hour telethon carried by all four major US television networks 10 days after the 11 September terror attacks in 2001. America: A Tribute to Heroes raised more than $150m (£79m) to help victims of the suicide attacks on the World Trade Center and Pentagon.
Gervais writing Simpsons episode

The Office's Ricky Gervais is writing an episode of hit US cartoon The Simpsons, following an invitation from its creator Matt Groening.

Gervais has already begun writing the script but is keeping its subject matter a closely guarded secret. He will also write a part for himself in the episode. "I've got the rough idea but this is the most intimidating project of my career. The Simpsons is the greatest TV show of all time," he said. Groening recently heaped praise on The Office, saying: "Everybody on The Simpsons is a fan of The Office - it's one of the best shows on TV in the last decade." Gervais has already said he would not guest star in the show as his Office character David, having left him behind for good in the Christmas specials. The Office became a surprise US success when it was screened on cable channel BBC America. The first series won two Golden Globes in 2004 for best comedy and best TV actor for Gervais.

In winning it beat the likes of Sex and the City and Will and Grace. An American version was produced, but so far only a pilot has been broadcast - to much criticism that it failed to live up to the original. At the British Comedy Awards on Wednesday, Gervais was handed a special achievement award for writing. But The Office missed out in the best comedy show category to Little Britain. Matt Groening was also at the awards to collect the award for best international comedy for The Simpsons.
Brookside actress Keaveney dies

Actress Anna Keaveney, who appeared in Brookside, My Family and A Touch of Frost, has died of lung cancer aged 55.

Keaveney, who played Brookside's Marie Jackson when the Channel 4 soap began in 1982, died on Saturday. Born in Runcorn, Cheshire, she also starred in numerous films including 1989's Shirley Valentine. She played Nellie in Mike Leigh's latest film Vera Drake, which won the Golden Lion prize for best film at this year's Venice Film Festival.

And most recently she appeared alongside Richard Wilson in ITV's King of Fridges and with Martin Clunes in Doc Martin. Other TV appearances included the part of Matron in ITV drama Footballers' Wives and a cameo role as Tom Farrell's mother Sheila in BBC comedy Gimme Gimme Gimme. Keaveney's career also included stage performances in Neaptide for the National Theatre, Private Lives and The Rise and Fall of Little Voice. The actress died in hospital. Her agent Barry Brown said: "Anna was due to have had another operation on Friday but unfortunately she was too weak."
&#163;1.8m indecency fine for Viacom

Media giant Viacom has paid out $3.5m (£1.8m) to end investigations into indecency in its US radio and TV shows.

The settlement to the Federal Communications Commission (FCC) ends a long-running saga dating back to 2001. The FCC was looking into 50 shows, including those by "shock jock" Howard Stern and two New York DJs. Stern recently announced he was leaving Viacom while the two DJs were sacked after their show featured a couple purporting to have sex in a church. After the church incident two years ago Viacom agreed to install audio delay equipment at its radio stations that broadcast live programming.

It also agreed to train its broadcasters and employees about indecency laws. The agreement cancels investigations into about 50 radio and television shows, said Richard Diamond, FCC deputy secretary of communications. The shows were broadcast by Viacom-owned stations across the United States. Viacom has five days to pay the $3.5m fine, according to the agreement. The payment is not related to the FCC's $550,000 (£293,000) fine levied against Viacom after the exposure of singer Janet Jackson's breast during the CBS Super Bowl halftime show in January. Viacom is contesting that fine. It is not the first time that Viacom has paid out over indecency charges. Infinity Broadcasting, which is owned by Viacom, paid cumulative fines totalling $1.7m (£907,000) in 1995 to settle FCC violations by Stern.
Celebrities get to stay in jungle

All four contestants still remain in I'm A Celebrity ... Get Me Out Of Here as no evictions were made on the television show on Saturday.

Contestants Paul Burrell, Joe Pasquale, Janet Street-Porter and Fran Cosgrave were told by hosts Ant and Dec. Natalie Appleton's decision to quit the show last Monday had given them all a stay of execution, the group were told. Model Sophie Anderton was the last person to be voted off the ITV1 show, set in the Australian jungle. The four remaining stars will do a joint Bushtucker Trial on Sunday.

Former All Saints singer Natalie Appleton,31, walked out of the show after learning she would face a fifth so-called Bushtucker Trial. The celebrities are chosen by the viewers to pass trials in order to win food for the rest of the camp. Appleton had endured a torrid time during the programme, including a well-publicised row with Sophie Anderton. And on 26 November singer Brian Harvey quit as a contestant after he had a blazing row with Janet Street-Porter.
No charges against TV's Cosby

US comedian Bill Cosby will not face charges stemming from an allegation of sexual misconduct.

Authorities in Philadelphia said they found insufficient evidence to support the woman's allegations regarding an alleged incident in January 2004. The woman reported the allegations to Canadian authorities last month. Cosby's lawyer, Walter M Phillips Jr, said the comedian was pleased with the decision. "He looks forward to moving on with his life," he said. District Attorney Bruce L Castor Jr, who was in charge of the case, said that detectives could find no instance "where anyone complained to law enforcement of conduct which would constitute a criminal offence.

He also said that the fact the woman waited a year before coming forward, and she had had further contact with Cosby during that time, were also factors in his decision. The unidentified woman's lawyer, Dolores M Troiani, said her client was likely to sue the comedian. "I think that's the only avenue open to her. She felt, as we did, that it's a very strong case and she was telling the truth." She also said that the woman supplied further evidence to prosecutors that she believed strengthened her allegations. Cosby emerged as one of the first black comics to have mainstream success in the US. He was a successful stand-up before hosting the children's show Fat Albert and the Cosby Kids, and starring in The Cosby Show, one of the biggest sitcoms of the 1980s.
Wife Swap makers sue US 'copycat'

The British producers of US Wife Swap are taking legal action against a show they claim is "a blatant and wholescale copycat" of their programme.

RDF Media, which makes the show for US network ABC, has filed a damages claim for $18 million (£9.25 million) against Fox's Trading Spouses. ABC bought the rights to the British show, which was first aired in 2003 and became a hit on Channel 4. The US network is not part of the claim, but has supported RDF's action. "We respect our producing partners' right to protect their intellectual property in whatever manner they deem most appropriate," said ABC in a statement. A spokesman for Fox said it had not seen the details of the legal action and could not comment.

Their show was first screened in June, and was criticised in the press for its similarities to Wife Swap. ABC originally planned to call their programme Trading Moms, but changed it to avoid confusion with the Fox version. Earlier this year, the NBC network claimed that Fox's boxing show The Next Great Champ had been hurriedly produced to ensure its programme was the first to be screened. NBC alleged that boxing regulations had been violated, but failed in their attempt to have the show pulled. The Fox show proved a ratings flop, while NBC's The Contender is due to begin in February.
Show over for MTV's The Osbournes

Rock star Ozzy Osbourne has said his family will not make any more episodes of reality TV show The Osbournes.

"At the end of it I didn't like having cameras around the house all the time," the Black Sabbath singer told reporters at the MTV Europe Awards in Rome. His wife Sharon, who also appears in the popular MTV show based on the Osbournes' family life, agreed. "Now everybody's doing reality shows. He's done it, he's been there, he's got to do something else," she said.

Ozzy Osbourne said he had had enough of the work involved in making the series. "When you watch a 25-minute episode, I've been filming all day," he said. Sharon Osbourne is currently appearing as a judge and mentor in ITV1 talent show The X-Factor alongside Simon Cowell and Louis Walsh.

Earlier this year she topped a poll of the most important people in rock, for her part in guiding the career of husband Ozzy and her family. She was the driving force behind The Osbournes, which ran for three series, earning the family a reported $85m (£46m). The renewed popularity for Ozzy has seen sales of his merchandise hit the $50m (£27.2m) mark, a record for a heavy metal artist. Sales of T-shirts, accessories and action figures have rocketed since The Osbournes hit screens. At its peak, The Osbournes had a regular audience of eight million, with America's TV Guide magazine describing the series as "a cross between The Simpsons and This Is Spinal Tap". Osbourne himself was at a loss to explain its popularity: "I suppose Americans get a kick out of watching a crazy Brit family like us make complete fools of ourselves every week."
Jungle TV show ratings drop by 4m

The finale of ITV1's I'm a Celebrity... Get Me Out of Here drew an average of 10.9m viewers - about four million fewer than the previous series.

The fourth series of the show peaked on Monday at 11.9m and 49.2% of the audience, just before Joe Pasquale won. This compared with a peak of 15.3m at and a record 62.2% of the TV audience when Kerry McFadden won in February. Comic Pasquale beat former Royal butler Paul Burrell who came second, nightclub owner Fran Cosgrave, who was third. Pasquale follows Kerry McFadden, Phil Tufnell and Tony Blackburn as winners of the show.

Singer and TV presenter McFadden was the show's first female winner. When cricketer Phil Tufnell won in May 2003, 12.3 million people - 50% of the viewing public - tuned in to watch. And when Tony Blackburn won the first show in 2002, 10.9 million people saw the show. Pasquale had been the show's hottest ever favourite to win, and its hosts Anthony McPartlin and Declan Donnelly, known as Ant and Dec, said Monday's deciding vote was the closest in the programme's history.

Pascuale has been flooded with offers of TV work, according to his management company, but one of his first jobs on his return is pantomime.

Before joining I'm a Celebrity, he had signed up to play Jack in Jack and the Beanstalk in Birmingham, and tickets for the show have become increasingly popular since he joined the TV show. His manager Robert Voice said: "We've had interest from different TV producers. Some are for comedy shows, some are new-type projects. "There are a number of things Joe wants to do. He is very ambitious. "He wants to play the West End and do different things other than straightforward comedy. We are talking to a couple of West End producers about a musical."
Duran Duran show set for US TV

Chart stars Duran Duran are to appear in a VH1 special in the US including interviews and concert footage.

The show airs on Tuesday and will feature a studio performance, behind the scenes footage and fan interviews. "They seemed like a perfect fit with our audience," said Rick Krim, VH1's vice president of music and talent. The band recently released a new album, Astronaut, the first from the original line-up since 1983. They will also tour Japan and the US next year.

"When we started playing together, we didn't try and make a really sort of mature album. We just really wanted to make a great Duran Duran album," said keyboard player Nick Rhodes. "It's pretty much in line with a lot of stuff out there." Duran Duran are currently promoting the album's second single, What Happens Tomorrow.

Simon Le Bon said earlier this year that the group were not trying to update their sound too much. "We wouldn't want to lose them [older fans] by trying too hard by trying to connect with a new audience," the singer said. Le Bon also said the five members were getting on very well. "We're like any people who get very close. Sometimes you argue with each other. But the fact is we inspire each other musically. "Nobody else does it for me," he said. "It's just very special."
US show sued for rat-eating stunt

A US TV network is being sued for $2.5m (£1.3m) by a viewer who says he was disgusted by watching contestants eat dead rats in a stunt show.

Austin Aitken is taking action against NBC over its programme Fear Factor. He said watching the show caused his blood pressure to rise so high that he became dizzy and light-headed. The legal assistant said NBC was "sending the wrong message to viewers that cash can make or have people do just about anything beyond reasoning". The hand-written, four-page lawsuit said: "To have the individuals on the show eat and drink dead rats was crazy and from a viewer's point of view made me throw-up as well as another in the house at the same time." Mr Aitken, who lives in Cleveland, said that after becoming light-headed, he ran towards the bedroom and knocked his head in a doorway. A spokesman for NBC said it had no comment on the lawsuit, but confirmed the stunt show did feature a rat-eating scene in New York's Times Square on 8 November. Past shows have featured viewers eating spiders and live worms. The programme has been screened in the UK on Sky One.
Muslim group attacks TV drama 24

A British Muslim group has criticised the new series of US drama 24, which is about to be aired on Sky One, claiming it portrays Islam unfairly.

The Muslim Council of Britain has complained to broadcasting watchdog Ofcom. It says the programme breaches editorial guidelines. The group's members met with Sky executives on Tuesday after viewing previews of the first five episodes. The drama, now in its fourth series, begins on Sunday evening. The new series portrays a Muslim family as a sleeper terrorist cell. The Muslim Council of Britain said in a statement: "We are greatly concerned by the unremittingly hostile and unbalanced portrayal of Muslims in this series of 24 based upon a preview of the first five episodes that we have seen." "There is not a single positive Muslim character in the storyline to date. At a time when negative stereotypes of Muslims are on the increase we feel that Sky - as a major UK broadcaster - has a responsibility to challenge these insidious views, not help to reinforce them." But Sky denied the programme breached broadcasting guidelines. A spokesperson said: "During a useful meeting yesterday, Sky listened to the concerns raised by representatives of the council. Sky does not believe that the episodes that it has reviewed to date breach Ofcom's programme code." Fox TV, which shows the series in the US, is broadcasting public service announcements showing Muslims in a positive light after complaints about the series.
Brookside creator's Channel 4 bid

The creator of defunct TV soap Brookside has written to the culture minister to offer to buy Channel 4.

Phil Redmond, now chairman of Mersey TV, told Tessa Jowell he would run it with its current remit intact for the next 10 years. But media watchdog Ofcom has said the the commercially funded public service broadcaster will not be privatised. A spokesman for the Department for Culture, Media and Sport said there were no plans to sell the channel.

He added that primary legislation would be required for the station to be sold off, which the government was not intending to introduce. Brookside was axed in 2003 after its ratings slumped from a peak of seven million to just 1.5 million. Redmond also brought teen soap Hollyoaks to Channel 4 and created Grange Hill, the school-based drama serial which was first broadcast on BBC One in 1978. He was awarded the CBE for services to drama earlier this year.
Little Britain two top comic list

Little Britain stars Matt Lucas and David Walliams have been named the most powerful people in TV comedy, in a poll by listings magazine Radio Times.

The duo kept Phoenix Nights creator Peter Kay at number two and The Office star Ricky Gervais in third place. A Radio Times panel compiled the list, taking the comedians' critical acclaim and financial success into account. Newcomers to the annual list included Nighty Night star Julia Davis at seven and Black Books' Tamsin Greig at 19.

Lucas and Walliams won numerous awards for Little Britain in 2004, including National Television, Royal Television Society and British Comedy awards. More than 1.8 million people watched the first episode of the latest series of Little Britain on BBC Three in October, giving the digital channel its highest rating ever.

They topped the Radio Times list after rising from 10th position last year. Other big risers over the past year included presenting duo Ant and Dec at five, up from 13 in 2004, Stephen Fry rising nine places to 15 and BBC Three controller Stuart Murphy, who moves to number 18 from 32 last year. Last year's winner, chat show host Graham Norton, fell to number 16 following relatively few television appearances in 2004. Production companies also featured in the top 50, including Steve Coogan's Baby Cow, which created Nighty Night among others, Hat Trick - behind The Kumars at Number 42 - and The Vicar of Dibley production company Tiger Aspect.
South Bank Awards honour hit soap

Coronation Street has become the first soap to triumph at the South Bank Show Awards, which traditionally reward highbrow and groundbreaking culture.

The soap beat fellow ITV1 show Filthy Love and Channel 4's Shameless to win the best TV drama prize on Thursday. Little Britain was named best comedy while Franz Ferdinand beat Morrissey and The Libertines to the music award. Shane Meadows' Dead Man's Shoes picked up the best film award, beating Shaun of the Dead and My Summer of Love. The two award ceremonies reflect the achievements the industry believes have been made in the last year.

In 2004, Coronation Street pulled away from its BBC One rival EastEnders in the ratings and dominated other TV awards. Last year, the South Bank Award for best TV drama went to Steven Poliakoff's period piece The Lost Prince, while Bloody Sunday, about the 1972 killings in Northern Ireland, won in 2003. In other South Bank categories, Little Britain's second series beat Nighty Night and The Green Wing to the comedy trophy while Alan Bennett's The History Boys won in the theatre category. Author David Mitchell made up for losing out in the Booker Prize to Alan Hollinghurst by beating him to the literary award with his book Cloud Atlas. Shameless, State Of Play and Clocking Off creator Paul Abbott got a lifetime achievement award while former Grange Hill actress Amma Asante won the breakthrough award for writing and directing her first film, A Way Of Life.
Housewives lift Channel 4 ratings

The debut of US television hit Desperate Housewives has helped lift Channel 4's January audience share by 12% compared to last year.

Other successes such as Celebrity Big Brother and The Simpsons have enabled the broadcaster to surpass BBC2 for the first month since last July. However the channel's share of the audience fell from 11.2% to 9.6% last month in comparison with January 2004. Celebrity Big Brother attracted less viewers than its 2002 series.

Comedy drama Desperate Housewives managed to pull in five million viewers at one point during its run to date, attracting a quarter of the television audience. The two main television channels, BBC1 and ITV1, have both seen their monthly audience share decline in a year on year comparison for January, while Five's proportion remained the same at a slender 6.3%. Digital multi-channel TV is continuing to be the strongest area of growth, with the BBC reporting Freeview box ownership of five million, including one million sales in the last portion of 2004. Its share of the audience soared by 20% in January 2005 compared with last year, and currently stands at an average of 28.6%.
Baywatch dubbed 'worst TV import'

Surf show Baywatch has won the title of worst TV import of all time in a poll of UK television executives.

The programme, which starred David Hasselhoff and Pamela Anderson during its 12-year run, was shown in 140 countries at its height. Model Anna Nicole Smith's reality show and The Dukes of Hazzard were runners-up in the Broadcast magazine survey. The Simpsons and Dallas and 24 were among the magazine's list of the best all-time imports from the US. Soap operas Knots Landing, Falcon Crest plus The Bold And The Beautiful all made the top 10 of Transatlantic TV howlers. The Jerry Springer Show, which came in at sixth on the list, did not fare well.

Broadcast magazine said: "British TV never realised how low it could go before Jerry showed the way." Baywatch rose to the top of the list for having "mind-numbingly predictable scripts: beachgoer is saved from drowning," according to the magazine. Just inside the all-time worst top 10 came Extreme Makeover, which sees members of the public given thousands of pounds worth of plastic surgery. Other American shows which won praise were The X-Files, I Love Lucy, Twin Peaks and Star Trek.
Stern dropped from radio stations

Controversial DJ Howard Stern has been dropped from four US radio stations because he keeps promoting his move to a network broadcasting on satellite.

Cidatel Broadcasting said Stern had transformed his show into a "continuous infomercial promoting Sirius, his new satellite radio employer". Stern will join the Sirius subscription service, which is not governed by US regulators, next year. Citadel pulled Stern's show from stations in New York and Pennsylvania. Stern had been holiday for two weeks but his show did not return to the four stations as expected on 3 January. Citadel said it did not yet know whether it would return to its network.

Stern announced in October that he was leaving conventional radio, where his syndicated show goes out across the US, for the relatively restriction-free satellite service. The DJ's broadcasts are well known for landing in trouble with regulators for obscene and sexually explicit rantings. Stern was dropped by six stations owned by media giant Clear Channel in 2004 after it had to pay the Federal Communications Commission $1.75m (£950,000), over breaches indecency laws. Media giant Viacom has also reportedly agreed to the FCC's demands that if Stern is issued with another indecency violation then his show must be pulled from all of its stations. Viacom has also been hit with record fines of $3.5m (£1.8m) over Stern and two other New York DJs. But Stern continues to be one of the most popular talk show hosts, particularly in the 25-54 age category.
US TV host Clark suffers stroke

Veteran US television host Dick Clark is in hospital in Los Angeles after suffering a mild stroke.

The 75-year-old presented long-running show American Bandstand from 1956-87 and has since hosted game shows and produced award ceremonies. Clark is scheduled to welcome in the New Year on the ABC network, a job he has done for 33 years. The presenter said that he is "hopeful" of getting better in time to lead the festivities in New York's Times Square. Clark's publicist Paul Shefrin said the television host was "recovering" and there was no cause for alarm. Clark, who produces the Golden Globe and American Music Awards, disclosed last year that he was suffering from diabetes.

His popular music show American Bandstand was first broadcast in 1952, and attracted an audience of 20 million people after it was picked up by ABC in 1957. The long-running weekly series, which featured guests including Elvis Presley, Buddy Holly and Aretha Frankin, came to an end in 1989. Clark was inducted into the Rock and Roll Hall of Fame in 1993 for his contribution to the music industry. He has also been responsible for television series such as TV Bloopers, Celebrity Boxing and drama American Dreams. Clark is also expected to act as executive producer for the upcoming Golden Globe Awards ceremony, which is taking place on 16 January.
New media battle for Bafta awards

The BBC leads the nominations for the Bafta Interactive Awards, including one for the Radio Times website and one for Sport Interactive's Euro 2004 coverage.

The awards, which were started in 1997, recognise the best websites, digital TV shows and CD roms. Other nominees include The Guardian news website, the National Theatre, MTV, the Science Museum and the London Stock Exchange. The winners from 12 different categories are crowned on 2 March 2005. There were nearly 400 entries this year - a third more than last year. The BBC has 16 nominations while The Guardian has three nominations.

"This year's nominees are a testament to the creative and innovative work going on within the industry," said Grant Dean, chair of the interactive committee. Categories include interactive TV, film, digital TV, mobile phones and music. Shaun of the Dead, Oasis' Definitely Maybe, Really Bend It Like Beckham, The Chaplin Collection and The Day Today will battle it out in the DVD category.

ITV's Great British Spelling Test takes on the BBC's Olympics and Spooks Interactive for the interactive TV award. And the Guardian takes three of a possible five nominations in the news and sport category for its website coverage of Euro 2004, the Tour de France and the US elections. The BBC's iCan site is up for the technical and social innovation award alongside the likes of Nottingham University's Uncle Roy All Around You. In 2002, the British Academy of Film and Television decided to split the awards into separate games and interactive ceremonies, to fully cover the range of innovation outside the gaming industry.
School tribute for TV host Carson

More than 1,000 people turned out on Sunday to pay tribute to late US TV presenter Johnny Carson in the Nebraska town where he grew up.

Carson, who hosted the Tonight Show for 30 years, died on 23 January from respiratory disease emphysema. He lived in Norfolk, Nebraska from the age of eight until he joined the Navy, but returned regularly and donated $5m (£2.7m) to local causes. Old school friends were among the crowd at the school's Johnny Carson Theater.

Carson, who was one of the best-loved TV personalities in the US, asked not to have a public memorial in Los Angeles, where he lived in later life. He began his showbusiness career in Norfolk, performing magic under the name The Great Carsoni from the age of 14. His donations included $600,000 to Norfolk High School in the 1980s to build a new performing arts centre. When Carson died, President Bush led the public tributes, saying the presenter "had a profound influence on American life and entertainment".
Singer Ferguson 'facing eviction'

Three Degrees star Sheila Ferguson is the favourite to be evicted from ITV's I'm A Celebrity... Get Me Out Of Here on Monday.

Bookmakers Ladbrokes says the singer has even odds of being the first contestant to be voted off the show. "It's going to be close but Sheila is favourite as she has shown herself to be a bit of a troublemaker," said Ladbrokes' Warren Lush. Comic Joe Pasquale remains odds on favourite to win the reality show. Mr Lush added that Nancy Sorrell's chances of an early departure had increased since the surprise arrival of husband Vic Reeves in the jungle camp last Wednesday. Notwithstanding, comedian Reeves remains 3/1 favourite to win the show, after Pasquale.

Huggy Bear actor Antonio Fargas also remains a contender for eviction having "done nothing to live up to the pre-show hype". "There has been a big gamble on Natalie [Appleton] to go... but bookies fancy the millions at home will keep piling on the misery by putting her through more bushtucker trials," added Mr Lush. The former All Saint star has performed dismally in bushtucker trials which have seen her plunged into glass tanks containing putrid waste and challenged to eat fish eyes. On Friday, Ladbrokes suspended betting after singer Brian Harvey quit the show folllowing a blazing row with Janet Street-Porter. Harvey, who entered the camp a day later than other contestants after learning that his grandmother had died, reached the end of his tether following days of meagre rations and rows.
Farrell due to make US TV debut

Actor Colin Farrell is to make his debut on US television in medical sitcom Scrubs, according to Hollywood newspaper Daily Variety.

The film star, who recently played the title role in historical blockbuster Alexander, will make a cameo appearance as an unruly Irishman. The episode featuring the 28-year-old will be screened on 25 January. Farrell's appearance is said to be a result of his friendship with Zach Braff, who stars in the programme. It will be the actor's first appearance on the small screen since he appeared in BBC series Ballykissangel in 1999. The gentle Sunday night drama came to an end in 2001.

He has since become one of Hollywood's fastest-rising stars, with a string roles in major league films such as Minority Report, Phone Booth and Daredevil. Farrell is pencilled in to play the role of Crockett in a film version of 1980s police drama Miami Vice. Scrubs, which appears on the NBC network in the US and has been shown on Channel 4 on British television, is an off-beat comedy about a group of hospital doctors. Other film stars to have appeared in Scrubs include Heather Graham, while Friends actor Matthew Perry has guest-starred and directed an episode of the show. Its leading star, Zach Braff, has recently been seen on the big screen in Garden State, which he also directed.
Stallone evicted from Big Brother

Jackie Stallone, mother of actor Sylvester, has become the first star to be evicted from Celebrity Big Brother.

She and John McCririck faced the public vote on Friday - 67% of people voted to keep the racing pundit in the house. Stallone, 71, appeared not to have enjoyed her time in the house saying: "I'm a total wreck, I need a vacation, this was a nightmare". But she was pleased to have patched things up with actress Brigitte Nielsen, her former daughter-in-law. "That alone was worth $1m," she said. Stallone joined the Channel 4 show on Monday as a surprise for Nielsen. She was hot favourite to be evicted first, with odds of 1/4 to leave.

But McCririck has made some enemies with his outspoken views about women. Ladbrokes spokesman Warren Lush said: "We may have underestimated the power of the anti-McCririck brigade, but it's so hard to call with him, there are people out there who either love him or hate him, there is no middle ground." The bookmakers have made former Happy Mondays dancer Bez favourite to win the show at 7/4, while Blazin' Squad singer Kenzie is second at 2/1. "Bez has wooed the viewers and looks the one to beat, he's kept his nose clean and doesn't take anything too seriously," Mr Lush said. Earlier on Friday 15 protesters from the Fathers 4 Justice campaign group were arrested after entering the Big Brother compound at 0300 GMT and throwing fireworks. Feminist icon Germaine Greer quit the show earlier in the week over what she called "bullying" tactics used by the programme's producers. The show is currently attracting an average audience of about 4.2 million viewers a night.
Fox 'too reliant on reality TV'

The head of US TV network Fox has admitted the broadcaster had relied too heavily on reality TV shows such as the poor-rating Who's Your Daddy.

Chief executive Gail Berman said "in the case of this fall we drifted to too much on the unscripted side". The series Who's Your Daddy, where a young woman tries to pick her natural father for a cash prize caused outrage from adoption groups and rated badly. Last season, Fox's prime-time audience fell by 600,000 to 5.9 million. Ms Berman said: "I think the audience expects loud things from Fox. Sometimes they work, and sometimes they don't."

Who's Your Daddy, the first episode of which was shown on 3 January, pulled in a disappointing audience of 6.3 million, according to the Nielsen ratings system. Five other episodes of the show had also been filmed will be dropped from Fox's schedules, Ms Berman said. She was predicting a drop in ratings even for some of the network's established reality shows, such as American Idol, which is due to start its fourth series this week. Fox had unveiled a new strategy last year promising to launch new shows every season, including the traditionally quiet summer season. Though that had met with a poor reception, Ms Berman said "there's no question that the audience, in our mind, is ready, willing and able to accept new programming in the summer". Fox has changed this plan, launching new shows in May instead of June. One of the new shows will be the animated series American Dad, made by Seth MacFarlane, the creator of Family Guy. That series, after becoming a hit on DVD, is also set to return with new episodes.
George Michael to perform for BBC

George Michael is to perform live at London's Abbey Road studios as part of a BBC Radio 2 special next month.

The session, which will broadcast on 18 December, will also see him talk about how his biggest hits came about. Michael's appearance is part of the station's Sold on Song initiative, which explores the art of songwriting. The station also confirmed that Chris Tarrant will be hosting a one-off New Year's Eve programme. He left London's Capital FM this year after 17 years. The former breakfast show host - who attracted some of the highest ratings in Britain, despite only broadcasting to London - will offer his own individual take on the year in the two-hour show. "This should be great fun," Tarrant said. "I've had a fantastic year and I know that lots of other people have as well. I'm definitely looking forward to being on Radio 2." Other Christmas specials from Radio 2 include singer Jamelia hosting a Christmas Day concert from the London Community Gospel Choir, while actor Christopher Lee will read Fireside Tales from the likes of Edgar Allan Poe, E Nesbit and Ambrose Bierce. Comedian Harry Hill will host a spoof nostalgia show on Christmas Day, while singer Jamie Cullum will perform a live concert for the station.
Joy Division story to become film

The life of late Joy Division singer Ian Curtis is to be made into a film, it has been announced.

The Manchester-based production is called Touching From A Distance, after a book by Curtis's widow Deborah which forms the basis for the film. Music mogul Tony Wilson, who headed the record company Joy Division were signed to, will be co-executive producer. The musician committed suicide in 1980 aged 23, shortly before the band were due to go on tour in the US. Mr Wilson, who has remained friends with Curtis's widow and daughter Natalie, who he says asked for his involvement to make the film "official". "People have different ideas as to why Ian committed suicide, so maybe the film will reflect those different views," he told the BBC News website.

Plans for a separate Joy Division film had been announced at the Cannes Film Festival earlier this year, but the project did not get off the ground as it failed to get the backing of Curtis's family. Mr Wilson, who was also involved with Joy Division's sucessor band New Order, as well as the Happy Mondays, said he would "rather not" appear in the film. He made a cameo appearance in 24 Hour Party People, in which his leading role was played by Steve Coogan. "I'm not an actor and I did a lousy job playing my part in 24 Hour Party People," said the Factory Records founder, who has been associated with the Manchester music scene since the 1970s. "Film people have a tendency to mess up when they touch music, but I hope this one works.

"This is much more than the music - they want to do the real story of Ian," he said. The film is to be directed by Dutch-born Anton Corbijn, who has made music movies for Depeche Mode and U2. It will be produced by a US production company, while the widow of Ian Curtis will also be an executive producer.
Aaliyah claim dismissed by court

Late R&B star Aaliyah's record company has failed in an attempt to sue the video producer who booked the ill-fated flight on which she died in 2001.

A New York appeals court has told Blackground Records that only the singer's parents had the right to launch a claim for wrongful death. The 22-year-old singer's family came to an undisclosed settlement over a negligence claim in 2003. Aaliyah had completed a music video when the plane crashed in the Bahamas. She and eight others were killed on the plane, which crashed as if left for Florida. Blackground Records' lawyer Frank Penski said he had yet to examine the decision and did not know whether they would pursue the case.

An investigation into the crash revealed the twin-engined Cessna was overloaded by 700 pounds (320kg). A post-mortem carried out on the remains of the pilot showed there was cocaine and alcohol in his body. Aaliyah was a rising star in music and film before she was killed. She was honoured with a string of posthumous awards and her single More Than A Woman went to number one in the UK.
Connick Jr to lead Broadway show

Singer and actor Harry Connick Jr is to star in a Broadway revival of 1950s hit musical The Pajama Game.

He will play the supervisor of a US pyjama factory who has a romance with a union activist during labour unrest. Jeffrey Richards, the show's co-producer, said Connick was "an actor of enormous charisma and skill, a wonderful singer and a bona fide star". He has recently starred in hit US comedy Will and Grace as the husband of Grace, played by Debra Messing. The musical will open in November, said Mr Richards, who added that no other casting had been announced yet.

The original book by George Abbott and Richard Bissell will be revised by playwright Peter Ackerman, who co-wrote the screenplay for the movie Ice Age. It has a score by Richard Adler and Jerry Ross, and Adler is writing two new songs for the score, which includes numbers including Hey There, Small Talk and Steam Heat. Connick appeared with his band on Broadway in 1990, and he wrote the score for a musical based on Emile Zola's novel Therese Raquin, called Thou Shalt Not. It had a three-month run on Broadway in 2001.
Elvis fans hold birthday bash

Elvis fans around the world have been marking the legendary singer's 70th birthday on Saturday.

A three-day Elvis convention took place in Blackpool, England, over the weekend with the aim of finding the best European Elvis impersonator. His Graceland, Tennessee, home was the focus for US celebrations with four days of events including a concert by the Memphis Symphony Orchestra. Elvis' single Jailhouse Rock became the UK's number one on Sunday. Fans in France celebrated with a tribute concert by Elvis cover bands and a special exhibition of memorabilia is on display in Bonn, Germany.

Jailhouse Rock is now the 999th number one single in UK pop history. Record company SonyBMG are releasing Elvis' 18 number one singles at the rate of one a week in Britain, complete with original artwork and a collector's box. Hit single One Night will follow next week - with the chance of becoming the 1,000th number one as interest surrounding Elvis' birthday grows. HMV spokesman Gennaro Castaldo said: "It would be a fantastic and truly fitting way to celebrate Elvis' landmark birthday."
Elvis regains top chart position

Elvis Presley has scored his 19th number one single in the UK charts with the re-release of Jailhouse Rock, 27 years after his death.

Elvis knocked X Factor winner Steve Brookstein down into second place after three weeks in the charts. In at number three was Iron Maiden for the Number Of The Beast and Erasure entered the chart at four with Breathe. Elvis's number one is the 999th in chart history and comes the day after what would have been his 70th birthday. Fans around the world held tribute events for the singer on Saturday, ranging from concerts to memorabilia exhibitions. Meanwhile, a poll carried out by royalty payments group the Performing Right Society found that The Wonder of You is the Elvis song most performed by live bands and tribute acts.

Record company SonyBMG are releasing Elvis's 18 number one singles at the rate of one a week in Britain, complete with original artwork and a collector's box. Hit single One Night will follow next week - with the chance of becoming the 1,000th number one as interest surrounding Elvis's birthday grows. Elsewhere in the singles charts, the Scissor Sisters went straight in at number five with Filthy/Gorgeous. Band Aid 20 slipped to six after seven weeks in the chart with Do They Know It's Christmas. The other two new entries are Dana Rayne with Object of My Desire at seven and Kasabian who are at number eight with Cut Off. Making up the top 10 are Boulevard of Broken Dreams by Green Day, down three places to number nine, and Out of Touch by Uniting Nations, also down three places to 10. In the album charts, the Scissor Sisters went to number one with their self-titled release, knocking Green Day's American Idiot to third place. The Killers' album Hot Fuss moved up three to number two.
Pop band Busted to 'take a break'

Chart-topping pop band Busted have confirmed that they plan to "take a break", following rumours that they were on the verge of splitting.

A statement from the band's record company Universal said frontman Charlie Simpson planned to spend some time working with his other band, Fightstar. However they said that Busted would "reconvene in due course". The band have had eight top three hits, including four number ones, since they first hit the charts in 2002. Their singles include What I Go To School For, Year 3000, Crashed The Wedding, You Said No, and Who's David?

The band, which also includes members Matt Jay and James Bourne, made the top ten with their self-titled debut album, as well as the follow-up, A Present For Everyone, in 2003. They won best pop act and best breakthrough act at the 2004 Brit Awards and were nominated for best British group. Most recently they topped the charts with the theme from the live-action film version of Thunderbirds, which was voted Record Of The Year on the ITV1 show. The band have capitalised on a craze for artists playing catchy pop music with rock overtones. The trio are seen as an alternative to more manufactured artists who are not considered credible musicians because they do not write their own songs or play their own instruments. However, recent rumours have suggested that Simpson has been wanting to quit the band to focus on Fightstar. He now plans to take Fightstar on tour.
Singer Knight backs anti-gun song

R&B star Beverley Knight said she sang on an anti-gun single after being "haunted" by the fatal 2003 shooting of two teenage girls in Birmingham.

Knight and drum 'n' bass star Roni Size have released No More in a bid to reduce gun use among young people. She said she was "horrified" by the deaths of Charlene Ellis, 18, and Letisha Shakespeare, 17. Size, whose New Forms album won the 1997 Mercury Music Prize, said gun use was "nothing to be glamorised".

There were more than 10,500 firearms offences and 70 gun crime deaths in England and Wales between June 2003 and 2004, according to Home Office figures. Knight said the scale of the problem became clear to her after the 2003 shootings in Aston, near Knight's Birmingham home.

"It haunted me to be honest, it haunted my sleep," she said. Size became involved after two friends, Donna Small and Asha Jama, were shot in his Bristol hometown in October. Jama, 25, lost her sight in one eye while 22-year-old Small suffered serious head injuries. Size said he collaborated on the single, which was released on Monday, because he has "a bird's eye view of what's going on". "Over the last 10 years, I have seen a lot of things happen and it is nothing to be glamorised, it really isn't," he said.
Portishead back after eight years

Cult British group Portishead have revealed they are writing their third album, their first in eight years.

Founding member Geoff Barrow told BBC 6 Music the record was well on the way to being completed. "We're actually into it as we speak. We took some time off for Christmas, but generally we're doing another record," Barrow told the digital radio station. News of their album plans comes after confirmation the Bristol band will play a tsunami charity show next month. Portishead will play alongside fellow Bristol band Massive Attack at Oxfam's Tsumani appeal, held at the Bristol Academy on 19 February. Barrow said he was surprised people thought the band, who won a Mercury Music Prize in 1995 for their debut album Dummy, had split up.

"We've just had our heads down really, we've never actually broken up, or parted, or whatever. "So for us it just seems, even though we haven't played for years, we still see each other and write - we just haven't released a record for a long time." Portishead will not play any new material at next month's concert, which will feature singer Beth Gibbons playing with an acoustic backing. Other acts appearing include Liverpool band The Coral and former Led Zeppelin singer Robert Plant. Portishead became an international success and a deeply influential band despite their scant recorded output. Dummy was a critics' favourite in 1994, hailed for its blend of menacing sounds and hip-hop beats married to old soul samples. The follow up, Portishead, was released three years later.
Elvis 'set for chart hat-trick'

The late US legend Elvis Presley is likely to score his third UK number one single in three weeks on Sunday, according to early sales figures.

The king of rock 'n' roll has already had consecutive chart-toppers with Jailhouse Rock and One Night. A Fool Such As I, the next in a series of 18 reissues, is on course to beat the Chemical Brothers to the top. But his next single, It's Now Or Never, will face a challenge from tsunami charity single Grief Never Grows Old. Sir Cliff Richard, Russell Watson, Boy George, Bill Wyman and members of the Bee Gees, the Beach Boys, America and the Eagles are expected to feature on the charity song.

Bookmakers have offered odds of 10/1 for all Presley's 18 hits to go back to number one. A Fool Such As I would become the 1,001st number one single in UK chart history after One Night took the 1,000th place on Sunday. The latest release is currently outselling the Chemical Brothers' comeback single Galvanize plus other new releases from Athlete, Ciara and Feeder. Presley's 18 original number ones are being reissued as limited release singles, with fans eager to buy the set to fill a collector's box that went on sale in the first week. Record company Sony BMG is now manufacturing 5,000 more copies of each single than originally planned to meet demand, taking the total number of copies of each song on sale to about 28,000.
Youssou N'Dour wins music prize

Senegalese musician Youssou N'Dour has been named a winner of a BBC Radio 3 World Music Award.

His album Egypt won the critics' award for album of the year, while the best newcomer accolade went to Argentine Chango Spasiuk. Winners were chosen from ten categories to reflect different continents. A special Poll Winners concert, hosted by Eliza Carthy and Benjamin Zephaniah will take place at The Sage in Gateshead on 5 March.

The concert will be broadcast on Radio 3's World Music Day the following evening and will feature performances by many of the award winners. It will also include the announcement of the Audience Award, chosen by Radio 3 and BBC World Service listeners, alongside BBC Four viewers.

Winner in the Africa category was Malian desert blues band Tinariwen, formed from the nomadic people of the southern Sahara. Cuban pianist Bebo Valdes and flamenco singer Diego El Cigala, responsible for critically acclaimed album Lagrimas Negrasmusic, won an award in the "boundary crossing" category. Each winner will receive a specially commissioned sculpture entitled Planet by Anita Sulimanovic who won a competition to design the award. Highlights of the Poll Winners Concert, to be held at The Sage, Gateshead, will be televised on BBC Four on 11 March.
TOTP turns to Elvis impersonator

Top of the Pops has turned to the star of Elvis Presley musical Jailhouse Rock after the late rock legend scooped the UK's 1,000th number one single.

Mario Kombou, who plays the Presley role on stage, will sing One Night on Friday's BBC One show as producers are unable to use Presley video footage. It is his second number one in a row. The show used Presley photos last week. Presley will feature in the charts for several more months as all 18 of his original UK chart-toppers are reissued.

A Top of the Pops spokesperson said: "It's a very special number one as it's the UK's 1,000th. "We wanted to pay tribute to Elvis in the best way we knew how, so we thought getting a professional would be the best way for Top of the Pops to do that." Kombou is likely to appear on the show again next week as the next Presley re-release, A Fool Such As I, is on course to give him his third number one in three weeks. Kombou plays Vince Everett in Jailhouse Rock - the same role Presley played in the 1957 film of the same name.
Blue beat U2 to top France honour

Irish band U2 have been honoured at France's biggest music awards, but were beaten to a prize by boy band Blue.

U2 received a special achievement prize at the NRJ Music Awards, but Blue beat them to the international group award. US band Maroon 5 was named best new international artist, and took the best international song title for This Love. More than five million radio listeners voted in the awards. The international male and female prizes went to Usher and Avril Lavigne respectively. Collecting his band's award from model Naomi Campbell at the Cannes ceremony, U2 frontman Bono said in French: "I'm not from this country but I'll make a little confession to you - it's at the Cote d'Azur I feel at home."

Hosted by radio group NRJ, the ceremony featured performances from Usher and Jennifer Lopez, who was accompanied by dancers clad in schoolgirl outfits. US pop act Black Eyed Peas picked up the best international album gong for Elephunk. Singer Jenifer also took home two awards, for best French female singer and best French album. French-Canadian pop star Roch Voisine was named best Francophone male artist.
Singer Sizzla jailed for swearing

Reggae star Sizzla, whose UK tour was cancelled after protests at his "anti-gay" lyrics, has been jailed in Jamaica for swearing on stage.

The singer must serve 15 days in prison after he consistently swore during a concert in St Thomas, Jamaica, in January despite warnings by police. He was charged under a law which prohibits indecent dress or expression. Sizzla's five-date UK tour was cancelled last November after protests by gay rights campaigners.

Sizzla, whose real name is Miguel Collins, has released 25 albums since 1995 and is credited with taking dancehall music back to its reggae origins. Many Jamaican entertainers have appeared before the courts for use of profanity in recent years but they usually receive a verbal warning, a suspended sentence or community service. Sizzla's UK tour was cancelled after Scotland Yard's Racial and Violent Crime taskforce announced it was examining lyrics by eight reggae artists. It would not confirm that Sizzla was among them. One of his most controversial songs, Pump Up, contains the Jamaican patois lyrics "fire fi di man dem weh go ride man behind", translated by gay rights group OutRage! as "burn the men who have sex with men".
Spears seeks aborted tour payment

Singer Britney Spears is suing eight insurance companies that have refused to reimburse her for cancelling her 2004 world tour.

The pop star cancelled her Onyx Hotel tour last June after suffering a knee injury during a video shoot. She is now seeking to be reimbursed for the tour's £5m ($9.3m) costs in a claim filed at New York State Supreme Court. Seven London-based companies and an eighth Paris firm have been given up to 30 days to respond to the complaint.

The 22-year-old star initially missed a number of shows on the 82-date tour after injuring her knee during a show in Illinois last March. But she was rushed to hospital and needed surgery after a later incident while filming a video for her song Outrageous, leading her to cancel the rest of the tour, including dates in China. "She obviously took a wrong step and blew out her knee," a Jive spokeswoman said at the time. "It was an old dance injury." The legal submission described Spears as "one of the most recognised performers in her industry". The Onyx Hotel tour was cited as "a highly crafted production which included the well-known music and dancing of Spears, supported by elaborate costumes, complex choreography as well as cutting-edge video production, lighting and other effects". In September Spears married Kevin Federline, who had been a dancer on the aborted tour.
Soul sensation ready for awards

South West teenage singing sensation, Joss Stone, has been nominated in three categories in Wednesday's Brit awards.

The 17-year-old from a small east Devon village near Cullumpton, received nominations for Best Solo Female, Best Urban Act and Best Breakthrough Artist. Her second album Mind, Body & Soul reached number one in the UK charts last October and went straight into the US charts at number 11. Ms Stone is due to perform at the 25th award ceremony at London's Earls Court. The teenager also has Grammy nominations in the US, normally dominated by home-grown acts. Born Jocelyn Stoker, the Devon diva started her career in a BBC talent programme, and was then discovered at a New York audition by a US record executive, Steve Greenberg. The 17-year-old singer is hoping to tour in Japan, Australia and the US in 2005.
Prince crowned 'top music earner'

Prince earned more than any other pop star in 2004, beating artists such Madonna and Elton John in US magazine Rolling Stone's annual list.

The singer banked $56.5m (£30.4m) from concerts, album and publishing sales with his Musicology tour and album. He kept Madonna in second place, as she earned $54.9m (£29.5m) while embarking on her global Re-Invention Tour. Veterans Simon and Garfunkel were in 10th place, their comeback tour helping them earn $24.9m (£13.4m) last year.

"Prince returned to centre stage after a decade in the commercial wilderness," the magazine reported. The singer's 2004 tour took $90.3m (£48.5m) in ticket sales and he sold 1.9 million copies of his latest album Musicology.

Although she grossed more than Prince last year, Madonna remained in second place because of the "monumental" production costs of her tour. Heavy metal band Metallica's Madly in Anger with the World tour helped push their 2004 earnings up to $43.1m (£23.1m). They were ahead of Sir Elton John, who took fourth place and almost $42.7m (£23m) from performances including a debut on the Las Vegas Strip. Other seasoned performers in the list included Rod Stewart, whose sold-out shows and third volume of The Great American Songbook covers album helped net him £35m (£19m). The highest-ranking rap act in the list was 50 Cent, who at number 19 took $24m (£13m) to the bank.
Rock star sued by ex-girlfriend

Motley Crue guitarist Mick Mars is being sued by his ex-girlfriend for $10 million (£5.4 million), claiming he broke a promise to take care of her.

The woman, Robin Mantooth, said Mars promised her repeatedly that he would provide financial support in the event of the couple breaking up. When they split in December, Mantooth says Mars denied any such agreement. She is asking a Los Angeles court to award her half the musician's property, a monthly allowance and damages. Mantooth added that the pair became lovers in 1990, after which she abandoned her career as a documentary film-maker to move in with the guitarist at his Malibu home.

She is also claiming that Mars, 53, has failed to provide her with any material support since they ceased to be a couple. Motley Crue recently reunited after being apart for a period of five years. They originally formed in the early 1980s and scored six hits in the UK, including Girls Girls Girls in 1987. They are embarking on a world tour later this year which will take in 60 cities across the US, Europe, Asia and Australia. Mars - real name Bob Allen Deal - underwent hip replacement surgery in October. He suffers from a degenerative rheumatic disease which causes ligaments and tendons to attach to the bone.
Row threatens Hendrix museum plan

Proposals to open a museum dedicated to Jimi Hendrix are flailing because of a row over the home of his late father.

The run-down house in Seattle has already been moved wholesale once and local authorities are now demanding it be moved to another site. Hendrix supporters hoped to turn the home into a museum for the guitarist. "The mayor is going to go down as the mayor who destroyed Jimi Hendrix's house," said Ray Rae Marshall of the James Marshall Hendrix Foundation. The foundation moved the building, in which Al Hendrix lived between 1953 and 1956, when the land it was built on was to be developed for housing in 2002. Now the City of Seattle wants its new plot to be used for development, giving a deadline of 22 February for the home to be moved. Mr Goldman said the authority had promised the house could remain on its new site and be turned into a memorial and community centre. Seattle officials said no such deal had been offered.

"We never said, 'You can own this property,'" said John Franklin, chief of its operations department. "From our perspective, it was a temporary situation. We have not threatened to demolish the house. We've simply asked that they have to move it." Now Mr Goldman is calling for the authority to pay to move the building to Seattle's central district, where Hendrix grew up. Janie Hendrix, the guitarist's stepsister, said the family were still hoping the guitarist would be honoured by having a road named after him. "That's something my father really wanted to see," she said. "It would be nice if we didn't have to fight for everything to get it." Hendrix was widely considered one of the most important guitarists of his time. He died of drug overdose in 1970 at the age of 27.
Singer Christina Aguilera to wed

Pop star Christina Aguilera is to marry music executive Jordan Bratman, the singer's agent has confirmed.

Bratman, 26, proposed to Grammy-winning singer Aguilera, 23, on holiday at an undisclosed location. The pair have been together for more than two years. "No wedding plans have been set yet," said Aguilera's agent Meghan Prophet. Aguilera burst onto the pop scene in 1999, winning a best new artist Grammy in 2000. Her hits include What a Girl Wants, Dirrty and Beautiful. Bratman presented his fiancee with a diamond ring designed by jeweller Stephen Webster on Friday, said Ms Prophet. New York-born Aguilera reached number one in the UK with her debut hit Genie in a Bottle in October 1999. Her early success was cemented by two further Grammys in subsequent years. In 2002, Aguilera won best pop collaboration for the hit track Lady Marmalade with Lil' Kim, Maya and Pink, and last year she picked up the award for best female pop vocal performance for Beautiful. Her most recent single, Car Wash, featuring Missy Elliott, reached number four in the UK charts last November.
Brits return Keane to number one

Brits success has helped return Keane's award-winning album Hopes and Fears back to the top of the UK album chart.

The debut album, which took the best British album title at the Brits on Tuesday, moved up seven places from number eight to number one. Also capitalising on Brits success were the Scissor Sisters whose eponymous album moved three places to number two. U2's latest single Sometimes You Can't Make It On Your Own took the top spot in the singles chart, ahead of Elvis. The track, from their current album How To Dismantle An Atomic Bomb, pushed Eminem's Like Toy Soldiers from number one to number three.

Elvis' Wooden Heart, which entered the chart at number two, is the sixth in a series of 18 reissues to mark the 70th anniversary of Presley's birth. There are currently six re-released Elvis' tracks occupying spots in the top 40 singles chart including Are You Lonesome Tonight at number 20, It's Now or Never at number 27 and Jailhouse Rock at number 37. Soldier, by Destiny's Child, Ti and Lil Wayne, debuted at number four, while Almost Here, the duet from former Westlife star Brian McFadden and Delta Goodrem, fell from number three to number five. There was more follow up to Brits success for Franz Ferdinand won best rock act and best British group last week. Their self-titled album moved from 13 to number four. Last week's number one album Tourist, by Athlete, fell to number three.
Abba reunite for musical premiere

The original stars of Swedish pop quartet Abba have reunited for the home premiere of hit musical Mamma Mia! which is based on the band's songs.

It is the first time in almost 20 years that the four, Bjorn Ulvaeus, Benny Andersson, Agnetha Faltskog and Anni-Frid Lyngstad, have met publicly. Faltskog has been a virtual recluse since the band split up in 1982. The musical, which has become a global phenomenon, will be performed in Swedish for the first time. Fans camped outside Stockholm's Cirkus theatre in the snow for a glimpse of the stars. The premiere marks Abba's first public reunion since the legendary band's acrimonious break-up in the early 1980s. It was thought that Faltskog would appear in London for the musical's fifth anniversary celebrations in April 2004 but she stayed away due to her fear of flying.

Original Abba member Bjorn Ulvaeus set about translating the musical into the band's mother tongue for the celebrated homecoming, alongside Swedish artist Niklas Stromstedt. Almost all of Abba's original songs, which have sold more than 350 million records worldwide, were written and recorded in English. The musical, set on a small Greek island, tells of the story of a young woman and her fiercely independent single mother. The show will include such classics as Super Trouper, SOS and Dancing Queen. There are currently 14 productions being staged worldwide, including New York and London, with road shows in Toronto, South Korea and Madrid. More than 20 million people around the world have seen the show.
Help for indies in download sales

A campaign has been launched to help independent labels get their music online and benefit from the growing trend for downloading music.

The British Phonographic Industry has identified a lack of independent music available for download. "We want to ensure that independent repertoire is as successful in the download world as it is in the physical world," said BPI chief Peter Jamieson. Downloaded singles have now overtaken physical singles in the UK. Mr Jamieson said his organisation was lobbying music service providers, which include iTunes and Napster, to urge them to promote independent releases. Download sales are due to be incorporated into the UK singles chart later this year. "With downloads shortly to be eligible for the singles chart, this is a key commercial issue on which the BPI committed to assisting its members," added Mr Jamieson. As part of the campaign the BPI is running a series of seminars entitled Getting Your Music Online, focusing on how independent labels can embrace digital music. The US has already begun incorporating download sales in the Billboard's Hot 100 chart.
T in the Park sells out in days

Tickets for Scotland's biggest music festival have sold out in record time, five months before the event is held.

The 12th annual T in the Park festival, which takes place at Balado near Kinross in July, sold out just four days after the line-up was announced. Green Day, the Foo Fighters and Keane are among the acts that had already been lined up to appear at the event. However, the organisers have revealed Scots favourites Travis as well as soulman James Brown will also appear.

Last year tickets sold out 10 weeks before the festival but organisers confirmed that all 130,000 for the two-day event had been sold. Geoff Ellis, CEO of festival organisers Big Day Out Ltd, said this year's event promises to be the best yet. "After last year's sell-out, we did think this year's event would sell slightly earlier, however this is way beyond our expectations," Mr Ellis said.

"We are extremely proud that fans are so excited about T in the Park that they have made absolutely sure that their place at Balado is booked for 2005, and we will deliver one of the greatest events yet for them in July." More than 120 acts will play on eight stages over the weekend of 9 and 10 July. Brit Award winners Keane and The Streets are among the main attractions, while The Killers and dance act The Prodigy are also on the bill. Both Green Day and The Foo Fighters last played at the festival in 2002, the same year Oasis and Basement Jaxx were among the headline acts.
Michael film signals 'retirement'

Singer George Michael has said that a new film about his life is the start of a retirement from public view.

The pop star said it would be a much more "behind the scenes affair", and called his own genre of music "dead". "I thought I should explain myself before I disappear," said Michael, who was at the Berlin film festival to launch the documentary. The film, A Different Story, chronicles Michael's life and career from the 1980s and his personal struggles. The 41-year-old chart-topper told reporters in the German capital that he wanted to "move his career into a different form", but added that he does not know what it is going to be yet.

"I'm still going to be making music," he said, but added that he was "not going to be around". He hinted at discontent with the current state of music industry, and said: "I don't really think that there is anyone in the modern pop business who I feel I want to spar with." Michael said that the film, directed by Southan Morris, would put his two decades of fame into context. "It's almost as much for me as for my fans, in terms of trying to make sense of the last 22 years and bring it to a close in a proper way," he said. The documentary chronicles the highs and lows of his life in the public gaze, from his meteoric rise as one half of pop duo Wham! to his arrest for lewd conduct in a Los Angeles toilet in 1998. The film also deals with the loss of Michael's partner Anselmo Feleppa from an Aids-related condition in 1993. A Different Story, which is being shown at the Berlin Film Festival, has been screened by BBC One.
Hendrix guitar fetches £100,000

A much-loved guitar belonging to Jimi Hendrix has been sold for £100,000 at an auction in London.

The 1965 Fender Stratocaster was one of a number of guitars included in the sale dedicated to the rock legend. The vast archive of instruments, signed records and posters were collected by a dedicated fan who had become friendly with the star. The auction was billed as the biggest collection of Hendrix memorabilia to go under the hammer. The majority of the items were collected by fan Bob Terry who began collecting at the age of 17. He later sold it on to another collector.

Hendrix, widely considered one of the best guitarists of his era, died of a drug overdose in 1970 at the age of 27. The 1965 Fender Stratocaster was used by the musician on tour and in his studio. A poem written by Hendrix two weeks after his infamous appearance at the Monterey Festival where he set light to his guitar went for £10,000. The Jimi Hendrix Experience's first single Hey Joe, signed by all the band, was sold for £2,000. The sale, hosted by auctioneers Cooper Owen, was held at the Hard Rock Cafe in London.
Musical treatment for Capra film

The classic film It's A Wonderful Life is to be turned into a musical by the producer of the controversial hit show Jerry Springer - The Opera.

Frank Capra's 1946 movie starring James Stewart, is being turned into a £7m musical by producer Jon Thoday. He is working with Steve Brown, who wrote the award-winning musical Spend Spend Spend. A spokeswoman said the plans were in the "very early stages", with no cast, opening date or theatre announced.

A series of workshops have been held in London, and on Wednesday a cast of singers unveiled the musical to a select group of potential investors. Mr Thoday said the idea of turning the film into a musical had been an ambition of his for almost 20 years. It's a Wonderful Life was based on a short story, The Greatest Gift, by Philip van Doren Stern. Mr Thoday managed to buy the rights to the story from Van Doren Stern's family in 1999, following Mr Brown's success with Spend Spend Spend. He later secured the film rights from Paramount, enabling them to use the title It's A Wonderful Life.
Famed music director Viotti dies

Conductor Marcello Viotti, director of Venice's famous La Fenice Theatre, has died in Germany at 50.

Viotti, director of La Fenice since 2002, conducted at renowned opera houses worldwide including Milan's La Scala and the Vienna State Opera. His time at La Fenice coincided with its reopening in 2003 after it was destroyed by fire in 1996. He fell into a coma after suffering a stroke during rehearsals for Jules Massenet's Manon last week.

He conducted some of the best orchestras in the world including the Berlin Philharmonic and the English Chamber Orchestra. Viotti was born in Switzerland and studied the piano, cello and singing at the Lausanne Conservatory. His career breakthrough came in 1982 when he won first prize at the Gino Marinuzzi conducting competition in Italy. Viotti established himself as chief conductor of the Turin Opera and went on to become chief conductor of Munich's Radio Orchestra. At La Fenice Viotti was widely acclaimed for his production of the French composer Massenet's Thais and some of his other productions included Giuseppe Verdi's La Traviata and Richard Strauss's Ariadne auf Naxos.

The last opera he directed at La Fenice was Massenet's Le Roi de Lahore. Viotti's debut at the New York's Metropolitan Opera came in 2000 with Giacomo Puccini's Madame Butterfly, followed by La Boheme, La Traviata and Fromental Halevy's La Juive. Giampaolo Vianello, superintendent of the Fenice Theatre Foundation, said: "I am filled with extreme sadness because, other than a great artist, he is missed as a friend - a main character in the latest joyous times, during the rebirth of our theatre." Viotti's last public performance was on 5 February when he conducted Vincenzo Bellini's Norma at the Vienna State Opera.
TV presenter Deeley drops CD:UK

Cat Deeley has resigned as host of ITV1's Saturday morning children's music show CD:UK after six years.

The 28-year-old host who also presents Stars In Their Eyes said she wanted to concentrate on new television projects. "I've had a great few years, met some really incredible people and been given some wonderful opportunities," the presenter said. Deeley will host her last show on 5 March and guest presenters will stand in until a replacement is found.

The long-running presenter said: "I would like to take this opportunity to thank the CD:UK team and all the viewers that have watched, supported the show and let me gate crash their Saturday morning. "Whilst obviously I am really sad to say goodbye, I'm immensely excited about the future." Deeley formerly co-hosted SM:tv, the children's show which airs before CD:UK on a Saturday morning, alongside hit presenters Ant and Dec. She won a Children's Bafta award for best presenter in December 2001 and also fronted BBC One's Fame Academy series.
The Sound of Music is coming home

The original stage production of The Sound of Music is to be performed for the first time in the Austrian capital, 40 years after the film was released.

The first full-scale theatrical production of the musical will make its debut in Vienna on Saturday. Julie Andrews starred in the 1965 film version of the Rogers and Hammerstein classic set in the Alpine country. But despite being one of the most successful musicals of all time, it is barely known inside Austria.

The film was never shown in any cinema in Austria and was not broadcast on television until the early 1990s. The musical is based on the true story of the von Trapp family who formed a singing troupe and escaped from Nazi-occupied Austria in 1938.

Sensitivities about Nazism during wartime Austria and issues towards the von Trapp family themselves could explain Austria's reluctance to embrace the musical. Another source of irritation for Austrians is the song Edelweiss, which is considered an traditional folk song by many filmgoers. The song was actually an invention by Rodgers and Hammerstein. Many also consider the film to portray a kitsch image of Austria, including yodelling, goat-herds and lederhosen. The production is being staged at a Viennese opera house, the Volksoper, beginning on Saturday. Maria, the novice nun who falls in love with Baron von Trapp, will be played by Austro-Australian actress and singer Sandra Pires.
Download chart debut is delayed

The inclusion of downloaded music in the official singles chart has been delayed for a month.

The British Phonographic Industry (BPI) had planned to include download formats in the chart from 20 March. But the date has been put back to 17 April to create a "level playing field" for independent labels. The BPI is concerned that independent repertoire is not adequately represented online and said they were looking at ways of rectifying it.

BPI chairman Peter Jamieson said: "The inclusion of download formats in the Official UK Singles Chart is the most significant development in the charts for 20 years.

"But for a multitude of reasons the current chart representation of independent repertoire at the major download outlets is poor. "I am very pleased we have secured this delay on behalf of independents. We have to try and establish a realistic 'level playing field' of opportunity. The Official UK Charts are run by The Official UK Charts Company (OCC) - a joint venture between the BPI and the British Association of Record Dealers (BARD). At an OCC board meeting on Wednesday, the OCC board agreed with BPI members that the 20 March start date be postponed. Download formats will now be included in the Official UK Singles Chart for the first time in the chart published on 17 April - the sales week beginning 10 April. The US has already merged downloaded singles into its Billboard Hot 100 chart.
Rapper films music video in jail

A US rapper awaiting trial for murder has filmed part of a music video in jail, angering a sheriff who says he was tricked into letting TV crews in.

C-Murder, a former member of rap group Tru, was filmed in his orange prison suit for the video for his Y'all Heard of Me single in a New Orleans jail. He is awaiting a second trial after an original conviction was thrown out. "I'm not pleased," Jefferson Parish Sheriff Harry Lee said. "He will not make another video in my jail." Footage for the video was filmed by two crews who had permission to interview C-Murder - one from Court TV and one from a local cable show.

But Mr Lee said he did not know the rapper had filmed the video and made an album behind bars, and said he was fooled into letting the cameras in. The rapper's lawyer Ron Rakosky said: "The bottom line is, we didn't do anything wrong." Mr Rakosky said it was better than C-Murder, real name Corey Miller, "just sitting there, wasting away". "Here's a guy in jail, making constructive use of his time instead of withering away," he said. "He's lost more than three years of his life, locked up for a crime he did not commit."

But local group Victims and Citizens Against Crime said he should not be working behind bars. "He is a suspect in a murder case. I don't think he should be allowed these privileges, especially earning money, until his name is totally cleared," the group's president Beverly Siemssen said. In 2003, C-Murder was found guilty of killing a 16-year-old in a nightclub, but that decision was thrown out last April. He is now facing a second trial on a charge of second-degree murder. With two brothers in the group Tru, he had two US top 10 albums in the late 1990s before going solo, when he scored another three top 10 albums.
Church urges Nelly show boycott

Church ministers are trying to prevent rapper Nelly performing in Arkansas, saying they do not want his "vile and filthy lyrics" in their town.

More than 20 Jonesboro ministers urged music fans to boycott Nelly's 12 March concert at Arkansas State University in a bid to have it cancelled. "Jonesboro is a wonderful city because of what does not come here," said the Reverend Adrian Rodgers. But a venue spokesman said more than 5,500 tickets had been sold so far.

Mr Rodgers, of the Fullness of Joy Church, said he was concerned about the rapper's lyrics that include references to drugs, sex and violence, and songs that the minister said were demeaning to women. Ministers were worried that bringing such acts to Jonesboro would lead to problems. "Tear the tickets up," Mr Rodgers said. "Do not go and do not allow your children to go."

Tim Dean, director of the Arkansas State University venue, said ticket sales had been brisk. "It would appear that with ticket sales over 5,000, many others have expressed their right to find Nelly's music entertaining and worth spending their time and money on," he said. Nelly has sold more than 30 million singles and albums worldwide, and in September 2004 simultaneously occupied the number one and two positions in the US albums chart. He has had 12 UK hit singles, including Hot in Herre, Dilemma and recent number one Over and Over.
Prodigy join V Festival line-up

Essex act Prodigy are to headline the second stage at this year's V Festival, joining main stage headliners Scissor Sisters and Franz Ferdinand.

The event, which is in its 10th year, will be held at two venues - Hylands Park in Essex and Weston Park in Staffordshire on 20 and 21 August. Meanwhile, rock veterans New Order have joined the T in the Park line-up alongside Athlete and Green Day. The Manchester band will play on 9 July at Scotland's biggest festival. It will be their debut performance at the music event which is held over the weekend of 9 and 10 July in Balado near Kinross. Other bands at the sold-out festival include Queens of the Stone Age, The Killers, Keane, The Streets and Foo Fighters.

A month later at the V Festival, Prodigy will play at Weston Park on Saturday 20 August and Hylands Park on Sunday 21 August and the Chemical Brothers vice versa. It will be the Chemical Brothers' only UK festival performance of the year. V festival director Bob Angus said: "With the Prodigy and the Chemical Brothers now confirmed to headline the second stage, we are headed for a really stellar line-up. "We pride ourselves on putting on an unbeatable live music experience and V Festival 2005 will not disappoint." Tickets for the V festival go on sale on Friday 11 March.
Rapper 50 Cent scores chart first

Rapper 50 Cent has become the first solo artist to have three singles in the US top five in the same week.

His track Candy Shop remained at the top of the charts, while Disco Inferno crept up from six to five. 50 Cent also appears on rap protege The Game's song How We do, number four in the US but now outside the UK top ten. The pair had a recent dispute which saw The Game thrown out of 50 Cent's rap collective G-Unit, accusing him of disloyalty in an ongoing feud.

50 Cent, who burst onto the music scene in 2003, has had less success in the UK charts, with three singles making the top ten. His debut album, Get Rich And Die Tryin', narrowly missed out on becoming a UK chart topper.

But in the US, he headed the 2003 end of year charts for the album and R&B and hip hop artists. Newcomer The Game's debut reached the top of the charts five weeks ago, while 50 Cent's second collection The Masscre was released in the US at the end of last week. Last May, R&B star Usher scored a chart first, with three concurrent singles in the US Top 10, a feat which was previously matched only by The Bee Gees and The Beatles. The hit songs were taken from the 24-year-old's Confessions album, which topped the American chart for eight weeks.
Goodrem wins top female MTV prize

Pop singer Delta Goodrem has scooped one of the top individual prizes at the first Australian MTV Music Awards.

The 21-year-old singer won the award for best female artist, with Australian Idol runner-up Shannon Noll taking the title of best male at the ceremony. Goodrem, known in both Britain and Australia for her role as Nina Tucker in TV soap Neighbours, also performed a duet with boyfriend Brian McFadden. Other winners included Green Day, voted best group, and the Black Eyed Peas. Goodrem, Green Day and the Black Eyed Peas took home two awards each. As well as best female, Goodrem also took home the Pepsi Viewers Choice Award, whilst Green Day bagged the prize for best rock video for American Idiot. The Black Eyed Peas won awards for best R 'n' B video and sexiest video, both for Hey Mama. Local singer and songwriter Missy Higgins took the title of breakthrough artist of the year, with Australian Idol winner Guy Sebastian taking the honours for best pop video. The VH1 First Music Award went to Cher honouring her achievements within the music industry. The ceremony was held at the Luna Park fairground in Sydney Harbour and was hosted by the Osbourne family. Artists including Carmen Electra, Missy Higgins, Kelly Osbourne, Green Day, Ja Rule and Natalie Imbruglia gave live performances at the event.
REM announce new Glasgow concert

US band REM have announced plans to perform for 10,000 Scottish fans in a rescheduled gig.

The band will play in what has been dubbed Europe's biggest tent on Glasgow Green on Tuesday, 14 June. They were forced to pull out of a concert at the SECC in Glasgow last month after bassist Mike Mills contracted flu. Fans who bought tickets for the original 22 February show can attend the rescheduled concert. The June gig will act as a warm-up for REM's open air concert at Balloch Castle Country Park, on the banks of Loch Lomond, four days later.

Promoters Regular Music booked Glasgow Green as the SECC was not available on the most suitable date. Mark Mackie, director of Regular Music, said: "It is fantastic news and it really shows REM's commitment to their Scottish fans that they are coming back to Glasgow for what will be a truly unique gig." The REM gigs will kick-start what promises to be a memorable summer for Scottish music lovers.

Grammy Award winners U2 will play Hampden on 21 June while Oasis will also perform at the national stadium in Glasgow on 29 June. Coldplay have announced a concert at Bellahouston Park in Glasgow on 1 July and T in the Park will be held at Balado, near Kinross, from 9-10 July. Ticketweb and the SECC box office will write to customers who bought tickets for the February gig asking if they want to attend the new show. Those who bought tickets in person are being urged to return to the point of purchase. Anyone who cannot make the concert will be given a refund. The cut-off date for swapping tickets is 1 April, when those remaining will go on sale to the public.
Rapper 50 Cent ends protege feud

Rapper 50 Cent has ended his public feud with his protege The Game as the pair said they wanted to be good role models for their communities.

The row blew up when 50 Cent threw The Game out of his G-Unit crew and accused him of being disloyal. A member of The Game's entourage was reportedly shot outside a radio station where 50 Cent was being interviewed. But the pair shook hands as they handed over money to music projects for New York's deprived areas on Wednesday.

The Game, whose real name is Jayceon Taylor, told a news conference: "I want to apologise. I'm almost ashamed to have participated in the things that went on over the last few weeks." Chart-topper 50 Cent, real name Curtis Jackson, said the truce came on the anniversary of the death of the Notorious BIG in 1997, who was part of a volatile feud between the east and west coast rap scenes. "We're here today to show that people can rise above the most difficult circumstances and together we can put negativity behind us," 50 Cent said.

"A lot of people don't want to see it happen, but we're responding to the two most important groups - our family and our fans." The Boys Choir of Harlem got a cheque for $150,000 (£77,800) from 50 Cent, while The Game handed over $103,500 (£53,400). The Game also made a contribution to the Compton schools music programme. 50 Cent announced he has launched the G-Unity Foundation "to help people overcome obstacles and make a chance for the better in their lives".

"I realised that if I'm going to be effective at that, I have to overcome some of my own," he said. "Game and I need to set an example in the community." 50 Cent is no stranger to feuds, with rapper Ja Rule among the targets for ridicule in his songs. On his latest album, released earlier this month, he turned his attentions to Fat Joe and Nas, who have both worked with Ja Rule. Both he and The Game have admitted drug dealing in the past and have both been shot.
Angels 'favourite funeral song'

Angels by Robbie Williams is the song Britons would most like played at their funeral, a survey has suggested.

While the melancholy hit topped the UK poll, Europeans favoured Queen's more upbeat anthem The Show Must Go On as their first choice. Frank Sinatra's My Way was second in the UK vote with Monty Python's Always Look on the Bright Side of Life in third place. More than 45,000 people were surveyed by digital TV station Music Choice.

The European chart, which included Denmark, France and Germany, put Led Zeppelin's Stairway to Heaven in second and AC/DC's Highway to Hell in third. Queen's Who Wants to Live Forever was highly favoured by both UK and European voters.

Both lists featured only one traditional or classic song each, with Britons requesting the Royal Scots Dragoon Guards' Amazing Grace and their continental counterparts opting for Mozart's Requiem. "Wanting to share your most treasured musical gem with those you're leaving behind is the perfect way to sign off and leave a lasting impression," Music Choice music and marketing manager Simon George said.
Tough schedule delays Elliot show

Preview performances of the £3m musical Billy Elliot have been delayed to give the child actors a less arduous rehearsal schedule.

Director Stephen Daldry made the decision to re-schedule the previews to protect the young stars. Three boys will rotate the demanding role of ballet dancer Billy, which requires them to sing, dance and act. The show's opening night on 12 May at the Victoria Palace Theatre in London remains unaffected by the changes. Preview performances will now be held on 14, 20 and 27 April. "This is one of the most ambitious projects I have been involved with," said Daldry. "The decision has been made to push back our preview performances in order to give our company, with a cast including 45 children, a little extra time so they are as fully prepared as possible."

He added: "The young Billy Elliots in particular, making their professional stage debuts in the West End, will benefit from a little extra time to familiarise themselves with all aspects of the production."

The three boys playing Billy are James Lomas, 15, George Maguire, 14, and Liam Mower, 12. The other major child parts will also be rotated between young actors. Such are the demands of the show that producers set up a stage school in Newcastle to train potential stars for the show. Child labour laws also mean the young actors can only work for a limited period each week. Adult actors in the show include Tim Healy as Billy's father and Haydn Gwnne as his dance teacher Mrs Wilkinson. Sir Elton John has composed the music. Daldry directed the successful film version of Billy Elliot, adapted from Lee Hall's script. Both were nominated for Oscars, alongside Julie Walters, who played Billy's teacher.
Singer Ian Brown 'in gig arrest'

Former Stone Roses singer Ian Brown was arrested after a fight during a concert in San Francisco on Tuesday, his spokesman has said.

A fan jumped on stage and attacked the singer, who then became involved in a fracas with a security guard, Fiction Records spokesman Paul Smernicki said. He said Brown was arrested at his hotel after the show at the Great American Music Hall but released without charge. San Francisco police said they could find no record of his arrest. Mr Smernicki said he had been told a fan "rugby-tackled" the singer during the gig, which resulted in "pushing and shoving".

Brown then got into a brawl with another man who tried to restrain him - without realising he was a security guard, Mr Smernicki added. The star went off for 15 minutes before returning to finish his set. Police took witness statements and apprehended Brown at his hotel, Mr Smernicki said. But he was released without charge and "as far as we're aware, that's the end of it", Mr Smernicki added. A spokesperson for the San Francisco Police Department said he may have been detained but they could find no record of the incident. Brown, 42, was lead singer with The Stone Roses, one of the most seminal bands in British rock, until they split in 1996. He has since forged a successful solo career, scoring nine UK top 30 singles since 1998. In 1998, he was sentenced to four months in jail for using threatening behaviour towards an aeroplane captain and stewardess.
Dame Julie pops in to see Poppins

Mary Poppins star Dame Julie Andrews watched the hit stage version of her classic film at a charity performance in London's West End.

It was the first time Dame Julie, who shot to fame as the nanny in the 1964 Disney movie, had seen the musical, staged at the Prince Edward Theatre. She watched Laura Michelle Kelly, 23, reprise the role on stage. The show has been one of the West End's hottest tickets since opening in December, winning two Olivier Awards. Kelly was named best musical actress at last month's ceremony and the musical also won best choreography.

But Kelly said she was "very nervous" about meeting Dame Julie because she was "my absolute hero". The gala performance saw Dame Julie, 69, return to the theatre where she had her first starring role in a performance of Humpty Dumpty in 1948. The Mary Poppins musical has been masterminded by theatre impresario Sir Cameron Mackintosh and directed by Richard Eyre with choreography by Matthew Bourne. Sir Cameron said he hoped the production, which cost £9m to bring to the stage, was a blend of the sweet-natured film and the original book by PL Travers. Proceeds from Thursday's show will go to charities including Absolute Return for Kids (Ark), international relief agency Operation USA and drama school Lamda.
Snow Patrol bassist exits group

Snow Patrol had "no other course of action" but to ask their co-founder and bassist to leave the band, lead singer Gary Lightbody has said.

Mark McClelland had been in the band for more than 10 years since its formation at Dundee University. Lightbody said "over the last 18 months touring has taken its toll on the rest of the band's relationship with him". He said: "This is the hardest decision we have ever had to make and believe us when we say we didn't make it lightly." The group, originally from Northern Ireland, has only achieved mainstream success in the last year with the single Run and award-winning album Final Straw. In a statement on the band's website, Lightbody said: "I started the group with Mark 10 years ago and he was a massive part of Snow Patrol and my life throughout that decade."

He added: "It got to the stage that things couldn't go on as they were, so we felt there was no other course of action but this. "I know you will all be distressed and may not understand this news but we had to do what was best for the band." Snow Patrol are currently working on the follow-up to their breakthrough third album. The band is set to play support to U2 on a number of summer stadium gigs. Last month, they were the big winners in Ireland's top music honours, the Meteor Awards, picking up accolades for best band and album. It followed nominations for the Brit Awards and the Mercury Music Prize. The band formed in 1994 when Lightbody and McClelland met as students at Dundee University.
Fockers keeps US box office lead

Film comedy Meet The Fockers, sequel to Meet The Parents, has topped the US box office for a third week.

The movie, which stars Ben Stiller, Robert De Niro, Dustin Hoffman and Barbra Streisand, took $28.5m (£15.2m), making a total of 204.3m (£109m). Michael Keaton thriller White Noise was second with $24m (£12.8m) despite negative reviews. Martin Scorsese's Howard Hughes biopic The Aviator came third with $7.6m (£4m) and a total of $42.9m (£22.8m). Children's adventure Lemony Snicket's A Series of Unfortunate Events, starring Jim Carrey and Meryl Streep, fell two places to fourth position with $7.4m (£3.9m).

It is also the ninth Jim Carrey film to hit the $100m (£53.2m) mark, according to Exhibitor Relations. And Fat Albert, a live-action adaptation of Bill Cosby's TV cartoon, fell one place to number five, with takings over the three days beginning on Friday of $5m (£2.6m). Ocean's Twelve took sixth place in the US chart with $5.4m (£2.8m), but it led the non-US chart at the weekend, according to Hollywood Reporter, with an estimated $17.7m (£9.4m) and total takings of $137m (£73m). The Incredibles took $300m (£160m) outside the US, while Meet the Fockers topped box office charts in Australia and Mexico with non-US takings of $19.35m (£10.2m).
Spider-Man creator wins profits

Spider-Man creator Stan Lee is to get a multi-million dollar windfall after winning a court battle with comic book company Marvel.

A judge has upheld Lee's demand for 10% of Marvel's profits from the hugely successful Spider-Man films. Spider-Man and its sequel made $1.6bn (£857m) at box offices worldwide. Of the cut now due to Lee, 82, who created Spider-Man in 1962, his lawyer said: "It could be tens of millions of dollars, that's no exaggeration." US District Court Judge Robert W Sweet ruled Lee should get a tenth of profits generated since November 1998 by Marvel TV and movie productions involving the company's characters. Lee took legal action in 2002, saying Marvel shut him out of "jackpot" profits from the first blockbuster film.

He said the company - where he worked for more than 60 years - had gone back on agreement to give him the 10%. As well as Spider-Man, Lee co-created the Incredible Hulk, X-Men, Daredevil and Fantastic Four characters. He said: "I am gratified by the judge's decision although, since I am deeply fond of Marvel and the people there, I sincerely regret that the situation had to come to this." The ruling also means he is entitled to a slice of profits from DVD sales and certain merchandise. Marvel said it would appeal and did not expect the decision to impact on financial forecasts for 2004 and beyond. The New York court did not rule on Lee's claims to a share of profits from some Spider-Man and Hulk movie merchandise, which will be decided at a future trial, Marvel said.
Fry set for role in Hitchhiker's

Actor Stephen Fry is joining the cast of the forthcoming film adaptation of The Hitchhiker's Guide To The Galaxy.

Fry will provide the voice of The Guide, an electronic book which accompanies the story's hero Arthur Dent on his travels around the galaxy. Martin Freeman, John Malkovich, Bill Nighy and Alan Rickman are co-starring in the film, due for release in May. The late Douglas Adams' original 1977 scripts have also been turned into a series of successful books.

"Being asked to do the voice of The Guide is like having your birthday on Christmas Day, discovering a winning lottery ticket in your stocking and having chocolate poured all over you," said Fry, a self-confessed fan of the book. The film's executive producer Robbie Stamp said that Adams, who died in 2001, would have been "delighted" with the choice of Fry for the role.

"His humour and intelligence are perfect for the voice of The Guide," added Mr Stamp. Adams wrote the screenplay based on his book before his premature death, while a new radio series was aired 26 years after the first broadcast and included many of the original cast members. Hollywood star Malkovich will play religious cult leader Humma Kavula, which was especially created by Adams for the new film. Freeman, who starred in hit BBC comedy The Office, will play the role of Arthur Dent, who begins his intergalactic voyage following the destruction of the Earth.
Hollywood hunts hits at Sundance

The Sundance Film Festival, the movie industry's top destination for uncovering the next independent hits and new talent, opens on Thursday.

The event will see screen executives decamp from Hollywood to Park City, Utah, for 11 days to search for low-key movies that could make it big in 2005. Open Water, Napoleon Dynamite, Garden State and Super-Size Me were all snapped up at last year's festival. But stars like Keanu Reeves and Pierce Brosnan also have films showing there. The festival is being opened by a screening of quirky comedy Happy Endings, starring former Friends actress Lisa Kudrow and Maggie Gyllenhaal, on Thursday.

Kudrow's Friends co-star, David Schwimmer, plays a divorced drunkard in Duane Hopwood, while Brosnan stars as a hit man in comedy The Matador. Keanu Reeves appears in coming-of-age tale Thumbsucker while Kevin Costner and Michael Keaton are among the other big names whose films are involved. Robert Redford founded Sundance in 1981 and it has gone on to showcase future successes such as Reservoir Dogs, The Blair Witch Project and The Full Monty. But it has received criticism that it has become more commercial and mainstream over the years. "As much as the press argues that Sundance has completely changed, it hasn't changed that much," festival director Geoffrey Gilmore said. "It's still a place for discovery. It's a place for common ground among film-makers and audiences more than it is the celebrity stuff." Other films generating interest before this year's festival include Hustle & Flow, about an aspiring rapper, The Squid and the Whale, an autobiographical film by writer-director Noah Baumbach, and comedy/drama Pretty Persuasion. It also has two new international cinema competitions.
Actress Roberts takes spider role

Actress Julia Roberts will play the part of a spider in a new film version of children's classic Charlotte's Web.

She will voice Charlotte, who teams up with a girl to save their friend Wilbur the pig, in the story by EB White. The film - a mix of live action and animation - will be Roberts' first project since the birth of her twins, Hazel and Phinnaeus, two months ago. Oprah Winfrey will voice a goose, John Cleese will voice a sheep and Steve Buscemi a rat in the 2006 film.

Ten-year-old Dakota Fanning will play Fern, the girl at the centre of the story, in the film to be directed by 13 Going on 30 film-maker Gary Winick. Filming is due to begin in Melbourne, Australia, later this month. Charlotte's Web has sold 45 million copies since it was published in 1952. An animated version was made in 1973 but this will be the first live action film. The actor who will voice Wilbur the pig has yet to be revealed.
Fantasy book wins Hollywood deal

A British author has had the film rights to her children's bestseller snapped up for a seven-figure sum, with Ridley Scott set to direct.

Michelle Paver's Wolf Brother, a fantasy set 6,000 years ago, is the first in a planned series of six books. Film studio Fox has bought the rights for around $4m (£2.13m) for Scott's company Scott Free to develop. The director said he was "thrilled" with the project. "Wolf Brother is an enchanting book," he said. Paver, who lives in London and previously worked as a lawyer, began writing the book in 1982 while studying biochemistry at Oxford University.

She was an established author of love stories when she turned the work-in-progress into a children's novel. It was published in 2004, with Paver earning an advance of $5m (£2.8m) - the highest sum ever paid for a debut children's book. Wolf Brother tells the story of Torak, a 12-year-old hunter who lives in the forest. After his father is killed he teams up with a wolf cub and sets out to rid the forest of an evil force. Paver is currently writing the second book in the series. "Michelle Paver lives and breathes the worlds she writes about," said a spokesman for the author. "I've told her about the film deal but at the moment she is writing the second book and her mind is 6000 years away deep in the primeval forest."
Carry On star Patsy Rowlands dies

Actress Patsy Rowlands, known to millions for her roles in the Carry On films, has died at the age of 71.

Rowlands starred in nine of the popular Carry On films, alongside fellow regulars Sid James, Kenneth Williams and Barbara Windsor. She also carved out a successful television career, appearing for many years in ITV's well-loved comedy Bless This House. Rowlands died in Hove on Saturday morning, her agent said.

Born in January 1934, Rowlands won a scholarship to the Guildhall School of Speech and Drama scholarship when she was just 15.

After spending several years at the Players Theatre in London, she made her film debut in 1963 in Tom Jones, directed by Tony Richardson. She made her first Carry On film in 1969 where she appeared in Carry On Again Doctor. Rowlands played the hard-done-by wife or the put-upon employee as a regular Carry On star. She also appeared in Carry On at your Convenience, Carry On Matron and Carry On Loving, as well as others.

In recent years she appeared in BBC mini-series The Cazalets and played Mrs Potts in the London stage version of Beauty and the Beast. Agent Simon Beresford said: "She was just an absolutely favourite client She never complained about anything, particularly when she was ill, she was an old trouper. "She was of the old school - she had skills from musical theatre and high drama, that is why she worked with the great and the good of directors. "She didn't mind always being recognised for the Carry On films because she thoroughly enjoyed making them. She was a really lovely person and she will be much missed." Her last appearance on stage was as Mrs Pearce in the award-winning production of My Fair Lady at the National Theatre. Previously married, she leaves one son, Alan. Her funeral will be a private, family occasion, with a memorial service at a later date.
Tautou 'to star in Da Vinci film'

French actress Audrey Tautou, star of hit film Amelie, will play the female lead in the film adaptation of The Da Vinci Code, it has been reported.

The movie version of Dan Brown's best-selling novel is being directed by Ron Howard and also stars Tom Hanks. Tautou will play Hanks' code-cracking partner, according to various newspapers. She is currently starring in A Very Long Engagement, directed by Jean-Pierre Jeunet. Jeunet was also responsible for directing Tautou in Amelie in 2001, which launched the actress into the mainstream.

She also starred as the lead role in critically-acclaimed film Dirty Pretty Things in 2002. Oscar-winning director Ron Howard chose Tautou for the part, preferring a French actress to a big name Hollywood star. UK actress Kate Beckinsale had been widely tipped as a possibility for the role alongside Vanessa Paradis and Juliette Binoche. The thriller upon which the movie is based has sold more than 17 million copies and is centred on a global conspiracy surrounding the Holy Grail mythology. The Louvre Museum, scene of the gruesome murder at the beginning of the novel, recently gave permission for filming to take place there, showbusiness newspaper Variety reported. The $100m movie will be produced by Columbia/Sony Pictures and is due for release on May 19, 2006 in the United States and France.
Double win for Sea Inside

Spanish movie The Sea Inside has been named best picture and star Javier Bardem best actor at the Bangkok International Film Festival.

Based on the true story of a paralysed man's battle to end his life, The Sea Inside was best foreign language film at the 2005 Golden Globe Awards. Annette Bening and Ana Geislerova shared the best actress award at the Bangkok festival. This year's event was scaled down following the Asian tsunami disaster.

Falling Down and The Phantom of the Opera director Joel Schumacher won a lifetime achievement award while Hong Kong director Wong Kar-Wai was honoured for promoting Asian cinema. "It's a great honour, I want to share this honour with my Thai colleagues," Wong said. French writer Christophe Barratie and Korean writer Park Chan-Chook shared the best screenplay award for Les Choristes and Old Boy respectively. Now in its third year, the Bangkok International Film Festival is donating profits from ticket sales to the tsunami relief fund.
BBC denies Blackadder TV comeback

The BBC has said there are no plans in the pipeline for a new series of hit comedy Blackadder, which ended in 1989.

Tony Robinson, who played the servant Baldrick, told ITV1's This Morning the show's star, Rowan Atkinson, was "more keen than he has been in the past". Robinson added he would "love" to do another series, each of which was set in a different era, ranging from the 15th century to World War I. But the BBC said on Thursday there were no plans for a comeback.

In the final series all the main characters were killed off charging towards German lines after being ordered out of their trench. The poignant finale was later voted the best farewell episode of a TV series. A host of other UK actors, including Hugh Laurie, Stephen Fry and Miranda Richardson, also appeared in the show. Blackadder returned for a one-off special filmed to celebrate the arrival of the millennium in 1999. It was shown at the Millennium Dome in Greenwich before being screened on BSkyB.
Smith loses US box office crown

New comedy Diary of a Mad Black Woman has ended Will Smith's reign at the top of the North American box office.

Based on a play by Tyler Perry, who also stars as a gun-toting grandmother, the film took $22.7m (£11.8m) in its first three days of release. After topping the chart for two consecutive weeks, Smith's romantic comedy Hitch dropped to second place with takings of $21m (£10.9m). Keanu Reeves' supernatural thriller Constantine dropped a place to three. Based on the Hellblazer comics, the film took $11.8m (£6.1m) on its second week of release. Two new entries came next in the chart, with Wes Craven's horror movie Cursed, about a werewolf loose in Los Angeles, in fourth position with $9.5m (£4.9m).

Action comedy Man of the House, starring Tommy Lee Jones as a Texas ranger assigned to protect a cheerleader squad, came in at fifth with $9m (£4.6m). Clint Eastwood's boxing drama Million Dollar Baby - recipient of four Academy Awards, including best picture - continued to perform well in sixth place with takings of $7.2m (£3.74m). Martin Scorsese's Hollywood biopic The Aviator - which won five Oscars, all in minor categories - held on in ninth place. The low-budget feature Diary of a Mad Black Woman stars Kimberly Elise as a woman thrown out on the streets by her philandering husband. With the help of her grandmother Madea (one of three roles played by Perry), she plots revenge. Perry, 34, is one of America's best-known black playwrights but is a newcomer to film. Once made homeless after investing his own money in unsuccessful productions of his work, he now lives in the mansion in which Diary of a Mad Black Woman was filmed.
BBC to pour £9m into new comedy

The BBC is to invest £9m in developing new comedy and entertainment programmes outside London.

The changes come as part of a shake-up of several departments to create shows that appeal to a wider range of people. Changes are also being made to teams in the factual and daytime departments outside London. Director of television Jana Bennett said the changes were about "getting the best ideas on screen as efficiently and effectively as we can". "The new structure in each genre is designed to ensure that happens," she said.

A number of new roles are being created in each department, including a head of comedy commissioning based in Glasgow. The new person will be in charge of the £9m budget and their role will be to develop shows outside the capital, both within the BBC and with independent production companies. Jane Lush, controller of entertainment commissioning, said, "Entertainment and comedy are incredibly important to our audiences; I'm confident these changes will help us get the very best programmes on screen." Similar positions will also be created in the other departments, with the new commissioning editor for documentaries based in Bristol and the daytime commissioning editor in Birmingham. Ms Bennett said the new roles would benefit those making programmes within the BBC as well as those making shows for the channel independently. "A strong independent sector and a flourishing in-house production base are not mutually exclusive and will stimulate the competition that will deliver the best ideas to the audience," she said.
Hoffman hits out over modern film

Hollywood legend Dustin Hoffman has hit out at the quality of current films and theatre productions.

The star of Rain Man and Tootsie said the film culture was "in the craphouse" at a press conference on Tuesday. The 67-year-old also said he stopped working a few years ago because he lost his "spark" for acting. Hoffman is in the UK to publicise his new comedy, Meet the Fockers, which also stars Robert De Niro, Barbra Streisand and Ben Stiller.

He said: "You go to the cinema and you realise you're watching the third act. There is no first or second act. "There is this massive film-making where you spend this incredible amount of money and play right to the demographic. "You can tell how much money the film is going to make by how it does on the first weekend. "The whole culture is in the craphouse. It's not just true in the movies, it's also true in the theatre. "Broadway, and now London is the same, special effects are in great demand. It's not a good time culturally."

Hoffman also said he stopped working a few years ago and moved into directing and writing. He said: "I just lost that spark I always had. "A couple of years ago I didn't like the parts I was getting. "Studios weren't interested in the kind of films that people of my generation wanted to see. "I thought I would stop and just try writing and directing. I wasn't aware of the depression that set in." Recently, Hoffmann has returned to film, with roles in I Heart Huckabees, Finding Neverland and now Meet the Fockers, which is the sequel to Meet the Parents. Meet The Fockers opens in the UK on Friday.
Patti Smith to host arts festival

Rock star Patti Smith has been made artistic director of this year's Meltdown festival, to be held at London's South Bank Centre in June.

The punk pioneer follows Morrissey, David Bowie and Nick Cave in directing 15 days of concerts and events. Smith has yet to decide the line-up for Meltdown, which begins on 11 June. "I want to touch on all aspects of our culture, perhaps with readings from Genet, and I have an idea for Jeremy Irons to read Proust," she said.

The 58-year-old US singer of Because the Night told The Observer newspaper that the festival would be her response to these "material, exploitative and greedy times". "It is important we explore the new, but we should also salute the best art there is, aesthetically and spiritually," she said. Last year's Meltdown festival, directed by the ex-Smiths star Morrissey, included appearances by singer Jane Birkin, Nancy Sinatra and playwright Alan Bennett. He also persuaded punk band The New York Dolls to reform for a reunion show.
Roxy Music on Isle of Wight bill

Roxy Music will appear at June's Isle of Wight music festival, along with Morrissey, Supergrass and Idlewild.

REM have already been confirmed as headliners for the three-day event, which takes place from 10-12 June. Original band members Bryan Ferry, Phil Manzerana, Andy Mackay and Paul Thompson will take to the stage on the Saturday night of the festival. The band are also working in the studio on new material, their first since the 1982 album Avalon. Roxy Music were formed in 1971 by Ferry, Mackay and Brian Eno, with Manzanera joining the following year. Their first hit was 1972's Virginia Plain, with other hits including Street Life, Love Is The Drug and the 1981 John Lennon cover, Jealous Guy. Roxy Music's back catalogue was re-released in 2000, leading to the band undertaking a world tour in 2001. Morrissey will also play on Saturday at the festival, while Supergrass and Idlewild have been confirmed for the Friday.
Music mogul Fuller sells company

Pop Idol supremo Simon Fuller has sold his 19 Entertainment company to an US entrepreneur in a $156m (£81.5m) deal.

Robert Sillerman's Sports Entertainment Enterprises, which is to be renamed CFX, recently also bought an 85% share in the estate of Elvis Presley. Mr Fuller has been appointed to the CFX board and will plan and implement the company's creative strategy. The 19 firm handles a roster of music artists, TV shows and PR strategies for stars including the Beckhams. The deal sees Mr Fuller receive £64.5m in cash and about 1.9 million shares in Sports Entertainment. There will also be a further £19.2m in either cash or stocks by the end of the financial year in June. Mr Fuller has signed a long-term agreement with the company which will see him continue to expand and develop entertainment brands. He said: "This is a hugely exciting new partnership for myself and 19 Entertainment.

"CKX will provide 19 with a powerful platform for global growth and allow us to fully take advantage of all the amazing opportunities that lie ahead. I cannot wait to get started."

Mr Fuller was the creative drive behind Pop Idol and its US offspring American Idol. 19 Management runs the careers of many of its successful contestants including Will Young, Gareth Gates and Kelly Clarkson. The company was set up 15 years ago by Mr Fuller, taking the name from his first successful single - 19 by Paul Hardcastle. Fuller was the driving force behind the Spice Girls phenomenon, using canny marketing and catchy pop songs to secure their place as the most lucrative girl group in history. He then put together S Club 7, who had their own TV show as well as a music career. Mr Sillerman's deal to buy the Presley estate sees him control the operation of Graceland, as well as money from the late star's music and films. Presley's daughter Lisa Marie retains possession of Graceland and many of her father's "personal effects".
Johnny Cash manager Holiff dies

The former manager of Johnny Cash, Saul Israel Holiff, has died at the age of 79, his family said.

Mr Holiff, who was also a concert promoter, managed Cash's career between 1960 and 1973, quitting when he thought the singer's career had peaked. "I was guilty for underestimating him repeatedly," he once said. The Canadian music manager, who also managed Tommy Hunter and the Statler Brothers, had been in declining health, according to his family. An entrepreneur from an early age, Mr Holiff served as a rear air gunner in the Royal Canadian Air Force during World War II, afterwards setting up a drive-in restaurant. He briefly dabbled in acting, before setting up offices in Nashville and Los Angeles for his concert and artist promotion business. In 1970, RPM weekly magazine presented Holiff with a special award as the Canadian music industry's man of the year. Mr Holiff retired when he was in his late 40s, returning to education as a mature student at the University of Victoria, where he graduated with a degree in history. He passed away on 17 March. According to his wishes, there will be no funeral service.
Pixies take on Reading and Leeds

Pixies, Foo Fighters and Iron Maiden will headline this summer's Leeds and Reading festivals.

The trio of rock heavyweights will top the bill for the three-day events at Bramham Park, near Wetherby, and at Richfield Avenue, Reading. They are the Pixies' and Iron Maiden's only UK festival gigs, while Foo Fighters are also at T In The Park. The Killers, Razorlight and Queens of the Stone Age are also playing the twin festivals, to be held on 26-28 August. Other acts in this year's line-up include The Charlatans, Marilyn Manson and Kings of Leon. Pete Doherty's band Babyshamblers will appear on the NME/Radio One stage along with Kasabian, Black Rebel Motorcycle Club and Bloc Party.

Organiser Mean Fiddler said more acts were still to be confirmed for the summer event. "We are all very excited to be going back to Reading and intend to have a fantastic time," said Iron Maiden's Bruce Dickinson. "We're sure fans will too." It will the first time the veteran British metal band have played Reading in 23 years. At Leeds, Iron Maiden will headline the first day of the festival on the Friday, Pixies will follow on Saturday and the Foo Fighters will close the event on Sunday. The Pixies will headline the first day of Reading, while Foo Fighters will play on Sunday and Iron Maiden will close the event. Weekend tickets are now on sale priced at £125 each.
Moreno debut makes Oscar mark

Catalina Sandino Moreno has joined a rare group of actresses who have been nominated for an Oscar for starring in a foreign language film.

The Colombian-born actress was the final hope for director Joshua Marston, who scoured the US and Colombia for a lead for Maria Full of Grace. The film sees the 23-year-old play a teenage drug mule who smuggles heroin by swallowing pellets in condoms. Plaudits have been raining down on her for her gritty performance, making it all the more surprising that this is her first film. Her previous acting experience was in amateur productions in her home city of Bogota at the Ruben Di Pietro theatre academy. She has already received a nomination for the Independent Spirit Awards leading actress category but these rarely overlap with Academy Awards, instead recognising quirkier, low-budget films. And at the 2004 Berlin Film Festival the jury could not choose between her and Charlize Theron's Oscar winning performance in Monster so gave them a tied award. Sandino Moreno is now being regarded as one of the most promising actresses around at the moment. But she is taking her time committing to her next project, hoping to land a strong Spanish script and would love to be able to work with directors Pedro Almodovar or Alejandro Amenabar.
Kidman wins photographer battle

Actress Nicole Kidman has won a restraining order against two paparazzi photographers who she claims left her fearful of leaving her Sydney mansion.

The Oscar-winning star took action against Jamie Fawcett and Ben McDonald after a bugging device was found outside her home earlier this week. Lawyers for the pair denied allegations they had planted the device. The Australian actress is currently in Sydney to film her latest movie, Eucalyptus, with Russell Crowe. Kidman was prompted to take action following a reported high-speed car chase with members of the paparazzi in Sydney last weekend.

According to local newspaper the Daily Telegraph, the incident involved paparazzi driving through red lights and on the wrong side of the road in pursuit of Kidman's vehicle. Lawyers for Mr Fawcett and Mr McDonald denied that the pair were involved in the chase. Kidman sought the "apprehended violence" orders - normally used in Australia in cases of domestic violence and similar incidents - after being advised to do so by local police. "Nicole would like to make it clear that she acknowledges she is a public figure and that reporters and photographers have a job to do and she respects that," said Kidman's publicist Wendy Day. "However, these are specific actions against two individuals who, over a period of time, have caused her to feel threatened, intimidated and unable to leave her home without fearing for her safety." Magistrate Lee Gilmore, who issued the restraining order at Waverley Local Court in Sydney, said she understood the photographers were entitled to earn a living but there had to be limits to their behaviour. "Miss Kidman says she's willing to put up with some of it, but it's gone beyond that," she said. "I do believe the allegation in relation to the driving is a serious issue."
Bookmakers back Aviator for Oscar

The Aviator has been tipped by UK bookmakers as the favourite to win the best film award at this year's Oscars.

Ray star Jamie Foxx is clear favourite in the best actor category while Million Dollar Baby's Hilary Swank is tipped to win the best actress prize. Bookmakers predict Cate Blanchett will be named best supporting actress. William Hill and Ladbrokes have given The Aviator 4/9 and 8/13 odds of winning best film, with Million Dollar Baby in second place at 9/4.

Bet Direct and Bet 365 also tip The Aviator, with the majority of bookmakers regarding Finding Neverland as the outsider. The Aviator is also widely tipped to win the best director prize for Martin Scorsese. British star Clive Owen is second favourite at William Hill to take the best supporting actor award, for his performance in Closer. The favourite in that category is Sideways star Thomas Hayden Church. Vera Drake star Imelda Staunton has 5/1 odds of winning the best actress Oscar at Bet 365 and William Hill, ahead of fellow UK star Kate Winslet who has odds of 25/1 at William Hill.

Mike Leigh is the outsider in the best director category for Vera Drake, a position he holds jointly with Ray's Taylor Hackford at bookmakers VC Bet. This year's Academy Awards will be handed out in Hollywood on 27 February. X Factor judge Sharon Osbourne will present Sky television's live coverage of the event. Meanwhile, Clive Owen's best supporting actor nomination has led a bookmaker to shorten his odds of becoming the next James Bond. He has moved from 4/1 to 5/2 favourite to play 007, with Hugh Jackman and Ewan McGregor joint second favourite. "Clive Owen's nomination has sparked a betting frenzy from James Bond fans, who feel that his heightened global recognition will have done his chances of becoming the next Bond a world of good," said William Hill spokesman Rupert Adams.
Van Gogh festival film withdrawn

Murdered director Theo van Gogh's controversial film Submission has been pulled from the Rotterdam Film Festival because of security fears.

It was one of three of his works to be shown as part of a freedom of expression event in tribute to the late film-maker's life. The film is critical of the treatment of women under Islam. Its TV screening is thought to have led to his murder. The 10-day Dutch festival begins on Wednesday. Submission was made with liberal Somali-Dutch politician Ayaan Hirsi Ali and was due to be shown on 30 January. Van Gogh was shot and stabbed to death in November 2004 several months after receiving death threats following Submission's first broadcast on Dutch television. Two of Van Gogh's other films will be shown as planned, including the theatrical world premiere of his last feature 06/05.

Festival director Sandra den Hamer said: "The festival reflects what happens around us and within cinema itself." The festival opens with the French film The 10th District Court, Moments of Trials made by Raymond Depardon. The event sees 14 films competing to win three Top Tiger Awards which aim to introduce promising new talent. New sections added to this year's festival include Cinema of the Future and Cinema of the World, with special focus on Russian and south-east Asian productions. There is also an Iraqi-German offering entitled Underexposure, which looks at life in Iraq after Saddam Hussein.
Douglas set for Indian adventure

Actor Michael Douglas is to co-produce and star in an adventure film about a diamond robbery set in India.

The new picture is expected to be similar to Douglas's action films of the 1980s, Romancing The Stone and The Jewel Of The Nile. Another Hollywood star is being lined up to co-star, while the rest of the cast will be Indian. Aishwarya Rai, star of Bride and Prejudice, is the "preferred choice" of the Indian studio involved in the film.

On a visit to India, the 60-year-old actor said he hoped to start shooting Racing The Monsoon next year. Douglas added that it had been inspired by a Wall Street Journal article about India's 'angadias', who courier money and diamonds around India.

The actor's own production company, Further Films, is working in partnership with two Indian film-making concerns to bring the picture to the screen. Shailendra Singh, the founder of India's Percept Films, said there would be "a lot of India" in the movie - and that an Indian train would play a big role. "The train will be a crucial part of the film. The chase and most of the stunts will be on the train," said Mr Singh. Swashbuckling adventure film Romancing The Stone saw Douglas's female co-star Kathleen Turner win a Golden Globe award for her performance in 1985.
Russian film wins BBC world prize

Russian drama The Return (Vozvrashchenie) has been named winner of the BBC Four World Cinema Award.

The film tells the story of two adolescent boys who are subjected to a harsh regime when their strict father returns after a 10-year absence. Directed by Andrey Zvyagintsev, The Return previously won the 2003 Golden Lion award at the Venice Film Festival. The prize was presented at an awards ceremony held in London on Thursday and hosted by Jonathan Ross. The winner was chosen by a panel which included X Files actress Gillian Anderson, critic Roger Clarke and Touching the Void director Kevin McDonald.

Ross, who is the presenter of BBC One's Film 2005, was also involved in the deliberations. A shortlist of six films from around the world had been drawn up from which the panel chose. Other nominees included the Motorcycle Diaries, Zatoichi and Hero. A viewer poll saw director Zhang Yimou's martial arts epic Hero emerge as the favourite with 32% of votes cast. Tragedy struck the production of The Return when one of the young stars, 15-year-old Vladimir Girin, drowned in a lake. The winner of the World Cinema Award last year was the French animated feature Belleville Rendezvous
Incredibles win animation awards

The Incredibles movie has beaten Shrek 2 to the main prizes at Hollywood's animation awards, the Annies.

The superhero film was named best animated feature while Brad Bird won best director, writer and voice actor for his role as designer Edna Mode. The Incredibles won a total of 10 awards - but Shrek 2, which had seven nominations, went home empty-handed. The two movies will compete with Shark Tale in the best animated film category of the Oscars at the end of February.

The Incredibles' awards came despite Shrek 2's greater box office success. Shrek 2 took $881m (£468m) around the world, compared with $576m (£306m) for The Incredibles. SpongeBob SquarePants was named best animated TV show while TV comedy King of the Hill picked up two prizes including one for actress Brittany Murphy's voice work. Tom Kenny, who provides the voice for SpongeBob SquarePants, hosted Sunday's ceremony at the Alex Theater, Los Angeles. The awards are handed out by the International Animated Film Society. Finding Nemo won nine Annies last year.
Actor Scott is new Bond favourite

Bookmaker William Hill has stopped taking bets on who will be the next James Bond, following a succession of large wagers on actor Dougray Scott.

The firm closed the book on Friday, saying "insider information" could have contributed to the number of bets. "In the past gambles like this have often been right," William Hill spokesman Rupert Adams said. The closing list gave Scott odds of 6-9, followed by Oscar nominee Clive Owen at 5-2. Scott first found fame in the TV series Soldier Soldier and has since then starred in such films as Mission Impossible II and the wartime drama Enigma.

Mr Adams said one punter had placed a bet of £870 on the 39-year-old actor at odds of 8-1. "She told us she had some inside information, perhaps she knew he had been to a casting, but she wouldn't say," he said. Others thought to be in the running include Star Wars actor Ewan McGregor and Australian star Hugh Jackman, both of whom have odds of 4-1. Colin Farrell, Jude Law and Troy star Eric Bana have also been tipped for the role in the past.

A large number of bets on actor Colin Salmon to become the first black James Bond were dismissed as a publicity stunt a month ago. The next Bond film, originally due for release in 2005, has been delayed until 2006 due to Sony's takeover of the MGM studio. The most recent, Die Another Day, was released in late 2002 and saw Pierce Brosnan make his final appearance as the secret agent. The actor was originally due to make a fifth appearance as Bond, but was released from his contract in 2004.
Singer's film to show at festival

A documentary which takes a candid look at the life of chart-topping singer George Michael will be shown at this year's Berlin Film Festival.

A Different Story will screen in the Panorama section of the festival, which runs from 10-20 February. It features the singer talking about both his career and his personal life, from his days in Wham! through to more recent events. Michael will attend the festival to introduce the screening on 16 February. Director Southan Morris and executive producer Andy Stephens will also attend the festival.

The 93 minute film will see Michael discussing his early days in Wham! along with his later career, including his legal battles with record label Sony and his stance against the Iraq war and American politics. It will also touch upon his turbulent personal life, including his arrest in a Beverly Hills park toilet in 1998 for "lewd behaviour", and the death of his boyfriend Anselmo Feleppa from Aids. The film, which includes previously unseen footage of the singer also features contributions from Michael's former Wham! partner Andrew Ridgeley, as well as ex-Wham! backing singers Pepsi and Shirlie. Other contributors include Sting, Mariah Carey, Elton John, Noel Gallagher, Geri Halliwell and Simon Cowell. This year's festival will open with Man To Man, a historical epic starring Joseph Fiennes and Kristin Scott-Thomas. It will be one of 21 films competing for the festival's top prize, the Golden Bear. Other films in competition will include The Life Aquatic, a quirky comedy starring Bill Murray, and the biopic Kinsey, which features Liam Neeson. The full programme will be announced on 1 February.
De Niro film leads US box office

Film star Robert De Niro has returned to the top of the North American box office with his film Hide and Seek.

The thriller shot straight to the number one spot after taking $22m (£11.7m) at the box office. De Niro recently spent three weeks at the top with comedy Meet The Fockers, which was at number five this week. Oscar hopefuls The Aviator, Million Dollar Baby and Sideways all cashed in on their multiple nominations with stronger ticket sales.

In Hide and Seek, De Niro plays a widower whose daughter has a creepy imaginary friend. Despite lukewarm reviews from critics, the film took more than the expected $18m (£9.5m). "The element of a real actor in a psychological thriller certainly elevated it," said Bruce Snyder, president of domestic distribution at 20th Century Fox. Clint Eastwood's Million Dollar Baby led the Oscar hopefuls with $11.8m (£6.3m), coming in at number three during its first weekend of wide release. The Aviator, a film biography of Howard Hughes that leads the Oscar field with 11 nominations, was at number six for the weekend with $7.5m (£4m). Oscar best-picture nominee Sideways entered the top ten for the first time in its 15th week of release. It came in seventh $6.3 (£3.35m). Last week's top film, Ice Cube's road-trip comedy Are We There Yet?, slipped to second place with $17m (£9m), while Coach Carter fell two places to number four, taking $8m (£4.25m) in its third week. Rounding out the top ten were In Good Company - starring Dennis Quaid and Scarlett Johansson - Racing Stripes and Assault on Precinct 13.
Career honour for actor DiCaprio

Actor Leonardo DiCaprio's "exceptional career" has been honoured at the Santa Barbara International Film Festival.

The star was presented with the award by Martin Scorsese, who directed him in Oscar-nominated movie The Aviator. "It's a lifetime achievement award, which is completely and utterly surreal, given I'm only 30 years old," DiCaprio said. "But what has it been? Almost 17 years now. I've done quite a few films." A retrospective of his movies was shown.

"What's really exciting, for me, is that this is what I really love doing," he added. "It's what I want to do for the rest of my life." DiCaprio began his movie career in horror film Critters 3, before moving onto roles in The Basketball Diaries, Romeo and Juliet, Titanic and Gangs of New York. The achievement award was created to commemorate the California festival's 20th anniversary and coincided with DiCaprio's portrayal of millionaire Howard Hughes in The Aviator.

Veteran actress Jane Russell, who starred in Hughes' 1943 film The Outlaw, said was impressed by DiCaprio's quest for authenticity when he previously discussed the role with her. "I was very happy that (DiCaprio) came and cared to come up and find out what (Hughes) was really like," she said. The Aviator has taken pole position in this year's Oscars race with 11 nominations, including nominations for best film, best actor for DiCaprio and best director for Scorsese.
Howl helps boost Japan's cinemas

Japan's box office received a 3.8% boost last year, with ticket sales worth 211bn yen (£1.08bn).

The surge was led by animated movie Howl's Moving Castle, which took 20bn yen (£102m) to become the biggest film in Japan in 2004. It is expected to match the 30.7bn yen (£157m) record of Hayao Miyazaki's previous film Spirited Away. Japan Motion Picture Producers figures showed that 170 million cinema admissions were made in Japan in 2004. The Last Samurai, starring Tom Cruise, was the biggest foreign movie hit in Japan last year, taking 13.8bn yen (£70.7m).

It was followed by Harry Potter and the Prisoner of Azkaban, Finding Nemo and The Lord of the Rings: The Return of the King. The second highest-grossing Japanese film was romantic drama Crying Out Love in the Centre of the World, followed by Be With You and Pocket Monsters Advanced Generation. Japanese films accounted for 37.5% of Japan's box office total last year, with foreign films taking the remaining 62.5%. This represented a 4.5% gain for the proportion of Japanese films in 2004 compared to 2003. The number of Japanese films released rose to 310 in 2004 from 287 the previous year. Sales of movies on DVD and video amounted to 497bn yen (£2.54bn) for the year.
Keanu Reeves given Hollywood star

Actor Keanu Reeves, best known for his role in the Matrix movies, has been awarded a star on the prestigious Hollywood Walk of Fame.

The 40-year-old attended the unveiling of the star with his mother, Patricia, and thanked her for inspiring him to become an actor. "When I was 15 years old I asked my mom if it was OK to be an actor," Reeves said. "She said: 'Whatever you want'." His star is the 2,277th to be embedded in the pavement on Hollywood Boulevard.

The actor, who was born in the Lebanese capital Beirut, also spoke of how he dropped out of school to pursue an acting career. "Hollywood was calling," he said, "So I got in my car, a 1969 British racing green Volvo with holes in the floor and bricks holding up the seats. I was a young man full of hopes and dreams." Reeves first found fame in the teen comedy Bill and Ted's Excellent Adventure, and went on to combine such blockbusters as Speed, The Devil's Advocate and the Matrix series, with smaller films including My Own Private Idaho. More recently he was seen in Something's Gotta Give alongside Jack Nicholson and Diane Keaton. His next film, the supernatural thriller Constantine, is released in the US later this month and opens in the UK in March.
De Niro completes box office coup

Robert De Niro has completed a transatlantic box office double by topping the UK and US film charts with two different films at the same time.

Comedy sequel Meet the Fockers, in which he stars with Ben Stiller, Dustin Hoffman and Barbra Streisand, shot to the top of the UK chart at the weekend. It took £7.2m in three days - eight times more than the number two, Closer. Assault on Precinct 13 was in third. At the same time, US audiences were won over by his new thriller Hide and Seek. In Meet the Fockers, he picks up the role of an uptight father and ex-CIA agent from 2000 hit comedy, Meet the Parents.

It is a big leap to his role in Hide and Seek, a supernatural horror in which he plays a widower whose daughter's imaginary friend turns nasty. In the UK box office chart, Meet the Fockers pushed Closer off the top spot while police action movie Assault On Precinct 13, starring rapper Ja Rule, made £750,000 in its first weekend. London Underground thriller Creep was another new entry at six while quirky comedy Sideways, which got five Oscar nominations last week, entered in eighth place. The Oscar nominations do not seem to have had an impact on fans' choices at cinemas. Leading contenders The Aviator, Million Dollar Baby and Ray all suffered substantial drops in takings compared with the previous weekend.
Day-Lewis set for Berlin honour

Actor Daniel Day-Lewis is to be presented with an award for his career in film at the Berlin Film Festival.

The 47-year-old, whose credits include his Oscar-winning performance in My Left Foot, will be presented with the Berlinale Camera award on 15 February. The honour, awarded since 1986, honours figures in cinema that the festival feels "particularly indebted to". Man to Man, a historical epic starring Kristin Scott Thomas, opens the German festival on 10 February. A candid documentary about the life and career of singer George Michael, A Different Story will also be screened at the 10-day event. '

Day-Lewis has competed four times at the Berlin Film Festival, with films In The Name Of The Father (1994), The Crucible (1997), The Boxer (1998) and Martin Scorsese's Gangs Of New York (2003). The festival praises him for his "sensational start" with roles in My Beautiful Launderette and costume classic A Room With A View, and a "great number of celebrated roles" in subsequent productions. Japan's oldest film studio will also be honoured along with Day-Lewis. Shochiku film studios, which was founded 110 years ago, will become the first cinematic institution to receive the Berlinale Camera award. Famous Japanese directors including Akira Kurosawa have had films produced at the studio.
US composer recreates Bach score

A US musicologist has recreated a lost musical score by German composer Johann Sebastian Bach.

The 1728 composition, called Wedding Cantata BWV 216, was found among the papers of Japanese pianist Chieko Hara, who died in Japan in 2001 aged 86. The work, written for the wedding of a daughter of a German customs official, was missing for 80 years. Joshua Rifkin - a composer and leading interpreter of Bach - has recreated the missing instrumental parts.

He said he originally wanted to let the lost cantata lie in rest. "Maybe a fragment should stay a fragment," said Rifkin. "Then I thought of palaeontologists, from one bone they figure the entire dinosaur. This is my dinosaur." The eight rediscovered pages consist of vocal pieces in German for soprano and alto, with the seven movements lasting for a total of between 20 and 25 minutes. The instrumental parts were entirely lost except for two recycled movements, a duet and an aria which had been used elsewhere in Bach's work. Rifkin likened the challenge to a "musical Rubik's cube". "I could not reconstruct what Bach wrote but I could give the people of today an idea of what his music was like," he said. "It sounds like Bach's music, but the listener should not know which part is Bach's and which part is mine."
Applegate's Charity show closes

US musical Sweet Charity has cancelled its run on Broadway after poor ticket sales for its early shows.

Star Christina Applegate had to pull out of pre-Broadway performances earlier this month with a broken foot. Producer Barry Weissler said he was "deeply proud" of the show, but said the decision to close it was "painful but fiscally responsible". Applegate, who starred in TV comedy Married With Children, had been hoping to make her Broadway debut in the show. The 33-year-old injured herself while performing in Chicago, and had been hoping to recover in time for its official New York opening on 21 April. She had received mixed reviews for performances in Minneapolis and Chicago. Previews of the $7.5m (£4m) show were due to begin on 4 April. Sweet Charity tells the story of Charity Hope Valentine, a dancer who always falls in love with the wrong man. It was first performed on Broadway in 1966 with Gwen Verdon in the title role, while Shirley MacLaine starred in the 1969 film version.
Ray Charles studio becomes museum

A museum dedicated to the career of the late legendary singer Ray Charles is to open in his former recording studio in Los Angeles.

His longtime publicist Jerry Digney said the museum would house "archive materials from recordings, to awards, to ephemera, to wardrobe". A tour bus used by Charles and his entourage over the years will also be on permanent display. It is hoped the museum will be ready for visitors in late 2007.

Mr Digney said the recording studio and offices had been used by Charles for many years, and was where he recorded much of his last album, Genius Loves Company. It is hoped the museum will also house an education centre. The building had been declared a historic landmark by the city of Los Angeles just before Charles' death in June 2004 at the age of 73. Following his death, Charles won eight Grammy Awards, including album of the year for Genius Loves Company, a collection of duets.
Britney attacks 'false tabloids'

Pop star Britney Spears has attacked "false" and "desperate" US tabloid magazines, questioning their honesty after they reported she was pregnant.

In a letter on her website, the singer named celebrity tabloids Us Weekly, In Touch and Star as the worst offenders. "Until you face what is going on in your life, I guess you'll remain a false tabloid," the 23-year-old wrote. Stories about the state of her marriage to Kevin Federline and rumours about a pregnancy have recently appeared. But the chart-topping singer's letter did not shed any further light on those stories. In February, Spears clashed with Us Weekly for publishing pictures of her honeymoon in Fiji without permission. The couple, who married in Los Angeles last September, claimed staff took photographs of them which were later sold.

They said they allowed the pictures to be taken after they were assured they would only be used for a private scrapbook, which they later received as a souvenir. Us magazine was unrepentant about their decision to publish, saying: "Britney should start her own magazine if she'd like to dictate her own coverage." "Coming from a celebrity who sold pictures of both her wedding and her stepdaughter, it's unlikely the issue here is privacy," they added. Spears claimed that other magazines were approached with the pictures but chose to contact her instead.
Abba queen enters music rich list

The woman behind the Abba musical Mamma Mia! has joined a list of British-based music millionaires.

Producer Judy Craymer is the highest new entry in the Sunday Times' music rich list, with a £67m fortune. Ms Craymer remortgaged her home to finance her idea of a musical based around Abba's hits, which has since become a global triumph. Teenage soul singer Joss Stone is a new entry on a list of Britain's young music millionaires with £5m.

Ms Craymer, who developed Mamma Mia! with playwright Catherine Johnson and members of Abba, is at number 31 on the music rich list. But taking the top spot for a second year is former record label boss Clive Calder, whose wealth has risen to £1.3bn. Mr Calder is the man behind acts including Britney Spears. He made his fortune by selling his independent label Zomba to record giant BMG. Former Beatle Sir Paul McCartney is second on the list with £800m - up £40m on last year. Andrew Lloyd-Webber's wealth rose an estimated £300m on last year, to £700m, while theatre impresario Sir Cameron Mackintosh's fortune rose from £340m to £400m.

His recent hits have included the West End show Mary Poppins. But Pop Idol mogul Simon Fuller has seen his wealth plummet from £220m last year to £75m after selling his entertainment company 19 for less than expected, according to the Sunday Times. Joss Stone, the 17-year-old soul singer from Devon, was a new entry in the young music millionaires list. The list also features Charlotte Church, Coldplay, Daniel Bedingfield, Will Young and David and Victoria Beckham. At number one is Dhani Harrison, son of the late Beatle George Harrison, who has inherited £140m. The Beckhams - who qualify thanks to Victoria's former singing career - are in second place with £75 million between them - up £10m on last year.
Berlin celebrates European cinema

Organisers say this year's Berlin Film Festival, which opens on Thursday with period epic Man to Man, will celebrate a revitalised European cinema.

Of the 21 films in competition for the Golden and Silver Bear awards, more than half are from Europe with France particularly well represented. Festival director Dieter Kosslick says this strong showing signals "a new consciousness for European films". "They're on an incredible winning streak," he told the Reuters agency. "This isn't to say there aren't any good American films," he continued. "It's just that there are more good European films."

However, Mr Kosslick refused to accept that widespread opposition to the Iraq war had turned audiences against Hollywood imports. "There is no anti-American mood," he said. Some 350 films will be screened at this year's festival, with a further 300 shown at the European Film Market that runs alongside it. More than a dozen celebrities are scheduled to attend, among them Will Smith, Kevin Spacey and Keanu Reeves. But Mr Kosslick says more would be coming had the Academy Awards not been brought forward to 27 February. "I'm not worried that we won't be able to fill the red carpet with stars," he said, though he admitted the festival may be moved to January next year to avoid a similar clash. The 10-day Berlinale runs until 20 February.
India to deport Bollywood actress

India has ordered the deportation of Iranian-born model and actress Negar Khan to Norway after saying she was working illegally on her visa.

Khan has had raunchy roles in music videos and Bollywood films over the past two years. The distressed actress told media she was being driven straight to the airport after a routine appointment at the Bombay immigration office. Immigration officials said she had been warned about her visa last year.

Khan told an Indian news channel on her mobile phone: "They are not even letting me go home to get my bags. I have no clothes or money on me. "They did not give me any notice. I don't know why they are taking me away like this. There is nothing wrong with my visa. It says I work here... They are not allowing me to even call a lawyer." Bipin Bihari, deputy police chief in Bombay, said Khan was being sent back to Norway, from which she holds a passport, on the first available flight. "She was on a visitor's visa but she has engaged in several commercial ventures," he said. "We issued notices last year, in view of which she had gone back to Norway, but she has returned again this year to work." One of Khan's biggest successes was the steamy Hindi song Chadti Jawani (Rising Youth). Khan was involved in controversy when topless photos alleged to be of her appeared in a Norwegian magazine.
Ray DVD beats box office takings

Oscar-nominated film biopic Ray has surpassed its US box office takings with a combined tally of $80m (£43m) from DVD and video sales and rentals.

Ray's success on DVD outstripped its $74m (£40m) US box office total, earning more than $40m (£22m) on the first day of the DVD's release alone. Ray has been nominated in six Oscar categories including best film and best actor for Jamie Foxx. The film recounts the life of blues singer Ray Charles, who died in 2004. In its first week on home entertainment release the film was the number one selling DVD, with the limited edition version coming in at number 11. Sony horror film The Grudge, starring Michelle Gellar, was the US' second best-selling DVD, with Jennifer Lopez and Richard Gere's romantic comedy Shall We Dance? at number three. Foxx's critically acclaimed performance as Ray has already earned him a Screen Actors Guild Award for best actor, as well as a prestigious Golden Globe. Ray director Taylor Hackford, responsible for the classic 1982 film An Officer and a Gentleman, has also received an Oscar nomination in the best director category. The film's three other Oscar nominations are for costume, film editing and sound mixing.
Women in film 'are earning less'

Women in the UK film industry earn less than their male counterparts despite being better qualified, according to a study released on Wednesday.

Only 16% of women earn more than £50,000, compared with 30% of men. Women make up a third of the workforce. The research was carried out jointly by the UK Film Council and industry training body Skillset. It also found that women in the industry were less likely than men to be married or have dependant children.

The study, which claims to be the most in-depth so far conducted, found 60% of women in the film industry hold degrees, compared with 39% of men. Whilst 17% of men in the industry had no qualifications, this was true for only five per cent of women. In the lower salary bracket, 35% of women earn less than £20,000 a year, compared to only 18% of men. The research found very few women worked in the camera, sound, electrical and construction departments, but they made up a majority of those working in make-up and hairdressing.

UK Film Council chief executive John Woodward said: "Whilst the UK has benefited hugely from its highly-qualified film production workforce there are still many barriers facing people who want to get in and stay in the industry." "Developing the film production workforce must be underpinned with a commitment to diversity as well as training." The workforce is largely focused around London, with 78% in the industry based in the capital and the south east of England. The industry depends heavily on word of mouth, with 81% being recruited in that way. In total, only five percent of the workforce is made up of ethnic minorities, although in London the figure rises to 24%. The necessity of completing unpaid work experience to get into the workforce has also shot up, from 5% before the 1980s, to 45% after 2000.
Shark Tale DVD is US best-seller

Oscar-nominated animation Shark Tale has raked in $80m (£42.4m) in the first week of its US DVD release becoming the year's best-selling home video so far.

The tally for its DVD and video sales soared past the film's opening week US box office takings of $56m (£29.7m). Shark Tale is now the sixth-highest earning DVD for first week sales. The all-time first-week record is held by 1995's Lion King followed by Shrek 2, Finding Nemo, the original Shrek, and Monster's Inc.

Shark Tale, whose voice cast includes Will Smith, Robert De Niro, Renee Zellweger and Martin Scorsese, sold more than 6 million DVDs and videos across the United States and Canada. It becomes the highest first-week earner for February, outshining My Big Fat Greek Wedding which sold four million units in 2003. Films which are expected to earn strong home video returns are usually timed for release in the busiest retail season which falls before Christmas. The best-selling home video of last year was the Dreamworks hit Shrek 2, which took an estimated $458 m (£242.7m) in North America alone.
Lopez misses UK charity premiere

Jennifer Lopez cancelled an appearance at the UK charity premiere of her new movie saying she was too ill to fly.

The actress and singer dropped out at the last minute and has now cancelled all European promotion of the film Shall We Dance? and her new album. She said: "I very much wanted to be in London but unfortunately I'm not well. At the advice of my doctors I'm unable to travel." Co-star Richard Gere attended the event held in aid of the tsunami appeal. Thousands braved the cold weather to see the stars in London's Leicester Square. The red carpet boasted waltzing dancers in honour of the film's ballroom dancing theme. The film's director Peter Chelsom said he was disappointed that Lopez did not attend.

"It's a shame. I know it's true that she's not well because she has also cancelled her promotional tour. I've heard she has swollen glands." Gere, 55, greeted the crowd and signed autographs, accompanied by his wife Carey Lowell. Other stars who turned out on the night included Honor Blackman, Strictly Come Dancing presenter Tess Daly and actress Anita Dobson. Lopez issues a statement apologising for her absence. "I'm so proud of Shall We Dance and was looking forward to visiting London," she said. "This film was a labour of love for me, and I want to thank everyone involved in bringing it to you, from the cast, to the film director, to the crew." Lopez appeared at the Grammy awards on Sunday, singing a duet with her third husband Marc Anthony.
Super Size Me wins writers' award

Super Size Me director Morgan Spurlock has won the Writers Guild of America's award for documentary feature writing.

The Oscar-nominated film followed Spurlock as he ate only McDonald's fast food for an entire month. Spurlock was given the award at a special ceremony at the Roosevelt Hotel in Hollywood on Tuesday. Organisers said the rising popularity of documentary films led them to honour a writer for a documentary screenplay for the first time.

Producer Brian Grazer presented the award to Spurlock and the film's backers, Roadside Attractions, Samuel Goldwyn Films and Showtime Independent Films. Spurlock set out to discover the effect of living on nothing but McDonald's for a month, upgrading to supersize portions when offered. The film followed his 25lb weight gain and the health effects on his body, including his liver and cholesterol levels. McDonald's announced it was to scrap its "supersized" meals last year, but denied the move was as a result of the negative publicity created by Spurlock's film. Spurlock was given his award on the same day the European Court of Human Rights ruled that two UK activists should have been given legal aid in their long fight against a McDonald's libel action. Helen Steel and David Morris, from north London, dubbed the "McLibel Two", were found guilty in a 1990s trial of libelling the company in a leaflet they had been handing out At the end of the case the High Court in London ruled McDonald's had been libelled and awarded the company £60,000 in damages, later reduced to £40,000 on appeal. But he found the leaflet was true in some aspects.
Original Exorcist to be screened

The original version of horror prequel Exorcist: The Beginning, dropped by producers over claims it was not scary enough, is to have its world premiere.

The film, directed by Paul Schrader, will be screened on 18 March at the International Festival of Fantastic Film in Brussels. The psychological drama stars Stellan Skarsgard and foreruns the 1973 film. Schrader was replaced by director Renny Harlin who made a new version of the film which debuted in 2004. The prequel project was originally announced in 2001, with actor Liam Neeson in the lead role and John Frankenheimer as director. However Frankenheimer pulled out in 2002, a month before he died.

Skarsgard then replaced Neeson in the role of Father Merrin, made famous by Max Von Sydow in the 1973 film. Principal footage was shot in Morocco and Rome at a reported cost of $32m. However, in August 2003 it emerged that producers Morgan Creek were shelving Schrader's version of the film, having complained it was not scary enough. As well as replacing Schrader with Harlin - the director behind Die Hard 2 and Cliffhanger - the producers also changed most of the cast, but Swedish star Skarsgard stayed in the Merrin role. Harlin's film, released in the UK in October 2004, received lukewarm reviews but went on to make over $76m (£40.7m) worldwide. The festival screening will be the first time that Schrader's film has been seen in public. Reports that it will be released either in cinemas or on DVD have yet to be confirmed. Other films at the festival in the Belgium capital, which runs from 11-26 March, include the US horror hit Boogeyman and the forthcoming sequel Ring 2, as well as a selection of films adapted from the works of Jules Verne.
Hitch holds on to US box office

Will Smith's first romantic comedy, Hitch, has topped the North American box office for a second weekend.

Smith plays a New York "date doctor" with love worries of his own in the movie, which took $31.8m (£16.8m). It held off a strong challenge from the new Keanu Reeves sci-fi thriller Constantine which opened at number two with $30.5m (£16.1m) Constantine, based on the Hellblazer comics, stars Reeves as an exorcist who must send Satan's minions back to hell. Two family films came next in the chart, with Wayne Wang's comedy Because of Winn-Dixie, about a young girl and an abandoned dog, in third position with $10.85m (£5.73m).

Comedy adventure Son of the Mask, came in at number four with $7.7m (£4.1m), just ahead of Oscar favourite Million Dollar Baby at five.

Smith's comedy will be the first US movie released this year to top the $100m (£52.7m) mark. It's success continues a strong trend of Hollwood movie-going this year with figures for the popular President's Day weekend 13% greater than last year. Oscar contenders The Aviator, starring Leonardo DiCaprio as Howard Hughes and wine-tasting comedy Sideways, both held onto positions in the top 10.
Tarantino to direct CSI episode

Film director Quentin Tarantino is to direct an episode of US television series CSI: Crime Scene Investigation.

The Oscar-winning Pulp Fiction director has also written an original story for the season finale episode. CSI's co-producer, Carol Mendelsohn, said the episode would have "more bugs and blood" than usual. It is not Tarantino's first venture into TV. In 1995 he directed an episode of the medical drama ER and has also appeared in Alias.

Ms Mendelsohn said the production team had been trying for a while to get Tarantino to direct an episode of CSI, and added that he was a fan of the forensic drama. She said he finally agreed a few weeks ago while CSI was doing some location shooting in Las Vegas and the show's stars persuaded him. "He knows everything there is to know about CSI, and he is into the whole mythology of CSI," Mendelsohn said. "Quentin came in a couple of weeks ago. We had a story meeting with the writers. "He had a great idea, and it was so much fun to have him in the room... we are positively giddy." Filming is due to start in early April and the Tarantino-directed episode will be broadcast in the US on 19 May.
Bollywood DVD fraudster is jailed

A major distributor of pirated DVDs of Bollywood films has been sent to prison for three years.

Jayanti Amarishi Buhecha from Cambridge was found guilty of two trademark offences last month, and sentenced at Harrow Crown Court, London, on Tuesday. Buhecha, who made £26,000 per month from his illegal trade, was called "one of the biggest Bollywood pirates in the UK" by the sentencing judge. The British Phonographic Industry (BPI) worked for two years on the case.

An operation was launched against Buhecha in 2002 after complaints were received about his activities. The judge in the case, which lasted seven days, said that "a heavy penalty was called for because of the enormous damage Buhecha caused to legitimate business". Fake DVDs were manufactured in Pakistan and Malaysia and sold on wholesale to shops by Buhecha, who traded in conterfeit DVDs in 2002 and 2003.

In December 2002, he was stopped in his car by trading standards officers, who uncovered 1,000 pirated DVDs and faked inlay cards printed with registered trademarks. Despite being arrested and bailed, Buhecha was caught a second time at the end of 2003. His home and a lock-up in Cambridge were found to contain 18,000 counterfeit DVDs and further faked inlay cards. Buhecha was previously a legitimate distributor of Bollywood films, but was suspended and sued by his employers for dealing in illegal copies of Bollywood classic Mohabbatein. Legitimate Bollywood film distributors have hailed the conviction as "a major boost". Bollywood music and film suffers piracy at the rate of 40%, which is more than that suffered by mainstream productions. The BPI welcomed the news of the prison sentence, but warned there are plenty of other active counterfeiters of Bollywood films. The organisation's anti-piracy director David Martin said: "The problem simply will not disappear with Buhecha. Others and more will take his place, so it's vital that keep up our efforts in this field."
Sideways dominates Spirit awards

The comedy Sideways has dominated this year's Independent Spirit Awards, winning all six of the awards for which it was nominated.

It was named best film while Alexander Payne won best director and best screenplay, along with writing partner Jim Taylor. It also won acting awards for stars Paul Giamatti, Thomas Haden Church and Virginia Madsen. Sideways is tipped to do well at Sunday's Oscars, with five nominations.

The awards, now in their 20th year, are given to films made outside the traditional studio system, and are traditionally held the day before the Oscars. Other winners included Catalina Sandino Moreno, who took best actress for her role as a drug smuggler in the Colombian drama Maria Full of Grace. Moreno is also nominated for best actress at the Oscars. The best first screenplay award went to Joshua Marston for Maria Full of Grace. Scrubs star Zach Braff won the award for best first feature for Garden State, which he wrote, directed and starred in. Oscar-nominated euthanasia film The Sea Inside from Spain won best foreign film, while Metallica: Some Kind Of Monster was awarded best documentary. Actor Rodrigo de la Serna took the best debut performance prize for The Motorcycle Diaries. The awards are voted for by the 9,000 members of the Independent Feature Project/Los Angeles, which includes actors, directors, writers and other industry professionals. Last year's big winner, Lost In Translation, went on to win the Oscar for best original screenplay, for writer-director Sofia Coppola.
Arnold congratulated on Oscar win

Oscar-winner Andrea Arnold has been congratulated by the UK Film Council, the organisation which partly funded her project.

Arnold's film Wasp won the best live action short film award on Sunday. "The UK Film Council spends millions of pounds of lottery investment on short filmmaking in Britain every year," said chief executive officer John Woodward. "It certainly pays off when you see new film-makers winning such prestigious awards," he added.

Wasp, which was commissioned by the Film Council and Channel 4, beat films by fellow UK nominees Gary McKendry and Ashvin Kumar to the prize. It stars actress Nathalie Press, who appeared in the Bafta-winning drama My Summer Of Love, as a single mother who is forced to take drastic action when she is invited on a date and is unable to find a babysitter to look after her four daughters. The film has already won over 30 other international awards including the Sundance Short Film Prize. Arnold, from Dartford in Kent, described her victory as "truly overwhelming. I'm really not used to this kind of thing," she said, after receiving her Oscar from actor Jeremy Irons. "Thanks to everyone who worked on this - the beers are on me when we get home." The director was one of only two British winners on the night, the other being Sandy Powell, who won the costume design Oscar for her work on The Aviator.
Lee to create new film superhero

Comic book veteran Stan Lee is to team up with producer Robert Evans to create a movie featuring a new superhero.

Foreverman will focus on a character who has to face problems in everyday life as well as using his special powers to save the world. Paramount Pictures, the studio behind the film, have revealed few details about the project but say it has the potential to spawn a series of films. Lee is best known for his work on Spider-Man and The Incredible Hulk.

He is collaborating on the script with screenwriter Peter Briggs, who penned the recent comic book adaptation Hellboy. "We believe it to be truly a whole new franchise," said Gill Champion, president and chief executive of Lee's POW! Entertainment. "In this world where people are looking for something different, Stan's idea was to create a concept not seen before to become an evergreen franchise for Paramount." Many of Lee's other creations, including X-Men and Daredevil, have been turned into films in the past five years. However, the Spider-Man series has been the biggest box office hit, with the 2002 original and its 2004 sequel taking almost $1.6bn (£857m) worldwide. A third Spider-Man film is scheduled for release in 2007. Another Marvel Comics adaptation, The Fantastic Four, will be released in cinemas this summer.
France set for new Da Vinci novel

French booksellers are braced for a rush of interest after another book from the author of The Da Vinci Code is translated into French.

Angels and Demons, by US author Dan Brown, will go on sale on Wednesday. The Da Vinci Code is set in Paris - including the Louvre - and has sold around one million copies in France. The main character, Robert Langdon, also appears in Angels and Demons. The Da Vinci Code is being made into a film starring Tom Hanks. Angels and Demons was written before The Da Vinci Code, which has sold more than 20 million copies worldwide, and been translated into more than 40 languages, since it was released in 2003. Angels and Demons is set mainly in Rome as symbologist Robert Langdon follows a 400-year-old trail to try to uncover a plot by an ancient brotherhood, The Illuminati, to blow up the Vatican.

The novel deals with moral issues such as the debate between science and religion and also seeks to uncover some of the mysteries surrounding the Pope. On his website, Brown wrote: "I think the reason Angels and Demons is raising eyebrows right now is that it opens some Vatican closets most people don't even know exist. "But I think most people understand that an organisation as old and powerful as the Vatican could not possibly have risen to power without acquiring a few skeletons in their closets." Such is the success of The Da Vinci Code in France, special tours have been organised to trace Langdon's footsteps, including the the Louvre museum and the Saint Sulpice Church. The Louvre has also given permission for parts of the film version to be shot in the museum. The film, to be directed by A Beautiful Mind's Ron Howard, is due to start filming at the Paris museum in May and stars Hanks alongside French actress Audrey Tautou.
UK Directors Guild nominees named

Martin Scorsese and Clint Eastwood are among the nominees for the top prize at the Directors Guild of Great Britain awards, now in their second year.

The Oscar rivals will compete for the international film prize at the ceremony, to be held at the Curzon Mayfair cinema in London on 20 March. Other nominees include Bill Condon for Kinsey and Michel Gondry for Eternal Sunshine of the Spotless Mind. Mike Leigh's Vera Drake is among the nominees for best British film. The awards will see Eastwood and Scorsese once again competing for the directing prize, following last weekend's Oscars. Clint Eastwood won best director for Million Dollar Baby, beating Scorsese who was nominated for a fifth time for the Howard Hughes biopic The Aviator. Mike Leigh will compete for the British film prize with Shane Meadows for Dead Man's Shoes, Roger Michell For Enduring Love and My Summer Of Love director Pawel Pawlikowski.

Nominees for best foreign film include Spain's Pedro Almodovar for Bad Education and Hong Kong director Wong Kar-Wai for 2046. In the TV categories, comedy series Early Doors and The Alan Clark Diaries will compete for the best directing award for a 30-minute television show, while the directors of Shameless, Hustle and Bodies are all nominated for the 60-minute television prize. The directors of Omagh and Sex Traffic are among the nominees for a television movie or mini-series. American Beauty's Sam Mendes will receive a lifetime achievement award for his work in film and theatre, while theatre director Simon McBurney will be given an award for outstanding directorial achievement.
Tarantino 'to make Friday sequel'

Director Quentin Tarantino is in talks to write and direct a new instalment in the Friday the 13th horror franchise, according to the Hollywood Reporter.

The film-maker will reportedly meet executives from New Line Cinema this week to discuss the 12th film in the long-running 'stalk and slash' series. The original film, released in 1980, has spawned ten sequels based around mask-wearing murderer Jason Voorhees. The most recent, Freddy Vs Jason, was released in summer 2003. That film saw Jason battle Freddy Krueger, star of the Nightmare on Elm Street franchise. According to the industry newspaper, New Line had been trying to make another sequel involving Ash, the hero of the Evil Dead movies, but was unable to agree terms with director Sam Raimi. Tarantino is said to be intrigued by the prospect of building a new film around one of the horror genre's most recognised figures. First, however, he is scheduled to direct the season finale of US television series CSI: Crime Scene Investigation. Filming is due to start in early April. Tarantino's episode, for which he also wrote the original story, will be broadcast in the US on 19 May.
Boogeyman takes box office lead

The low-budget horror film Boogeyman has knocked Robert de Niro thriller Hide and Seek from the top spot at the UK box office.

The film, in which a young man is forced to revisit a traumatic childhood experience, took £788,439 in its first three days on release. Hide And Seek, which was knocked off the top of the US box office by Boogeyman last month, fell one place. Oscar nominee Hotel Rwanda was also a new entry in the chart, at number five. The film, which scored Oscar nominations for Don Cheadle and British actress Sophie Okonedo, made £507, 596 in its first week of nationwide release.

Comedy sequel Meet The Fockers and Shall We Dance?, starring Jennifer Lopez and Richard Gere, completed the top five. Clint Eastwood's Million Dollar Baby re-entered the charts at number eight, following its recent success at the Oscars. The boxing drama, which won four awards including best film and best director, has made £4.4m to date. Two other new entries, a remake of the 1965 film Flight of the Phoenix, and the teen comedy Harold and Kumar Get The Munchies, debuted outside the top 10.
Lost Doors frontman movie found

Historians in Florida have discovered a 40-year-old clip of a clean-cut Jim Morrison appearing in a promotional film for his university.

The 1964 film shows the Doors frontman, who died aged 27 in 1971, playing the part of a young man who had been rejected by Florida State University. Morrison is seen quizzing a college administrator on why he was refused. "But what happened? How come my parents and the state and the university didn't look ahead?" he is seen asking.

"It's incredible. He's so clean cut and soft-spoken," said Florida state archivist Jody Norman. "We know he was at Florida State University for a period of time and he did some acting when he was there," Norman added. The Doors were one of the most influential bands of the 1960s, with hits including Light My Fire and Riders On The Storm. Morrison was notorious for his wild lifestyle - and was accused of exposing himself and simulating a sex act at a Miami concert in 1969. He was found dead in the bath of his Paris apartment and died from heart problems, aggravated by alcohol. A coroner recorded a verdict of death by natural causes and his grave at the city's Pere Lachaise ceremony has become a shrine for fans.
Last Star Wars 'not for children'

The sixth and final Star Wars movie may not be suitable for young children, film-maker George Lucas has said.

He told US TV show 60 Minutes that Revenge of the Sith would be the darkest and most violent of the series. "I don't think I would take a five or six-year-old to this," he told the CBS programme, to be aired on Sunday. Lucas predicted the film would get a US rating advising parents some scenes may be unsuitable for under-13s. It opens in the UK and US on 19 May. He said he expected the film would be classified PG-13 - roughly equivalent to a British 12A rating.

The five previous Star Wars films have all carried less restrictive PG - parental guidance - ratings in the US. In the UK, they have all been passed U - suitable for all - with the exception of Attack of The Clones, which got a PG rating in 2002. Revenge of the Sith - the third prequel to the original 1977 Star Wars film - chronicles the transformation of the heroic Anakin Skywalker into the evil Darth Vader as he travels to a Hell-like planet composed of erupting volcanoes and molten lava. "We're going to watch him make a pact with the devil," Lucas said. "The film is much more dark, more emotional. It's much more of a tragedy."
French honour for director Parker

British film director Sir Alan Parker has been made an officer in the Order of Arts and Letters, one of France's highest cultural honours.

Sir Alan received his decoration in Paris on Wednesday from French Culture Minister Renaud Donnedieu de Vabres. "You have explored the possibilities of film with an immense talent," Mr de Vabres said as he presented the award. Parker praised French films, saying: "Hollywood, which created modern cinema, uses it only as a commodity." He told the minister: "I am honoured to be thus distinguished by France, the flag carrier of cinema throughout the world." Sir Alan's films include Oscar-winning Fame plus Midnight Express and The Commitments.

A founding member of the Director's Guild of Great Britain, he is a former chairman of the UK Film Council and on the board of the British Film Institute. "Through your work and your campaigns, you have shown us how the artist occupies an essential place in our contemporary society," Mr de Vabres said. "Through your dreams which you show us, through the links that you weave, you question the world through the mirror of your work." He also cited the director's 2003 film The Life of David Gale, in which Kevin Spacey played a man on Death Row, as proof of his "veritable artistic commitment against the death sentence".
Robots march to US cinema summit

Animated movie Robots has opened at the top of the US and Canada box office chart, taking $36.5m (£19m) on its first weekend on release.

Featuring the voices of Ewan McGregor, Halle Berry, Robin Williams and Mel Brooks, Robots follows a robot inventor who moves to a big city. Vin Diesel's family comedy The Pacifier fell to the number two spot, taking $18.1m (£9.4m). New Bruce Willis movie Hostage opened at number four with $9.8m (£5.1m).

However, a recut version of Mel Gibson's The Passion of the Christ, which featured less violence than last year's original movie, took just $239,850 (£125,000), despite opening in 957 cinemas. The new version of the film received little publicity and the original version is available across the US on DVD. "We certainly had higher expectations than what we got," said Rob Schwartz, head of distribution for Newmarket Films, which released The Passion of the Christ. "We were trying to get the film out there, hoping it would reach an audience that it didn't quite reach the first time around. It doesn't seem to have worked out quite as well as we had hoped." Meanwhile, Will Smith comedy Hitch has become the top film at the global box office after taking an estimated $30.1m (£15.6m) over the weekend at cinemas outside North America, according to industry website Screen Daily. It has taken $65.5m (£34.1m) so far, buoyed by opening at number one in the UK last weekend and a successful run in Germany. The movie, which cost a reported $70m (£36.4m) to make, has taken $138m (£72m) in the US so far.
Hobbit picture 'four years away'

Lord of the Rings director Peter Jackson has said that it will be up to four years before he starts work on a film version of The Hobbit.

The Oscar winner said on a visit to Sydney there was a "desire" to make it, but not before lengthy negotiations. "I think it's gonna be a lot of lawyers sitting in a room trying to thrash out a deal before it will ever happen," said the New Zealander. The rights to JRR Tolkien's book are split between two major film studios. Jackson, who is currently filming a remake of Hollywood classic King Kong, said he thought that the sale of MGM studios to the Sony Corporation would cast further uncertainty on the project. The 43-year-old was in the Australian city to visit a Lord of the Rings exhibition, which has attracted 140,000 visitors since it opened in December.

The film-maker recently sued film company New Line Cinema for undisclosed damages over alleged withheld profits and lost revenue from the first part of the Middle Earth trilogy. The Fellowship of The Ring from 2001 went on to make worldwide profits of $291 million (£152 million). Jackson is thought to have secured the most lucrative film directing deal in history to remake King Kong, which is currently in production in Wellington. The picture, which stars Naomi Watts and Oscar winner Adrien Brody, is due to be released in December. Jackson has also committed to making a film version of Lovely Bones, based on the best-selling book by Alice Sebold.
Buffy creator joins Wonder Woman

The creator of Buffy the Vampire Slayer is to take on a new female superhero after signing up to write and direct the Wonder Woman movie.

Joss Whedon described the DC Comics character as "the most iconic female heroine of our time". "In a way, no one has met her yet," he said. "What I love most about icons is finding out what's behind them, exploring the price of their power." Linda Carter played the character in the 1970s TV series. The character of Wonder Woman, famed for her red and gold costume, was born on Paradise Island, and was blessed with the powers of strength and flight. The film is being produced by Joel Silver, producer of the Matrix trilogy.

"There's no one better than Joss to adapt the legendary Wonder Woman comic book character created in the 1940s into a dynamic feature film for 21st Century audiences," said Silver. "Wonder Woman was the first great female superhero to emerge from comic books and later inspire millions of fans in her television incarnation... but this groundbreaking heroine has yet to be reinvented for the feature film arena." Whedon created the character of Buffy in the screenplay for the 1992 film. He distanced himself from the movie because of the direction it eventually took, and the film bombed. But he did not give up on the Slayer and went on to write and executive produce seven seasons of the cult TV series. He also produced the spin-off Angel series. He is currently directing the film Serenity, based on his short-lived sci-fi series Firefly.
Labour chooses Manchester

The Labour Party will hold its 2006 autumn conference in Manchester and not Blackpool, it has been confirmed.

The much trailed decision was ratified by Labour's ruling National Executive Committee in a break with the traditional choice of a seaside venue. It will be the first time since 1917 that the party has chosen Manchester to host the annual event. Blackpool will get the much smaller February spring conference instead in what will be seen as a placatory move.

For years the main political parties have rotated between Blackpool, Bournemouth and Brighton. And the news the much larger annual conference is not to gather in Blackpool will be seen as a blow in the coastal resort. In 1998 the party said it would not return to Blackpool but did so in 2002. The following year Bournemouth hosted the event before the party signed a two year deal for Brighton to host the autumn conference.

Colin Asplin, Blackpool Hotel Association said: "We have tried very hard to make sure they come back to Blackpool. "Obviously we have failed in that. I just hope Manchester can handle the crowds. "It amazes me that the Labour Party, which is a working class party, doesn't want to come to the main working class resort in the country." The exact cost to Blackpool in terms of lost revenue for hotel accommodation is not yet known but it is thought that block bookings will be taken at the major Manchester hotels after the official announcement.
Crucial decision on super-casinos

A decision on whether to allow Westminster to legislate on super-casinos is set to be made by the Scottish Parliament.

The government has plans for up to eight Las Vegas style resorts in the UK, one of which is likely to be in Glasgow. Scottish ministers insist they will still have the final say on whether a super-casino will be built in Scotland. But opposition parties say that will not happen in practice. The vote is due to be taken on Wednesday and is expected to be close.

The Scottish Executive believes that the legislation should be handled by Westminster. The new law will control internet gambling for the first time and is aimed at preventing children from becoming involved. A super-casino in Glasgow could be located at Ibrox or the Scottish Exhibition and Conference Centre. The new gambling bill going through Westminster will allow casino complexes to open to the public, have live entertainment and large numbers of fruit machines with unlimited prizes. But the Scottish National Party and the Tories say the issue of super-casinos should be decided in Scotland and believe the executive is shirking its responsibility.
Mrs Howard gets key election role

Michael Howard's ex-model wife, Sandra, is to play a leading role in the Conservative election campaign.

Mrs Howard will make solo visits to target seats as well as accompanying her husband on his helicopter campaign trail criss-crossing the country. Mr Howard will host a news conference at the party's London HQ every morning, Tory co-chairman Liam Fox said. "We want Michael to be as accessible as possible," Mr Fox said, adding that the party was not afraid of scrutiny.

The Tory leader wanted to meet as many ordinary members of the public, Mr Fox said. Tony Blair has also said he is intending to get out and talk to as many people as possible during the election campaign. But Labour campaign chiefs say there are no plans for Mr Blair to hold a daily news conference.

Mr Fox responded by accusing the prime minister of "hiding away from the scrutiny of London's media". The Liberal Democrats also say they are planning to hold daily news conferences with Charles Kennedy. On Mrs Howard's role, Mr Fox said: "Sandra has already been campaigning with Michael on a number of visits and has been undertaking short visits herself. "That pattern will continue. It's worked very well up until now." Mrs Howard made her debut speech at the Conservative Party Conference in Bournemouth last October. She used her speech on the fringe to highlight the work of a drugs charity, Addaction, which she supports. Mrs Howard has also appeared along side her husband on TV chat shows. During an interview on ITV1's This Morning she said she often criticised her husband for not showing the side of him that she knows.
Talks held on Gibraltar's future

Two days of talks on the future of Gibraltar begin at Jack Straw's country residence later on Wednesday.

Officials at the two-day summit at the foreign secretary's official Kent house, Chevening, will plan a new forum on the Rock's future. In October, Mr Straw and his Spanish counterpart Miguel Moratinos agreed to establish a body that would give Gibraltarians a voice in their future. Most Gibraltarians said in a referendum they wanted to remain British.

Gibraltar's Chief Minister Peter Caruana will represent the British citizens living on the Rock, while Britain's Europe Director Dominick Chilcott will represent the UK. Madrid is being represented by Spain's director general for Europe, Jose Maria Pons. The initiative follows Spain's socialist government's decision to put its long-standing sovereignty ambitions on hold. Gibraltarians rejected plans for the Rock's sovereignty to be shared between Britain and Spain in a referendum organised by Gibraltar government.
Crisis 'ahead in social sciences'

A national body designed to tackle skills shortages in key subjects should be set up, a committee of MPs has said.

There was an "absolute crisis" in the recruitment of statisticians and other social science experts, the Commons science and technology committee added. "Major problems" are expected over the next 10 years as the social science workforce continues to age, it said. The committee was reporting on the work, strategy and spending plans of the Economic Social Research Council.

The council aims to promote and support strategic research for social science postgraduates and provide social scientists to meet the needs of the country. It also liaises with the government and industry over their social science needs. In its report on the council's work the committee said: "We are deeply concerned by the skills shortages afflicting, in particular, the qualitative branches of social sciences. This mirrored previous concerns the committee had expressed on shortages in the fields of maths and chemistry, it said. "It is hard to see how significant progress towards rectifying these shortages can be made through the deployment of Economic and Social Research Council's limited resources. "If the government is serious about addressing skills shortages in key subjects it needs to find a more effective mechanism to achieve this." A national "strategic capabilities fund" to address shortages in key areas should be set up in response, the committee added.
Tsunami debt deal to be announced

Chancellor Gordon Brown has said he hopes to announce a deal to suspend debt interest repayments by tsunami-hit nations later on Friday.

The agreement by the G8 group of wealthy nations would save affected countries £3bn pounds a year, he said. The deal is thought to have been hammered out on Thursday night after Japan, one of the biggest creditor nations, finally signed up to it. Mr Brown first proposed the idea earlier this week.

G8 ministers are also believed to have agreed to instruct the World Bank and the International Monetary Fund to complete a country by country analysis of the reconstruction problems faced by all states hit by the disaster. Mr Brown has been locked in talks with finance ministers of the G8, which Britain now chairs. Germany also proposed a freeze and Canada has begun its own moratorium. The expected deal comes as Foreign Secretary Jack Straw said the number of Britons dead or missing in the disaster have reached 440.
Straw to attend Auschwitz service

Foreign Secretary Jack Straw will visit Auschwitz for the 60th anniversary of the former Nazi concentration camp's liberation, it has been announced.

Prince Edward will also join the UK delegation in Poland for National Holocaust Memorial Day on 27 January. Between 1.1 and 1.5 million people, mainly Jews, were killed at Auschwitz. The Tories said they were glad Mr Straw had been "shamed" into going, having earlier criticised the decision to send a lower-ranking official. Shadow Foreign Secretary Michael Ancram said: "I am glad the foreign secretary has finally been shamed into representing Britain at this important act of commemoration. "Once again this government has shown crass insensitivity until it has been forced by public opinion into doing what it should have done in the first place."

In Britain, the Queen and Prince Philip will lead the nation's commemoration at a service in Westminster Hall, London. The Queen will also host a reception for holocaust survivors at St James's Palace. Altogether, some six million people, mainly Jews, perished in the Holocaust. The Queen's grandson, Prince Harry, sparked outrage earlier this week after photographs of him wearing a Nazi uniform at a costume party emerged. The prince, 20, apologised, but critics have called for him to go to Auschwitz for the commemoration of the Soviets' 1945 liberation of the camp. Prince Harry should see for himself "the results of the hated symbol he so foolishly and brazenly chose to wear", Rabbi Marvin Hier, founder of Jewish human rights group the Simon Wiesenthal Center said.
Brown visits slum on Africa trip

Chancellor Gordon Brown has visited Kenya's biggest shantytown as he opened a week-long visit to Africa.

Mr Brown's trip is designed to highlight how the UK wants to make Africa's problems a priority of its chairmanship of the G8 this year. He will see an HIV/Aids orphanage in Tanzania and a women's credit union in Mozambique before chairing a meeting of the Commission for Africa in Cape Town. At slums in Narobi on Wednesday, he said education needs had to be tackled.

Speaking outside the Olympic Primary School, Mr Brown said: "It is simply not acceptable in the modern age for the rest of the world to stand by and have hundreds of millions of children not getting the chance at education." He pointed to international plans to invest $10bn for education in Africa over the next decade. The school is on the edge of Kibera, where 800,000 live often in huts made of mud, scrap metal and cardboard. Mr Brown's aides say he wants to find out more about the Kenyan Government's education policies, which included introducing free primary education in early 2003. The chancellor has already unveiled proposals for a G8 aid package which he has likened to the Marshall Plan used by the United States to rebuild Europe after World War Two. The trip follows claims of infighting between Mr Brown and Tony Blair detailed in a new book. Conservative leader Michael Howard is expected to seize on those reports at prime minister's questions at 1200 GMT on Wednesday.
UK 'needs true immigration data'

A former Home Office minister has called for an independent body to be set up to monitor UK immigration.

Barbara Roche said an organisation should monitor and publish figures and be independent of government. She said this would counter "so-called independent" groups like Migration Watch, which she described as an anti-immigration body posing as independent. Migration Watch says it is not against all immigration and the government already publishes accurate figures. Sir Andrew Green, chairman of the organisation, says there is no need for an independent body because Office of National Statistics data are accurate. He says he opposes large-scale immigration "both on the grounds of overcrowding and culture".

He said: "For example, over the next 20 years one household in three will be due to immigration. "We are already more overcrowded than India and we are four times more overcrowded than France." Ms Roche, Labour MP for Hornsey and Wood Green, believes legal migration is something we should welcome. She said her proposals mean "we wouldn't have so-called independent experts, like Migration Watch, who come into this debate from an anti-immigration point of view." She went on: "What I would like to see is there being a body which actually looked at the figures, published them, and was independent of government. "I think that would go a long way to allaying some of the fears that are sometimes whipped up during this debate."
Blair sets date for Africa report

The Commission for Africa's report will be released on 11 March - Comic Relief day, Tony Blair has said.

July's G8 summit in Gleneagles in Perthshire - chaired by the prime minister - will use the report as the basis for talks on Africa. The announcement followed the final meeting of the commission - which includes singer Bob Geldof - in London. As well as more aid, fairer trade and less debt, the commission is likely to demand action on corruption in Africa. Mr Blair told a news conference: "It will be a report that's brutally frank about the reality, but I hope idealistic about what can be done if the will is there. "It's an ambitious project we have set ourselves and you will have to judge on its outcome when we publish it."

Mr Blair has vowed to put Africa at the top of his agenda during his time at the helm of the G8. He acknowledged he would have a "a job of persuading to do" on other nations to get the necessary commitment to debt relief. Bob Geldof, in characteristically blunt style, promised that the commission would not just be a talking shop but would deliver radical new thinking to change direction for Africa. The former rock star's presence on the commission has been interpreted as a sign that it will be uncompromising in its demands. The people involved include two African government leaders and a range of other African politicians, as well as experts from some other developed countries.
Lib Dems demand new inquiry

A judge should look into the David Blunkett controversy as key questions remain unanswered, the Lib Dems say.

Sir Alan Budd's inquiry linked the ex-home secretary to the speeding up of a visa claim by his ex-lover's nanny. But he could not say whether Mr Blunkett had treated the nanny as a special case or had used her as an example of immigration problems. Lib Dem spokesman Mark Oaten said the number of officials who had forgotten what happened was worrying. He told BBC News: "I'm extremely concerned that 20 individuals appear to have forgotten what happened or more suspiciously are not prepared to say what happened. "That must be bad for government, it must be bad for public confidence in the system."

Mr Oaten said people would be mystified why Sir Alan's inquiry failed to uncover why processing of the visa application was speeded up. He said: "There is a strong case for a judge-led judicial review of this because, of course, next time it happens it may not be about a nanny and their visa. It may be about something even more important than that. "So we do need to understand what took place and who was involved." The Tories criticised the Lib Dem stance, saying Mr Oaten had initially said he accepted Mr Blunkett's word unless further evidence emerged. But Lib Dem officials say Mr Oaten was speaking when an inquiry was under way and was avoiding rushing to judgement.
Leaders meet over Turkish EU bid

Tony Blair has met Italian Prime Minister Silvio Berlusconi and German Chancellor Gerhard Schroeder to talk about Turkey entering the EU.

The Downing Street talks covered a range of other topics ahead of an EU summit in Brussels later in the week. Mr Blair is an enthusiastic proponent of talks to bring Turkey within the recently-expanded EU. Italy and Germany also favour an early start to talks, but there is scepticism in France and elsewhere. Some are worried that Turkey's large and rapidly growing population and low average income might make integration into the EU difficult.

Some are concerned that a change of government could lead to Turkey reneging on key human rights reforms it has recently enacted. And many in France would prefer Turkey to admit that World War I-era killing of Armenians constituted genocide. There are also issues in France and the Netherlands over the possible problems of integrating the first major Muslim nation into the EU. But Mr Blair and the Labour government have been the staunchest backers of Turkish accession, provided it sticks with human rights and economic reform. Mr Blair's official spokesman said: "The prime minister has regular meetings with both of them and particularly in advance of European Councils. "The key issue at this week's council will be that of Turkey, but they will also discuss a range of other matters."
Profile: David Miliband

David Miliband's rapid rise through the ranks of government continues with his promotion to Cabinet Office minister.

Elected in a safe Labour seat in 2001 his previous job was school standards minister - a role he won in May 2002. Prior to the last election he was a key figure in New Labour as the head of the Downing Street policy unit where he was a key member of the manifesto writing team. Seen as one of the more intellectual figures in the government, he was also working for Tony Blair in his policy unit when he was leader of the opposition.

A brief glance at Mr Miliband's family background reveals an impressive socialist pedigree in the form of his father Ralph, who died in 1994. He was an eminent and influential leftwing academic. And while David Miliband is seen as a key Blair lieutenant his brother Ed is a special advisor to Chancellor Gordon Brown. Prior to working for Mr Blair, David Miliband spent time at the left-leaning Institute for Public Policy Research. He then became secretary of the Commission on Social Justice. The 39-year-old was educated at Haverstock Comprehensive before going on to Oxford to study politics, philosophy and economics. He also took an MSc in political science from the Massachusetts Institute of Technology.
Borders rail link campaign rally

Campaigners are to stage a rally calling for a Borders rail link which was closed in 1969 to be reopened.

They will mark the 36th anniversary of the line closure, which ran from Edinburgh through the Borders and on to Carlisle, with a walk at Tweedbank. Anne Borthwick, of Campaign for Borders Rail, said reopening the Waverley Line would restore the area's prosperity. MSPs are considering the reintroduction of passenger rail services through Midlothian to the Borders. Campaigners have said that reopening the Waverley Line, which could cost up to £100m, would be a huge economic boost for the Borders.

In 2000, Borders Council said the area's economy had suffered since the closure. Ms Borthwick said the lobby group was determined to keep the pressure on the Scottish Executive. "We are hoping that many people will join us in a march to mark the 36th anniversary of the closure of the Waverley Line," she said. "Campaign for Borders Rail is the biggest independent lobby group in Scotland and we have been lobbying tirelessly for the reinstatement of rail services to the Borders and eventually to Carlisle.

"We believe that it is time for the Scottish Executive to commit to the first phase of the project by pledging to fund the line between Edinburgh and Tweedbank in the first instance and then investigate extending the line in the future." Ms Borthwick said reopening the line would be a prosperous move and protect the character of the Scottish Borders. A study in 2000, which was commissioned by the executive, Scottish Borders Council, Midlothian Council and Scottish Borders Enterprise, found that a half-hourly service from Tweedbank to Edinburgh could cover its operating costs. It also found that a half-hourly service from Gorebridge to Edinburgh could cover operating costs and that a freight railway joining the West Coast Main Line at Longtown could also be reinstated.
Parties warned over 'grey vote'

Political parties cannot afford to take older UK voters for granted in the coming election, says Age Concern.

A survey for the charity suggests 69% of over-55s say they always vote in a general election compared with just 17% of 18 to 24 year olds. Charity boss Gordon Lishman said if a "decisive blow" was struck at the election it would be by older voters who could be relied on to turn out. A total of 3,028 adults aged 18 or over were interviewed for the study. Mr Lishman urged the next government to boost state pension.

He also called for measures to combat ageism and build effective public services to "support us all in an ageing society". "Older people want to see manifesto commitments that will make a difference to their lives," Mr Lishman said. "Political parties must wake up to the fact that unless they address the demands and concerns of older people they will not keep or attract their vote." In the survey carried out by ICM Research, 14% of people aged between 18 and 34 said they never voted in general elections. Among the over-65s, 70% said they would be certain to vote in an immediate election, compared with 39% of people under 55. Age Concern says the over-55s are "united around" key areas of policy they want the government to focus on. For 57%, pensions and the NHS were key issues, while the economy was important for a third, and tax was a crucial area for 25%.
MPs quiz aides over royal income

Senior officials at the two bodies generating private income for the Queen and Prince of Wales are to be questioned by MPs.

Aides from the Duchy of Lancaster and Duchy of Cornwall will appear before the Commons Public Accounts Committee. It has been reported they could be questioned about Prince Charles' spending on Camilla Parker Bowles. But BBC correspondent Peter Hunt said they are not responsible for how money is spent and may be unable to answer. Duchy officials, who will appear before the committee on Monday, are only responsible for generating money. The Duchy of Lancaster provides the Queen's private income, while the Duchy of Cornwall provides Prince Charles' annual income. The Duchy of Cornwall is a 140,000-acre estate across 25 counties, and also includes residential properties, shops, offices, stocks and shares. It was set up in 1337 by King Edward III to provide income for successive heirs to the throne. It covers the cost of the prince's public and private life - neither Charles, nor William and Harry, receive taxpayers' money from the Civil List. However, the Prince of Wales did receive over £4m from government departments and grants-in-aid in 2003-4. The duchy last year generated almost £12m. The prince has voluntarily paid income tax - currently 40% - since 1993.
Tory leader 'cleared' over work

Scottish Conservative Party leader David McLetchie claims he has been cleared over a potential conflict of interest.

The Edinburgh MSP earns up to £30,000 a year from the law firm Tods Murray, where he is a partner. Mr McLetchie said he has taken advice from Holyrood officials about what details he needs to declare. He was advised to exercise judgement to avoid the perception of a conflict and said he had done nothing wrong. As an MSP, Mr McLetchie signed a parliamentary motion questioning expansion plans for Edinburgh Airport.

It then emerged Tods Murray has a client which opposes the development. Mr McLetchie then sought guidance from the standards committee to clarify his position. BBC Scotland's political correspondent Glenn Campbell said no complaint had been made against Mr McLetchie, but questions were raised about his dual role. Glenn said MSPs are advised to guard against a conflict of interests and a perception of a conflict.

Mr McLetchie said: "I'm quite clear that no conflicts of interest arise in my case, that the judgement I took has effectively been vindicated when you look at the advice that has been given to me and that these allegations are unfounded." He said nothing had changed in respect of his work with the law firm and it was a matter he would have to discuss with the other partners at Tods Murray. "The firm and I have a very good working relationship and we have done for the last six years," said Mr McLetchie. "I don't suppose I'll be working forever as a lawyer or a politician. I deserve to retire from both, but I'm not willing to put time limits on them."
Lib Dems 'to target stamp duty'

The Liberal Democrats are promising to raise the stamp duty threshold if they win the general election, in a bid to court first-time house buyers.

Vince Cable, the party's Treasury spokesman, said raising the threshold to £150,000 would prevent over 400,000 home-buyers from paying the tax. He said first-time buyers were being "squeezed out" of the housing market. The Labour party said the Liberal Democrats needed to explain how they would pay for the plan. The plan forms part of a wider Lib Dems policy to encourage first time buyers and those on lower incomes into the market.

Under the proposals, the average saving for a new buyer would be more than £1,000, according to Mr Cable. "First time buyers are being squeezed out of the housing market not only by higher house prices but also by being swept into the stamp duty net," he said. "By failing to uprate the stamp duty threshold Gordon Brown has hit first time buyers and those on low incomes the hardest. "By pledging to increase the threshold to £150,000, the Liberal Democrats will make it possible for many first time buyers to buy a property without facing this tax." Paul Boateng MP, Labour's Chief Secretary to the Treasury, said: "The Lib Dems' sums don't add up. "They can have no credibility until they can say how they would fund their ever growing list of tax and spending commitments." Mr Cable will publish his "Alternative Budget" on Monday.
England children's tsar appointed

The first children's commissioner for England has been appointed.

Great Ormond Street Hospital professor of child health, Al Aynsley-Green, was chosen by the government and will start the £100,000-a-year job immediately. He will oversee a £2.5m annual budget and have the power to look into "any matter relating to the interests and well-being of children". Prof Aynsley-Green has also been the national clinical director for children in the Department of Health. He promised to make sure that children's opinions "count".

"I will be drawing on my experience of working with children and young people to help ensure that those with the power to improve children's lives do live up to their responsibilities. "I want all children and young people to know that they can approach me to discuss any matter that affects them, knowing that I will value their opinion." Education Secretary Ruth Kelly said Prof Aynsley-Green would "strengthen the voice of children and young people". Prof Aynsley-Green was a lecturer at Oxford University, trained at Guy's Hospital Medical School, University of London; Oriel College, Oxford; and in Switzerland. He is described as "a proud grandfather" of four. Scotland, Wales and Northern Ireland already have children's commissioners.
Assembly ballot papers 'missing'

Hundreds of ballot papers for the regional assembly referendum in the North East have "disappeared".

Royal Mail says it is investigating the situation, which has meant about 300 homes in County Durham are not receiving voting packs. Officials at Darlington Council are now in a race against time to try and rectify the situation. The all-postal votes of about two million electors are due to be handed in by 4 November. A spokesman for Darlington Council said: "We have sent out the ballot papers, the problem is with Royal Mail. "Somewhere along the line, something has gone wrong and these ballot papers have not been delivered. "The Royal Mail is investigating to see if they can find out what the problem is."

A spokeswoman for Royal Mail said: "We are investigating a problem with the delivery route in the Mowden area of Darlington. "This is affecting several hundred properties, which have failed to receive ballot papers. "We are working closely with the council and will do all we can to help rectify the problem. "No-one will not receive their ballot paper as special hand deliveries will take place where necessary. "We are unaware of any other problems of this kind to do with the regional assembly vote."

The Darlington Council spokesman added: "Initially we had complaints from a couple of residents in Mowden to say they thought they should have had their ballot papers by now. "We then made further investigations and it became clear this was a bigger issue." A spokeswoman for the Electoral Commission told BBC News Online that letters were being sent out to those homes affected. She said the commission was satisfied that measures had been put in place to ensure all voters received ballot papers in time. So far a total of 569,072 ballot envelopes have been scanned by bar code at counting offices across the North East.
Drive to 'save' festive holidays

Efforts are being made to 'protect' workers' days off on Christmas Day and New Year's Day.

Support is being sought for a bill which would ensure that large retailers in Scotland remain closed on Christmas Day and 1 January. The Usdaw trade union said shop workers should be able to enjoy a break with their families. MSP Karen Whitefield wants to ensure only those whose roles are essential are at work over the festive season. In recent years, more stores have been opening on traditional holidays, with some starting their end-of-year sale on Christmas Day or New Year's Day. Ms Whitefield said: "I have found members of the public to be very supportive when I have been campaigning on the streets.

"The early evidence shows quite clearly that the vast majority of people believe that shop workers should be given these two special days to spend with friends and family." Usdaw general secretary John Hannett added: "Christmas Day and New Year's Day are special days for everyone in Scotland and the fact that shops do not open is an important part of making them special. They are largely collective days of rest. "We want people to tell Karen, through her consultation, whether they want the special nature of these days to remain, or whether they want them to become like any other trading day, with shops open for business as usual." The consultation on a Christmas & New Year's Day Trading Bill has so far attracted almost 500 responses and closes on 7 February.
Blair hails Turkey-EU talks deal

Tony Blair has hailed a deal bringing Turkey a step closer to EU membership as important for the world's future "peace and prosperity".

Mr Blair has been a leading advocate of Turkish membership despite controversy surrounding the idea. Leaving a Brussels summit Mr Blair said "the fact Turkey is a Muslim country does not mean it should be barred". The deal to open formal talks with Ankara came despite an EU demand for Turkey to recognise Cyprus. It was agreed the issue can be tackled at a later date but Turkish premier Recep Erdogan had to accept negotiations did not guarantee his country full EU membership.

If it joins, Turkey may have to accept restrictions to limit migration by its citizens. Mr Blair said having Turkey in the EU was of "importance to the future peace and prosperity of my country, Britain, and the wider world".

"We are stating a fundamental principle that the fact Turkey is a Muslim country does not mean it should be barred from Europe. "On the contrary, if it fulfils the same principles of human rights, then Muslim and Christian can work together." Under the agreement, Turkey must issue a written statement promising to sign an accord effectively recognising the Greek Cypriot government, but gives Turkey more time to sell the idea to its people.

The internationally recognised southern part of Cyprus is an EU member, but Turkey, which occupies northern Cyprus, had previously insisted it would not bow to demands to recognise the country, calling the issue a "red line". It could take up to 15 years before Turkey is able to join, and entry cannot be guaranteed. The EU has also announced that it will start accession talks with Croatia in April 2005. However, talks will begin only if the country co-operates fully with the UN war crimes tribunal for the former Yugoslavia.
Visa decision 'every 11 minutes'

Visa processing staff are sometimes expected to rule on an application every 11 minutes, MPs have said.

Pressure was placed on staff to be efficient, rather than to do a thorough examination of an application, the Public Accounts Committee found. Every officer had an annual target of 8,000 applications - equivalent to 40 a day or one every 11 minutes. MPs want research into whether UK visa holders leave at the end of their stays, or vanish into the black market. Committee chairman Edward Leigh said: "There is a worrying tension between quick processing and proper control over the visas issued. "Entry clearance staff are expected to deal with a visa application in about 11 minutes which is surely too little time to look closely at the supporting documents. "

The committee's report also discussed the Romanian and Bulgarian visas scandal which led to the resignation of immigration minister Beverley Hughes last year. Committee members said the Home Office had been wrong to dismiss concerns from visa staff abroad who feared the system was being abused. Investigations carried out in the wake of Ms Hughes' resignation found more than 7,000 people had entered the UK under the business visa scheme for Romanian and Bulgarian "entrepreneurs". Mr Leigh said the Home Office should now consider removing those who had not set up a valid business. A Home Office spokesman said the system had been toughened and tightened since the investigation. He added "that the traditional system of a dual decision making process for all pre-entry applications will be replaced by a single pre-entry check at post, which will be simpler and more robust against abuse than the current system".
BNP leader Nick Griffin arrested

The leader of the British National Party has been arrested as part of a police inquiry following the screening of a BBC documentary.

A party spokesman said Nick Griffin was arrested on Tuesday morning on suspicion of incitement to commit racial hatred. West Yorkshire police confirmed they had arrested a 45-year-old man from outside their area. BNP founding chairman John Tyndall was arrested on Sunday on the same charge.

In July, the BBC documentary Secret Agent featured covertly-filmed footage of BNP activists. Mr Griffin is the twelfth man to be arrested following the documentary. Nine men from West Yorkshire and another man from Leicester have been arrested and freed on bail. Seven of the men had been held variously in connection with suspected racially aggravated public order offences, conspiracy to commit criminal damage and possession of a firearm. Two men, both from Keighley, were arrested in September on suspicion of conspiracy to commit criminal damage. A 24-year-old man from Leicester was detained on Monday on suspicion of incitement to commit racial hatred. A BNP spokesperson said Mr Tyndall, from Brighton, was arrested following a speech he made in Burnley, Lancashire, and was released on police bail.
Brown names 16 March for Budget

Chancellor Gordon Brown will deliver his Budget to the House of Commons on 16 March, the Treasury has announced.

The Budget, likely to be the last before the General Election, will be at 1230 GMT on that Wednesday, just after Prime Minister's question time. The annual event is when the chancellor outlines the government's taxation and broader economic predictions. It is likely to set out much of the tax and spending battleground for the election, widely expected on 5 May.

Next month's Budget will be Mr Brown's eighth since Labour came to power in 1997. If a May election is called, there could be as little as 18 days between the Budget and the announcement of a date for the election. A shortened Finance Bill would have to be rushed through Parliament with all-party support to allow the Government to continue collecting revenue. The full Finance Bill, with the Budget measures in it, would then be returned to the Commons after the election, if Labour secures another term in office. As Mr Brown announced the Budget date in a short ministerial statement, accountancy firm Ernst & Young urged him to put politics aside and focus on the long-term requirements of the economy. "In the Budgets that were given immediately before the last six elections, taxes were cut by the incumbent chancellor and, in many cases, taxes were increased soon after the election result," said Aidan O'Carroll, E&Y's UK head of tax.
Hague 'given up' his PM ambition

Former Conservative leader William Hague says he will not stand for the leadership again, having given up his ambition to be prime minister.

Mr Hague, 43, told the Daily Telegraph he would now find a life dominated by politics too "boring" and unfulfilling. Mr Hague, who stepped down after his party's 2001 election defeat, does not rule out a return to the front bench. He also told the paper he hopes to remain MP for Richmond, North Yorks, and start a family with wife Ffion. Mr Hague, who recently had published the biography of William Pitt the Younger, also said he wanted to continue writing books and speech-writing.

He told the newspaper: "I don't know whether I will ever go back on to the front, but don't rush me." Asked if he would stand for the leadership again, Mr Hague replied: "No. Definitely not." His determination to stay away from a central role will disappoint some senior Conservative members, who say the party needs him. Tim Collins, the shadow education secretary, said last week it would be a "huge boost" to the party if Mr Hague returned to the front bench. Mr Hague became an MP at 27 and Leader of the Opposition at 36. He said: "I feel fortunate that, by the age of 40, I had crammed in an entire political career. "I had been in the Cabinet and been leader of the party, so now I can branch out into other things...it is a very liberating feeling." Mr Hague added that he may have misjudged his own ambition to be prime minister. "Maybe I wasn't as driven by politics as I thought I was," he said.
Job cuts 'false economy'  - TUC

Plans to shed 71,000 civil service jobs will prove to be a "false economy" that could hamper public sector reforms, according to a TUC report.

Public and Commercial Services union members have already voted to strike over cuts for one day on 5 November. The TUC said cuts would deliver less than 6% of the £22bn ministers hope to save through efficiency reforms. General secretary Brendan Barber warned the "costs could easily outweigh the benefits". "The government's big boost to public spending is now showing results," said Mr Barber. "Public services are improving but looking for simple savings through job cuts at this stage could be a false economy.

"They may shoot a Tory fox, but cutting thousands of civil service jobs will hit the morale and capabilities of the public servants expected to implement government reforms. The costs could easily outweigh the benefits." Next Friday's strike action by the PCS is the biggest in the civil service since 1993, hitting Jobcentres, benefit agencies, pensions offices, customs and driving tests. The union says it is concerned about pensions, sick pay and forced relocation as well as the cut in jobs. Last month it was announced that a total of 37 social security offices and Jobcentres across the UK would close in the first wave of plans to shed civil service jobs. The number of civil servants in Britain rose to more than 520,000 in April. Other areas the strike will affect include passports, museums and galleries, libraries and health and safety inspections.
MSPs hear renewed climate warning

Climate change could be completely out of control within several decades, the Scottish Environment Protection Agency is warning a committee of MSPs.

Experts are giving evidence on the subject to the Scottish Parliament's environment committee. Officials believe nuclear energy and wind farms may be better options than trying to tackle global warming. Solutions suggested by conservationists include reducing internal UK air travel and boosting electric trains. The evidence is part of the committee's inquiry into the impact of climate change in Scotland. Sepa is attempting to curb global warming gases, as pollution from transport emissions increases.

Ecologists are warning MSPs that Scotland may have to accept "significant intrusion" from wind farms. It is likely also that nuclear power will be needed for possibly several decades. Sepa predict that the two methods will remain as energy sources until climate change is under control. Experts studying the seas off Scotland's west coast have already forecast more devastating weather of the type which caused havoc across the country last month.

They predicted that damaging storms will become more frequent. Researchers from the University of the Highlands and Islands and Southampton have been looking at wave heights in the Atlantic over the last nine years. The project was conducted jointly by the Environmental Research Institute in Thurso, which is part of the University of the Highlands and Islands (UHI) Millennium Institute network, and the Southampton Oceanography Centre. Scientists carried out a series of studies, including the use of satellites to assess wave heights in the seas around the west coast and the Hebrides.
Vouchers 'to cut winter deaths'

Pensioners are being promised energy savings by the Liberal Democrats, as snow and cold temperatures continue.

The party says the plans could save the average pensioner £100 every year and cut winter deaths. The government gives £200 for winter fuel to households with people over 60, or £300 where people are over 80. The Tories promise to keep the payments. The Lib Dems would allow people to swap these winter fuel payments for discounts on home insulation. Shadow local government secretary Ed Davey said: "The current scheme has helped some older people, but this new Liberal Democrat approach will go much further to end the scandal of tens of thousands of old people dying from the winter cold every year." The vouchers are designed to let pensioners choose from a list of approved energy supplies who would compete for business by offering discounts on home insulation schemes. The plan would boost energy conservation, says the party - and insulation could save £100 every year for pensioner households, so using the money more "intelligently" than at present.
Kennedy calls for Iraq exit plans

Tony Blair should set out a proper exit strategy from Iraq in the wake of next Sunday's elections in the country, Lib Dem leader Charles Kennedy has said.

In a speech focusing on issues arising from the re-election of George W Bush, Mr Kennedy said Iraq had become a "crucible of militant terrorism". He wants to see a phased withdrawal of UK troops "as soon as the situation allows", he said in London. Any exit strategy must "augment and support" the democratic process.

"There are some who are of the opinion that the mere presence of British and American troops in Iraq feeds the insurgency," he said. "There is some truth in that, especially after the initial mistakes that were made - the heavy-handedness of operations like Fallujah, and the well-publicised instances of abuse at the hands of coalition forces." Mr Kennedy pointed out that the Netherlands, Portugal and the Czech Republic, which all have troops operating in the southern sector of Iraq, have announced their imminent withdrawal "regardless of the situation on the ground".

He accused Mr Blair's government of "being less than straightforward" over its plans. "Next week the prime minister should make a statement regarding the elections in Iraq," Mr Kennedy said during his City of London speech. "He should set out a proper exit strategy, including the phased withdrawal of British troops, as the security situation allows." Mr Kennedy also argued that British troops deployed in Iraq should be replaced with forces from other countries - "especially Islamic countries".
'Super union' merger plan touted

Two of Britain's big trade unions could merge to form a "super union" of two million members.

The move by Amicus and the Transport and General Workers Union (TGWU) would be a seen as a bid to carry more weight with ministers and employers. Amicus has 1.2 million members and the TGWU has 800,000. Any merger would have to be approved by the unions' executives and their membership. It is understood meetings will be held on Wednesday about the proposal. Along with the GMB and Unison, the TGWU and Amicus worked closely together in the last year to hammer out a 56-point deal with Labour's leadership over equality at work, holidays and pensions - the Warwick Agreement. Both unions are remaining tight-lipped about the merger rumours, but one insider pointed out to the BBC News website that "nobody is denying suggestions a merger could be on the agenda" when the two unions' executives hold their meetings on Wednesday. Amicus's executive was due to meet in any case although the TGWU is holding specially scheduled talks.
UK firms 'embracing e-commerce'

UK firms are embracing internet trading opportunities as never before, e-commerce minister Mike O'Brien says.

A government-commissioned study ranked the UK third in its world index of use of information and communication technology (ICT). The report suggests 69% of UK firms are now using broadband and that 30% of micro businesses are trading online. Mr O'Brien said UK businesses were sprinting forward in ICT use, but that there were more challenges ahead. The report, carried out independently by consultants Booz Allen Hamilton and HI Europe, placed the UK third behind Sweden and Ireland for business use of ICT.

It showed British business brought greater maturity to their ICT use, by using broadband in increased numbers, bringing ICT into their business plans and using new technologies such as voice activated programmes and desktop video conferences. Mr O'Brien said: "The increase in the proportion of business connected by broadband shows that UK companies are embracing the opportunities that ICT can bring. "It is particularly encouraging to see that small businesses are beginning to narrow the digital divide that appeared to have opened up in recent years." The government would play its part in "cultivating an environment where information and communication technologies can flourish", Mr O'Brien said. The "clear message" the report sends is that effective use of ICT can bring real improvements in business performance for all business.

"However, we are not at the finishing line yet and many challenges remain if the UK is to reach its aim of becoming a world-leading e-economy," he added. The International Benchmarking Study was based on 8,000 telephone interviews with businesses, of which more than 2,700 were UK businesses. It is the eighth in a series of examining the adoption and deployment of ICT in the world's most industrialised nations.
MP's shock at long lost daughter

Labour MP Stephen Pound has told of his shock and his joy on learning he fathered a daughter when he was "out of control" during the "wild" 1960s.

Lucy, 36, tracked down Mr Pound after her birth mother told her he was known as "Precious" at school. Despite being told he was a "nutter who died at sea" she found a reference to Mr Pound on Friends Reunited. Lucy's mother kept her pregnancy secret and had her adopted at four weeks. Mr Pound found out about it last year. That happened when Lucy wrote to his Parliamentary office saying she believed he was her father.

Mr Pound, who is now married with two other teenage children, said: "I was a nutter and I was a sailor but I wasn't dead." He said his first reaction was to wonder if he was victim of a "set-up" but he then realised all the dates fitted. "It was a pretty horrible thing with a pretty happy ending. I felt guilt in the marrow of my bones," said the Ealing North MP. "I don't blame Lucy's mother. I was pretty much out of control. I was 18 when she was conceived. It was a different time - it was pretty wild."

Mr Pound says he rang Lucy as soon as he got her letter, they met up and have been in contact ever since. Describing that first meeting at London's King Cross station, he said: "The earth went from under my feet ... We were walking across the Euston Road and I took her arm to take her across and there was an immediate connection. "We were finishing each other sentences." Lucy, who was adopted by a family from Essex, wants to remain anonymous for the sake of her adoptive father and her children. Mr Pound said his wife Maggie had been fully supportive and their two children Emily, 16, and Pelham, 14 were pleased to have an older sister.
Green fear for transport ballot

The Green Party is concerned thousands of residents may not be able to vote in Edinburgh's transport referendum.

Edinburgh City Council is to ballot constituents on proposals to introduce congestion charging in the capital. But Green MSP Mark Ballard fears people not on the council's edited electoral register may miss out. Local authorities can only send ballot papers to those on the edited list over non-statutory matters, such as the transport referendum. Therefore, residents who have exercised their right to have their details left off the list could miss the chance to vote.

However, there is still time for those who are not on the list to contact the council and make sure they are sent ballot forms ahead of February's voting deadline. Mr Ballard said: "This vote will set the future of transport in Edinburgh for decades to come. "It is therefore vital that as many residents as possible in Edinburgh City and the surrounding areas, are registered to vote in the ballot. "Many people are not aware that they may miss out on their chance to have a say. "Everyone involved in this debate - both for and against - wants the ballot to be as fair and representative as possible, and that means encouraging people to take part." The ballot will ask residents to vote for or against the council's proposed congestion charge scheme and a host of transport improvements to be funded by it. The outcome of the referendum will be known next month after the ballot forms are sent out and returned to the council. Towards the end of February, the council will meet to decide whether to proceed with an application to Scottish ministers for approval for its planned congestion charging scheme and the other parts of its transport package.
Boothroyd calls for Lords speaker

Betty Boothroyd has said the House of Lords needs its own Speaker and that peers should lead the way on reforming the upper chamber.

Baroness Boothroyd, who was the first woman to be Commons Speaker, said she believed Tony Blair initiated reforms without a clear outcome in mind. "Now we have to take care of it ourselves and make the best of it," she told the BBC's Breakfast with Frost. In 1999 Labour removed all but 92 of the Lords' 750 hereditary peers. That was billed as the first stage of reform of the institution. The lord chancellor hinted further reforms could be unveiled in the next Labour manifesto.

"I think we need to look very carefully at the relationship between the Lords and the Commons," Lord Falconer told BBC1's Breakfast With Frost. "How it interacts with the Commons is a very, very important issue. "We need to address the issue in the manifesto, but you will have to wait for when the manifesto comes." The lord chancellor currently has the role of House of Lords speaker. He is also head of the judiciary and a member of the Cabinet as constitutional affairs secretary.

Lady Boothroyd said she believed it was unacceptable for the lord chancellor to have the role of Speaker. "I would really like to see a Speaker of the House of Lords," she said. "I don't go for the idea of somebody - a lord chancellor - who is head of the judiciary, a senior Cabinet minister and Speaker of the Lords. "I want somebody there who is going to look after that House and do a job there.
MPs issued with Blackberry threat

MPs will be thrown out of the Commons if they use Blackberries in the chamber Speaker Michael Martin has ruled.

The £200 handheld computers can be used as a phone, pager or to send e-mails. The devices gained new prominence this week after Alastair Campbell used his to accidentally send an expletive-laden message to a Newsnight journalist. Mr Martin revealed some MPs had been using their Blackberries during debates and he also cautioned members against using hidden earpieces.

The use of electronic devices in the Commons chamber has long been frowned on. The sound of a mobile phone or a pager can result in a strong rebuke from either the Speaker or his deputies. The Speaker chairs debates in the Commons and is charged with ensuring order in the chamber and enforcing rules and conventions of the House. He or she is always an MP chosen by colleagues who, once nominated, gives up all party political allegiances.
UK troops on Ivory Coast standby

Downing Street has confirmed British troops are on standby in case they need to help evacuate several hundred UK citizens from Ivory Coast.

The news came as it emerged France had begun evacuating its hostages after days of anti-French demonstrations. Trouble flared after nine French peacekeepers were killed and President Jacques Chirac ordered the destruction of the Ivory Coast's air force. A company of 100-120 UK troops is understood to have been put on standby. They are ready to fly out and secure the route from the embassy to the airport if called upon. Prime Minister Tony Blair's official spokesman said: "There are British nationals in Ivory Coast and as you can imagine we are making the usual contingency plans in case the situation deteriorates further, but that's all I can say at this stage."

He added the situation would be monitored carefully in case evacuation became necessary. France has played a lead role in international peacekeeping in Ivory Coast - a former colony - after President Laurent Gbagbo broke an 18-month ceasefire with rebels bombing their positions and killing the nine French soldiers. The decision to destroy the African nation's small air force prompted riots against French and other foreign nationals. The Spanish have already put their forces on standby to evacuate their nationals if necessary.
Retirement age could be scrapped

The "myth that ageing is a barrier" to contributing to society needs to be "exploded", the work and pensions minister has said.

This was why the government was considering scrapping the retirement age entirely, Alan Johnson said. It was also committed to "stamping out" age discrimination and would outlaw it, he told a conference on ageing. All three parties have been wooing older voters with both the Tories and Lib Dems pledging higher pensions.

Mr Johnson told Age Concern's Age Agenda in London the government was "seriously considering" introducing pensions based on residency rather than national insurance contributions. This idea has been adopted by the Lib Dems as policy, while the Tories have pledged to boost pensions by restoring the link between earnings and pensions. Mr Johnson's speech comes after he last week unveiled plans to find a consensus on how to reform the country's pension system. This would be based on a series of principles including tackling pensioner poverty and fairer pensions for women, he said. Speaking at the London conference he said: "Generalised stereotypes of people past state pension age as dependant, incapable and vulnerable are a particularly pernicious form of age discrimination".

The government wanted to tackle this by moving to a culture where retirement ages were "increasingly consigned to the past". "We're sweeping them away entirely for people under 65, and we're giving those above that age a right to request to work past 65 which their employers will have to engage with seriously. "And the review in 2011, which will look at whether it is time to sweep retirement ages away entirely, is to be tied to evidence ... showing that retirement ages are increasingly outmoded". Mr Johnson said his department had a long-term aspiration of moving towards an 80% employment rate. This would involve an extra one million older people joining the work force, he said.
Jowell rejects 'Las Vegas' jibe

The Secretary of State for Culture, Media and Sport, Tessa Jowell, has hit out at critics of the Gambling Bill.

She told the Guardian newspaper there would be no "Las Vegas-style" super-casinos, as rumoured in the press. Meanwhile Labour backbencher Stephen Pound labelled casino-related regeneration schemes "a pile of pants". The MP for Ealing North claimed the legislation would encourage a mafia-like culture of vice and corruption, in an interview on BBC Radio 4. "You look at some of the people who are involved...they aren't in there to regenerate Blackpool. They are in it to fill their boots," Mr Pound told the Today programme. "I just really think that we have made a terrible mistake here. And over all of it hangs the shadow of the men in the chalk-stripe suits with names that rhyme with spaghetti," he said.

Ms Jowell complained of the "scale of misrepresentation" in the media over the bill in her interview with the newspaper, her first since the bill was launched. The culture secretary said a four year consultation period had produced a consensus on the need to "protect children and the vulnerable" in a swiftly changing sector. Ms Jowell insisted: "We have a good track record for extracting planning gain in this country, for instance in social housing." And continued: "We can be proud to have one of the lowest rates of problem gambling in the world. I intend to keep it that way." Ms Jowell will set out her position when the Bill is debated in the Commons on Monday. In prime minister's questions last week Tony Blair assured Parliament that 90% of the bill was about tightening up the regulation of the gambling industry.
Straw praises Kashmir moves

The UK has welcomed the decision by India and Pakistan to open a bus link across the ceasefire line dividing the disputed region of Kashmir.

Foreign Secretary Jack Straw, touring South East Asian countries, praised the "spirit of cooperation" in achieving the breakthrough. Media reports in both countries describe the deal as a major step in the ongoing peace process. Mr Straw said he hoped the agreement would make a difference to Kashmiris. The bus service was one of several announcements made after a meeting of foreign ministers of both countries in Islamabad on Wednesday. Kashmiri politicians on both sides of the Line of Control which divides the region welcomed the move.

In a statement, Mr Straw said the bus service between Srinagar and Muzaffarabad "will be able to reunite families that have been divided for decades". "This will make a real difference to the lives of Kashmiris on both sides of the Line of Control," he said. "I warmly applaud the efforts of both India and Pakistan to make this happen. "This spirit of cooperation will, I hope, lead to many more measures that will benefit all in the region."

On Thursday Mr Straw was in India visiting Sikhism's holiest shrine, the Golden Temple in Amritsar where he tried his hand at making Indian bread or roti. He is due to take part in talks with the Indian government on Friday. A second bus service linking the Pakistani city of Lahore with Amritsar in India was also announced as well as a rail link between Rajasthan state and Pakistan's Sindh province. Both sides agreed to begin talks on reducing the risk of nuclear accidents and also said they planned to reopen their respective consulates in Karachi and Mumbai (Bombay). The mountainous region of Kashmir has been a flashpoint between the two nuclear powers for more than 50 years.
UK helps raped Rwandan women

Britain is to give a £4m grant to help women survivors of the Rwandan genocide who were raped and often deliberately infected with HIV/Aids.

An estimated 25,000 girls and women were raped during the 1994 genocide. About 800,000 Tutsis and moderate Hutus were killed by Hutu militias after the assassination of an ethnic Hutu leader. The five-year Department for International Development funding will enable more survivors to have access to anti-retroviral treatment.

The plight of the infected women was overshadowed for a long time. It was overshadowed by Rwanda's emergence from the 100 days of slaughter, during which time the mass killings took place, and the women's fate was largely a taboo subject. But many of the women were widowed and they now not only have their own children to care for but, in many cases, orphans too.

As the women die, the number of Rwanda's orphans rises. Until recently, very few of the women have had access to anti-retroviral treatment. That is now starting to change. This funding is intended to make anti-retrovirals and other care available for some 2,500 women. Mary Kayitesi Blewitt, founder of the Survivors Fund (SURF), one of the organisations through which the funds are being channelled, said it was a recognition, before it was too late, that the survivors should be a priority for help.
MP attacked by muggers in Kenya

An MP has had more than £600 and his passport stolen after being mugged by six men in a park in Kenya.

Quentin Davies, the MP for Grantham and Stamford, was attacked in a notoriously dangerous park in the capital, Nairobi. He was not hurt in the mugging on Saturday evening. Several people are being questioned over the attack. He was in Kenya before travelling to Sudan with the Parliamentary committee. Local police were said to be "surprised" he was in the area. Mr Davies, 60, said the mugging occurred 100 yards from the Nairobi Serena Hotel and equally close to the Anglican Cathedral in the centre of the city at dusk.

He said in a statement: "It was a frightening experience. "Six men managed to steal up on me and grab me from behind. "I knew I had to stay very calm and passive - you cannot fight six men". He had to spend an extra 24 hours in Nairobi before rejoining the rest of the House of Commons International Development Committee in Dafur after the mugging. "Naturally, I was afraid they would use a knife or gun, though they never produced any weapon," he said. "Two of them held me from behind and two others held my legs and another one expertly rifled all my pockets."
Candidate resigns over BNP link

A prospective candidate for the UK Independence Party (UKIP) has resigned after admitting a "brief attachment" to the British National Party(BNP).

Nicholas Betts-Green, who had been selected to fight the Suffolk Coastal seat, quit after reports in a newspaper that he attended a BNP meeting. The former teacher confirmed he had attended the meeting but said that was the only contact he had with the group. Mr Betts-Green resigned after being questioned by the party's leadership. A UKIP spokesman said Mr Betts-Green's resignation followed disclosures in the East Anglian Daily Times last month about his attendance at a BNP meeting. "He did once attend a BNP meeting. He did not like what he saw and heard and will take no further part of it," the spokesman added. A meeting of Suffolk Coastal UKIP members is due to be held next week to discuss a replacement. Mr Betts-Green, of Woodbridge, Suffolk, has also resigned as UKIP's branch chairman.
Galloway plea for hostage release

Ex-Labour MP George Galloway has appealed for the release of aid worker Margaret Hassan, kidnapped in Iraq.

Mrs Hassan, 59, who led Care International operations in Iraq, was abducted in Baghdad on 19 October. Mr Galloway was expelled from the Labour party because of his staunch opposition to the war on Iraq. He denied an earlier report that he planned to make a direct appeal to the kidnappers via the Al-Jazeera Arabic television channel.

Speaking in London on Saturday at the first annual delegate conference of his newly-founded party, the Respect Coalition, he said: "I have deliberately not involved myself before in any of these situations. "But this woman has been a prominent opponent of both the war and the preceding years of sanctions. "I am prepared to do anything I can to help save her life." A spokesman later said Mr Galloway had friends in common with Ms Hassan, who he described as a prominent anti-war activist, and that he was "willing to do anything - go to Iraq or be an intermediary or anything that's necessary". Since her abduction, several videos of Mrs Hassan have been broadcast by Al-Jazeera. The latest footage showed Mrs Hassan asking for British troops to be pulled out of Iraq. She also urged Care International, the aid agency she works for, to close its office in Baghdad, and appealed for Iraqi women prisoners to be freed. Care has since closed down all its operations in Iraq.
Petrol duties frozen, Brown says

Chancellor Gordon Brown has announced a freeze on fuel duty in his pre-budget speech to the Commons on Thursday.

Mr Brown told the House that government policy is to raise fuel duty at least in line with inflation each year to fulfil environmental commitments. But this financial year, because of "volatility in the oil market", he said the duty would be frozen. During 2000 many motorists campaigned against the rises but environmentalists believe less duty means more pollution. He said: "It is our policy that each year fuel duties should rise at least in line with inflation as we seek to meet our targets for reducing polluting emmissions and fund our public services. "But this financial year because of the sustained volatility in the oil market I propose to match the freeze in car vehicle licence duty with a continuation on the freeze on the main road fuel duties."

The RAC welcomed the news, calling it an "early Christmas present" for motorists. But the organisation urged drivers to continue to shop around to get the best price for petrol. Environmental group Transport 2000 said the freeze sends the wrong message to motorists. "We are concerned that although Britain leads the world in rhetoric about climate change it often fails in practical action," said a spokesman. In 2000 the People's Fuel Lobby caused chaos by blocking roads with slow-moving convoys after Mr Brown threatened to raise fuel taxes. The chancellor did not raise duty that year, but despite threats of more protests in 2003, he added 1.28p per litre.
Turkey deal 'to help world peace'

A deal bringing Turkey a step closer to EU membership is of "fundamental importance" to the peace and security of the world, Tony Blair has said.

The deal, struck at the European Council last week, also proved claims of a clash between Muslims and Christians were "wrong", Mr Blair said. It represented the achievement of an "historic British objective", he added. Tory leader Michael Howard said the deal laid to rest any suggestion the EU was "anti-Islamic".

Turkey's involvement with the EU would provide an "invaluable bridge" between Europe and the rest of the world, Mr Howard added. But the Tory leader argued that the EU constitution was not designed to take in a country as large as Turkey. Mr Blair has been a leading advocate of Turkish membership despite controversy surrounding the idea. He insisted that the Turkish leadership had made great advances in improving its human rights records. The deal to open formal talks with Ankara came despite an EU demand for Turkey to recognise Cyprus.

It was agreed the issue can be tackled at a later date but Turkish premier Recep Erdogan had to accept negotiations did not guarantee his country full EU membership. The internationally recognised southern part of Cyprus is an EU member, but Turkey, which occupies northern Cyprus, had previously insisted it would not bow to demands to recognise the country, calling the issue a "red line". It could take up to 15 years before Turkey is able to join, and entry cannot be guaranteed. If it joins, Turkey may have to accept restrictions to limit migration by its citizens. The EU has also announced that it will start accession talks with Croatia in April 2005. However, talks will begin only if the country co-operates fully with the UN war crimes tribunal for the former Yugoslavia.
Protect whistleblowers, TUC says

The government should change the law to give more protection to employees who raise health and safety concerns about their workplaces, the TUC has said.

It said data from employment tribunals suggested 1,500 "safety whistleblowers" had lost their jobs since 1999. Some firms found it cheaper to sack a worker than to improve buildings or change working conditions, it said. The Health and Safety Executive said it was trying to get workers more involved in helping to make workplaces safer. The TUC figures were drawn from unfair dismissal cases at tribunals were health and safety were the main issue.

Safety representatives were often ignored when raising concerns because there was no legal duty to respond, claimed the union organisation. General secretary Brendan Barber said: "It shouldn't be a firing offence to object to unsafe work. "Workers should not be placed in the situation where they are forced to choose between risking their job or risking their personal health and safety." Mr Barber, who said the "problem is far worse than official statistics show", called for a legal system that "protects safety whistleblowers". He added that workers who are not in a union, as well as casual and migrant workers, "stand little chance of redress."

Rory O' Neill, editor of union-backed Hazards magazine, which conducted the research, said: "Giving union safety reps more rights in more workplaces is the ultimate win-win. "Death and injuries at work increased last year, for the second time since the turn of the century. "It would be a fatal mistake not to take full advantage of the union safety effect." The TUC has called on the government to appoint "roving" safety reps and to increase spending on health and safety work inspections. The Health and Safety Executive had said that it had launched an initiative to make factories and offices safer, with more worker involvement.
Kinnock to urge reform in Lords

Neil Kinnock has said his acceptance of a seat in the House of Lords will allow him to help "achieve further progress with substantial democratic reform."

On the BBC's Breakfast with Frost it was put to Mr Kinnock that he had once referred to Lords members as "brigands, muggers, bribers and gangsters". But the outgoing European Commissioner said his comments - made some 26 years ago - needed to be put in context. He said advocates for reform needed to be inside the Lords to vote for it. "It was pointed out to me that if the additional democratic reform is going to take place it is going to require advocates in the Lords and people there willing to vote for it."

Mr Kinnock added that the second factor behind his acceptance of the peerage was his appointment as chairman of the British Council. "History demonstrates that it's immensely useful for the British Council to have its chairman in the House of Lords and that was a conclusive factor." Mr Kinnock said he thought about the decision for "quite a long time" because he had long had reservations about the Lords. But he added: "The process of reform has developed substantially but not sufficiently, and consequently I did take all these factors into consideration because it's not a decision to be made glibly." The former Labour leader said he would probably take the title of Lord Kinnock of Bedwellty - his first constituency for which he was selected in 1969.
McConnell details Scots wave toll

At least three people from Scotland died in the tsunami disaster and a further three are on the missing list, the first minister has told MSPs.

The figures came out during a statement by Jack McConnell to the Scottish Parliament on Wednesday. He formally expressed Scotland's sympathy for the victims of the Indian Ocean tidal wave which killed 150,000. Mr McConnell went on to promise that Scotland would play its part in the reconstruction effort. He said the provisional figures on the dead and lost had been provided by the police.

Mr McConnell said the tragedy should persuade everyone to step up the fight against global poverty and change the world for the better. He said he was proud of the generous response of people in Scotland to the disaster appeal, which is expected soon to top £20m. The first minister also praised Scottish Water for immediately flying bottled water and five large generators to the disaster zone. The Scottish Executive has seconded 11 staff to the aid agencies.

But he said Scotland was "in it for the long term" with help planned for fishing communities, for children's services, and for the aid charities. He said 2005 must be the year that Scotland showed clearly it cared for what happened to people elsewhere in the world, whether in Asia or in Africa. Mr McConnell went on to signal that the executive would play its part in the Make Poverty History campaign being mounted by a variety of aid charities, trade unions and churches in the run-up to the G8 summit in Gleneagles in July. Edinburgh architect, Dominic Stephenson, became the first Scot to be confirmed as a victim of the Asian tsunami. The 27-year-old was holidaying on the Thai island of Koh Phi Phi with Eileen Lee, 24. She is still missing.
Tories pledge free sports lessons

Children would be offered two hours' free sports training a week by a future Tory government, the party has said.

The Club2School policy would provide up to £250m yearly for local sports clubs in the UK to deliver after-school sport. The extra coaching would be funded by the National Lottery and would come on top of the two hours of sport a week children are supposed to get in school. Shadow home secretary David Davis said five million children were being denied adequate sporting opportunities.

The plans would help tackle the "fastest growing rate of obesity in the developed world", he said. Shadow sports minister Lord Moynihan said the policy would empower local clubs and create a lasting legacy. "We aim to shift the emphasis on after-school sport provision away from our overstretched teachers and schools directly in to the 151,000 sports clubs in the UK." The Tories say Labour's plans to give all children two hours of sports lessons a week in schools have failed. Government figures show that in England in 2002 only a third of schools at Key Stages 1, 3 and 4 and two-fifths of schools at Key Stage 2, met that target. The Tories also claim that of the £750m the prime minister pledged in 2000 to invest on school sports facilities, only £41m had been spent. But the Big Lottery Fund has said that complex capital projects are involved - and it was confident the money would all be allocated by next year as intended.
Hatfield executives go on trial

Engineering firm Balfour Beatty and five railway managers are to go on trial for manslaughter over the Hatfield rail crash in 2000.

Four people died when a section of rail broke and a high speed train derailed. Balfour Beatty's railway maintenance arm was in charge of the upkeep of the line at Hatfield, Hertfordshire. Balfour Beatty managers Anthony Walker and Nicholas Jeffries, and Railtrack managers Alistair Cook, Sean Fugill and Keith Lea all face individual charges. All five men, along with four others, are also accused of breaches of health and safety laws. Balfour Beatty Rail Maintenance faces a corporate manslaughter charge. It is expected the trial could last as long as a year. The accident, on 17 October 2000, happened when the London to Leeds express came off the tracks at 115 mph, when it was derailed by a cracked section of rail. The accident on the East Coast Main Line sparked major disruption. The overall responsibility for the line was Railtrack's - the company that has now become Network Rail. Those who died in the accident were Steve Arthur, 46, from Pease Pottage, West Sussex; Peter Monkhouse, 50, of Headingley, Leeds; Leslie Gray, 43, of Tuxford, Nottingham; and Robert James Alcorn, 37, of Auckland, New Zealand.
Security papers 'found in street'

An inquiry is under way after files containing security details about the Pakistani president's visit to London were found by a member of the public.

The files are believed to contain detailed security arrangements for Gen Pervez Musharraf's visit this week, including police codes. Scotland Yard said the policing operation had been reviewed. A spokesman said President Musharraf's safety had not been compromised, as the papers had been handed in promptly. "We cannot discuss who was responsible for the documents, only that they contained the policing arrangements for the official visit," said the spokesman.

The papers are believed to have been found by a member of the public in a street in Mayfair and given to the Mirror newspaper. The police spokesman said the newspaper handed the report over on Monday. The force's Directorate of Professional Standards is investigating the circumstances surrounding the loss of the documents, he said. Gen Musharraf held talks with Tony Blair on Monday. He arrived in Britain on Sunday night after flying from the United States, where he met President George W Bush. He is due to visit the Pakistani community in Manchester on Tuesday afternoon.
Howard 'truanted to play snooker'

Conservative leader Michael Howard has admitted he used to play truant to spend time with his school friends at a snooker hall.

Mr Howard said his time at Jack's Snooker Hall in Llanelli in the 1950s had not done him "any lasting damage". But he told the Times Educational Supplement that truancy was "very bad" and said "firm action" was needed. Mr Howard also called for a return to O-levels and more classroom discipline.

Mr Howard eventually left Llanelli Grammar School - and the snooker hall - to go to Cambridge University. He said: "I don't think it's done me any lasting damage. Nor has it made me a snooker world champion. "There might have been some occasions when we left early of an afternoon.

"I'm just being honest. I think truancy is a very bad thing and that firm action should be taken to deal with it." Another player who has failed to win snooker's world championship - Jimmy "the Whirlwind " White - has previously admitted missing lessons, instead spending his days in smoky halls. "Tony Meo [another player] and me used to spend all of our spare time there," Mr White said, "We loved the game and the atmosphere. "School went out of the window. I went for a while and then started taking time off." Mr Howard's fellow Welshman Ray Reardon - known by his fellow professionals as "Dracula" - won the snooker world championship six times, having left school at 14 to work as a miner. And Terry Griffiths, like Mr Howard from Llanelli, won the tournament in 1979. It is not known whether the two of them ever clashed cues at Jack's.
Short attacks US over tsunami aid

Former Cabinet minister Clare Short has criticised the US-led tsunami aid coalition, saying the UN should be leading efforts.

President Bush has announced that an alliance of the US, India, Australia and Japan will co-ordinate a humanitarian drive. But Ms Short said the effect of the parallel coalition would be to undermine the UN. She said only the UN had the "moral authority" to lead the relief work. Ms Short resigned as international development secretary over the Iraq war. "I think this initiative from America to set up four countries claiming to co-ordinate sounds like yet another attempt to undermine the UN when it is the best system we have got and the one that needs building up," she said. "Only really the UN can do that job," she told BBC Radio Four's PM programme. "It is the only body that has the moral authority. But it can only do it well if it is backed up by the authority of the great powers." Ms Short said the countries involved could not boast good records on their response to major disasters. The US was "very bad at coordinating with anyone" and India had its own problems, Ms Short said. "I don't know what that is about but it sounds very much, I am afraid, like the US trying to have a separate operation and not work with the rest of the world through the UN system," she added.
Cherie accused of attacking Bush

Cherie Blair has been accused of criticising George W Bush's policies in a private address she gave during a United States lecture tour.

The prime minister's wife is said to have praised the Supreme Court for overruling the White House on the legal rights of Guantanamo Bay detainees. The Tories said she broke a convention that British political figures do not act in a partisan way when abroad. But Downing Street said she was speaking in her capacity as a lawyer. It said she was not expressing political opinions. Mrs Blair's remarks are said to have been made in a speech to law students in Massachusetts. She said the decision by the US Supreme Court to give legal protection to two Britons held at Guantanamo Bay was a significant victory for human rights and the international rule of law. She also described the US legal code as an outdated grandfather clock and welcomed a decision to throw out a law backed by Mr Bush relating to sodomy in Texas.

BBC news correspondent Gary O'Donoghue said Mrs Blair was likely to face further calls for restraint, since the US election is imminent. "There have been some objections from people reasonably close to the Bush administration about her making these comments in their backyard just two days before a presidential election," he said. "Conservatives here too have made their feelings clear. "Cherie Booth has always regarded herself as having an independent career. She has continued to practise as a major human rights lawyer in the courts. "It's not unusual for her to make these sorts of criticisms clear but it can be embarrassing."
Tsunami 'won't divert Africa aid'

UK aid to help the victims of the Asian tsunami disaster will not take much needed relief from Africa, Prime Minister Tony Blair has promised.

Mr Blair told the BBC's Breakfast with Frost show the money spent on the tsunami would not "invade" the money Britain wanted to spend on Africa. Questioned about the disaster, he said his faith in God had not been shaken. He added he would give new figures on the number of tsunami-related British deaths to the Commons on Monday. Foreign Secretary Jack Straw said on Friday that about 440 Britons were either dead or missing in the disaster.

Mr Blair told Sunday's programme: "Since Jack Straw gave those figures a couple of days ago they haven't moved a great deal, which should give us some hope that we are beginning to reach the peak of the numbers. But we just can't be sure. "It is just an immensely difficult job to get absolutely accurate figures, all countries are struggling with this."

He said the £50 million originally allocated from the Department for International Development was now "well on the way" to being spent. But the exact allocation could not be clarified until the World Bank had completed its assessment of the needs of the countries affected. Within the next few weeks a clearer picture would emerge of the long-term costs of reconstruction, he added. But he pledged that Africa - which sees a "preventable" tsunami-size death toll every month from conflict, disease and poverty - would not be neglected. As Britain takes up its presidency of the G8 group of leading nations, Mr Blair said ministers had a big agenda for Africa. "For the first time we have a plan that won't just deal with aid and debt but will also deal on issues of governance within African countries and conflict resolution," he said. "A lot of the problems in Africa come from conflict, that again are preventable, but only with the right systems in place."
Blair 'pressing US on climate'

Tony Blair is pressing the US to cut greenhouse gases despite its unwillingness to sign the Kyoto Protocol, Downing Street has indicated.

Officials have confirmed climate change was discussed when influential senator John McCain recently visited Mr Blair. Climate change was an issue the prime minister "wanted to progress" during the UK's presidency of the G8 and EU in 2005, said a spokesman. But he played down reports Mr Blair was considering a new US-friendly treaty.

According to the Times, the UK leader wants to end US isolation with a "Kyoto-lite" agreement on the scale and nature of the threat from climate change. He is said to have discussed the idea with Mr McCain during his time at Number 10. The prime minister is said to believe the United States' refusal to sign the Kyoto Protocol on emissions is undermining other countries' resolve to cut carbon dioxide production. So far the US has refused to sign up to the Kyoto treaty - which aims to cut emissions - branding it politically motivated and not based on science. President Bush's advisers have repeatedly denied global warming is taking place.

Europe, which disputes the claim, has also signalled it wants to press ahead with talks about longer term climate change action in a way which involves both the United States and developing countries. Mr Blair's reported treaty would also establish an international programme to develop technology needed for renewable energy and the reduction of carbon emissions, says the Times. But there is still apparently "little prospect" of America agreeing to cut emissions, which could further provoke environmental campaigners already angry at the lack of progress. Mr Blair was left blushing on Wednesday when it emerged his manifesto target of a 20% cut to the 1990 greenhouse gas level by 2010 was set to be missed.
Howard rejects BNP's claim

Tory leader Michael Howard has dismissed claims that his immigration policy was "moving onto the turf" of the British National Party (BNP).

BNP leader Nick Griffin told the Independent he expected some BNP voters to switch to the Tories over the issue. But Mr Howard said he rejected the idea that the Tories and BNP appealed to the same voting instincts. Asked if he would welcome BNP voters he told the BBC: "I don't want anybody to vote for these extremist parties". He added, on BBC Radio 4's Today programme: "If you want good community relations in this country...then you have to have firm, fair immigration controls."

The Tories have promised an upper limit on the number of people allowed into Britain with the slogan: "It's not racist to impose limits on immigration". All parties are stepping up campaiging in the run-up to the general election, widely expected to be called for 5 May. Labour has unveiled its own "points system" for ensuring migrants who want to work in the UK have skills that are required, but have rejected immigration quotas. The Liberal Democrats have warned both parties against "pandering to prejudice".

Mr Griffin told the Independent the Tories' plans were "a definite move onto our turf". He said: "I quite freely accept that on a nationwide basis, the Tories will con enough people to make a significant hole in our vote." Asked whether he was comfortable with the perception that the Conservatives and the BNP appeal to the same voting instincts, Mr Howard told the BBC: "I reject that entirely". He said he found BNP's policies "abhorrent" but he said the UK had to take a different approach to immigration, which he said was out of control. "The government doesn't want to limit it in any way, we do, there's a legitimate difference between us there which we can discuss in a calm, rational and reasonable way," he said. He again rejected newspaper speculation that his own father entered Britain illegally.
Blair's hope for Blunkett return

The events leading to David Blunkett's resignation must not "swept under the carpet", the Tories have warned.

On Wednesday Tony Blair said he hoped the former home secretary would serve again in government in the future. Mr Blunkett quit in December after a probe linked him to the visa application of his ex-lover's nanny. Mr Blair said he left "without a stain on his character" but Tory Dominic Grieve branded the way Mr Blunkett's office operated as "scandalous". Mr Blair told BBC Radio 4's Today programme: "I know David very well and I believe him to be a man of real integrity and real ability and I was very sad for him as to what happened."

He said Mr Blunkett still had an immense amount to offer the country but he was not making any "guarantees or definitive statements" about future jobs. But shadow attorney general Mr Grieve said: "While I don't rule out the possibility that Mr Blunkett may return as a minister, I don't think it's something that can simply be brushed under the carpet." Senior Labour backbencher Martin O'Neill, who chairs the Commons trade committee, said he believed the prime minister would want one of his "praetorian guard" - a reference to the elite body guard of Roman emperors - back alongside him. But colleague Ian Gibson, who chairs the science and technology committee, said there was a "question mark" as to whether Mr Blunkett could serve at cabinet level again.
February poll claim 'speculation'

Reports that Tony Blair is planning a snap general election for February 2005 have been described as "idle speculation" by Downing Street.

A spokesman said he had "no idea" where the reports in the Sunday Times and Sunday Telegraph had come from. The papers suggest ministers believe the government could benefit from a "Baghdad bounce" following successful Iraq elections in January. A British general election was last held in February in 1974. In that election, Edward Heath lost and failed to build a coalition with the Liberals. Harold Wilson took over and increased his majority later in the year in a second election

The latest speculation suggests the prime minister favours a February poll in order to exploit his current opinion poll lead over Conservative leader Michael Howard. But that strategy could prompt criticism he was seeking to "cut and run" after less then four years of a parliamentary term. The papers report that Alan Milburn, Labour's head of elections strategy, has played a key role in the plan for a February election, which would include a New Year advertising blitz. New Labour's campaign, both newspapers said, would be centred around the slogan "Britain is Working". A Labour Party spokesman said the election date was ultimately a matter for Mr Blair, but he was unaware of anything to suggest it would be in February. Most commentators have been expecting an election on 5 May. The last election was in June 2001.
Gurkhas to help tsunami victims

Britain has offered to send a company of 120 Gurkhas to assist with the tsunami relief effort in Indonesia, Downing Street said.

The deployment would involve troops from the 2nd Battalion Royal Gurkha Rifles, based in Brunei. Discussions have begun with Indonesia on the exact timing and location of the deployment, but the government said the offer was aimed at the Aceh province. Downing St said a similar offer might be made to the Sri Lankan government.

However a spokesman pointed out that there were particular logistical difficulties in Indonesia which the Gurkhas might be able to help with. The spokesman said: "Following this morning's daily coordination meeting on the post-tsunami relief effort, the government has formally offered the Indonesian government the assistance of a company of British Army Gurkhas from 2nd Battalion Royal Gurkha Rifles around 120 personnel and two helicopters. "This is in addition to the ships and aircraft we have already committed to the relief operation in the Indian Ocean."

Indonesia was by far the country worst affected by the tsunami, with 94,000 of the 140,000 confirmed deaths so far. International Development Minister Gareth Thomas said the assistance offer would most likely focus on the northern province of Aceh. "We have offered the Gurkhas to help in the process of scaling up the relief effort, particularly in Aceh which is undoubtedly the hardest hit area in the Indian Ocean at the moment," he said. "We've also had RAF aircraft flying in equipment which the UN desperately need in order to set up a truly effective relief operation on the ground in Aceh province as well." The offer comes as the Foreign Secretary Jack Straw arrives in Indonesia for a special summit meeting on the disaster.
Tory expert denies defeatism

The Conservatives' campaign director has denied a report claiming he warned Michael Howard the party could not win the next general election.

The Times on Monday said Australian Lynton Crosby told the party leader to focus on trying to increase the Tories' Commons presence by 25 to 30 seats. But Mr Crosby said in a statement: "I have never had any such conversation... and I do not hold that view." Mr Howard later added there was not "one iota" of truth in the report. The strategist helped Australia's PM, John Howard, win four elections. Mr Howard appointed Mr Crosby as his elections chief last October. Mr Crosby's statement said: "The Conservative Party has been making an impact on the issues of lower tax and controlled immigration over the past week." It added: "The Labour Party will be wanting to do all they can to distract attention away from the issues that really matter to people."
Schools to take part in mock poll

Record numbers of schools across the UK are to take part in a mock general election backed by the government.

Some 600 schools have already signed up for the Y Vote Mock Elections 2005 run by the Hansard Society and aimed at boosting interest in politics. Pupils in the schools taking part will learn the skills of speech writers, canvassers and political candidates. Schools Minister Stephen Twigg said engaging young people's interest was "essential" to the future of democracy.

He added: said "Young people who are engaged and motivated by the political process are essential to the future health of our democracy. "The mock elections initiative provides an opportunity for pupils to develop their own understanding of how the democratic process works and why it matters. "By experiencing the election process first hand - from running a campaign to the declaration of the final result - we hope that young people will develop the enthusiasm to take part in the future." The Hansard Society, the Electoral Commission and the Department for Education and Skills are running the programme. Pupils will stand as party candidates, speech writers and canvassers. Michael Raftery, project manager at the Hansard Society, said: "The Y Vote Mock Elections for schools mirror the excitement and buzz of a real election, raising awareness of citizenship, and the benefits of active democracy." The mock votes will take place around 5 May, widely expected to be the date of the general election. Information packs, including ballot papers and manifesto guides, with elections happening in early May were sent out to the 3,000 schools invited to take part.
Voters 'reject EU by two to one'

British voters would reject the European constitution by two to one, according to a poll posing the question the government will put to the country.

The Daily Telegraph poll suggests that 45% of people would vote against the constitution and 24% in favour. However the YouGov poll, which questioned 1,943 British adults online, found 25% did not know how they would vote if forced to decide tomorrow. Only 51% of those polled had made up their minds about the constitution. Another 7% said they would not vote at all. The poll is believed to be the first to pose the question which the government has chosen for the upcoming referendum, expected in 2006. The constitution will be incorporated into UK law if there is a yes vote.

Ballot papers in the poll will ask: "Should the United Kingdom approve the treaty establishing a constitution for the European Union?" The government unveiled the question which will be asked earlier in the week.

The treaty was signed by all 25 current EU members in Rome last October and is due to come into force in November 2006, providing it is ratified by all member states - several of which will hold a referendum. Critics say the constitution is a further step towards a federal Europe, but advocates say it ensures effective operation of the enlarged 25-state EU. "If we reject this treaty, Britain will be isolated and weak in Europe," said Foreign Secretary Jack Straw, after the question was unveiled. Mr Straw, along with the rest of the Cabinet, will back a "yes" vote. Meanwhile, Conservative shadow foreign secretary Michael Ancram said the referendum question "seems straightforward". But he accused the government of trying to confuse the issue by putting the EU referendum question in the same bill as the ratification of the constitution, when they should be treated as "two separate issues".
Kennedy questions trust of Blair

Lib Dem leader Charles Kennedy has said voters now have a "fundamental lack of trust" of Tony Blair as prime minister.

He said backing his party was not a wasted vote, adding that with the Lib Dems "what you see is what you get". He made his comments at the start of a day of appearances on Channel Five in a session on The Wright Stuff programme. Questions from callers, a studio audience and the show's presenter covered Lib Dem tax plans, anti-terror laws and immigration.

Mr Kennedy said during his nearly 22 years in Parliament he had seen prime ministers and party leaders come and go and knew the pitfalls of British politics. "1983 was when I was first elected as an MP - so Tony Blair, Michael Howard and myself were all class of '83 - and over that nearly quarter of a century the world has changed out of recognition," he said. "We don't actually hear the argument any longer: 'Lib Dems, good people, reasonable ideas but only if we thought they could win around here - it's a wasted vote'. "You don't hear that because the evidence of people's senses demonstrates that it isn't a wasted vote." But he said Mr Blair had lost the trust of the British people. "There is a fundamental lack of trust in Tony Blair as prime minister and in his government," he said.

"What we've got to do as a party - what I've got to do as a leader of this party - is to convey to people that what you see is what you get." Mr Kennedy also used his TV appearance to defend his party's plans to increase income tax to 50% for those earning more than £100,000, saying it would apply to just 1% of the population. He said the extra revenue would allow his party to get rid of tuition and top-up fees, introduce free personal care for the elderly and replace the council tax with a local income tax. Mr Blair has already spent a day with Five and Michael Howard is booked for a similar session.
Tories unveil quango blitz plans

Plans to abolish 162 quangos have been unveiled by the Conservatives as part of their effort to show how government red tape can be cut.

Six government units would also be scrapped under proposals which the Tories say would save more than £4.3bn. Among the targets are strategic health authorities and the new fair access regulator for universities. Tory frontbencher John Redwood said Britain needed a slimmer government and lower taxes to be competitive.

The plans would abolish regional assemblies and other regional bodies, such as boards tackling industrial development and housing. Their powers would be returned to elected local councils or national government. The Tories say the strategic health authorities are not needed as it is better that local people, rather than officials, run hospitals and surgeries.

Announcing the plans, Mr Redwood said: "Mr Blair has forgotten the interests of taxpayers, and has broken the pledges he made. "Far from improving public services, spending taxpayers' money on quangos has led only to more bureaucrats, more regulation and higher taxes." His party leader, Michael Howard, argued a change in direction was needed to get a grip on spending. "Labour are creating Two Britains: the Britain of the forgotten majority and bureaucratic Britain," he said. "In the real world, people are working harder just to stand still. They've seen their pensions knocked for six. "They're being squeezed by extra taxes. The forgotten majority are paying the price of bureaucratic Britain." The government has announced plans to cut 100,000 civil servants as part of its efficiency drive. The Liberal Democrats have said they would cut the number of Whitehall departments to make sure money reaches frontline services.
Labour pig poster 'anti-Semitic'

The Labour Party has been accused of anti-Semitism over a poster depicting Michael Howard and Oliver Letwin - who are both Jewish - as flying pigs.

Prospective Tory candidate Andrew Mennear, whose Finchley constituency contains a large Jewish community, branded it "tasteless" and offensive. The poster shows the two men's faces superimposed on winged pigs and says "the day the Tory sums add up". Labour said the poster was "not anti-Jewish, but anti-Tory".

It is one of four designs e-mailed to Labour members, who were asked to vote for their favourite. Mr Mennear, who was sent the e-mail by a friend, said he had been "shocked" by the image and had shown it to friends who were similarly horrified. He said there was nothing more distasteful for a Jewish person than to be associated with a pig. "I am not suggesting there is any deliberate intent, but these sort of things can cause great offence. It clearly wasn't thought through. "It is possible the posters were designed for maximum impact, but this one clearly overstepped the mark and should be withdrawn."

The campaign was particularly insensitive as it had come out at the same time as Holocaust Day, a "difficult" time for many Jewish people, Mr Mennear added. A Labour spokesman denied the campaign was anti-Semitic. "As we said at the time the James report (the Tory backed inquiry into possible public spending savings) was published pigs will fly before the Tory's sums will add up. This poster is making a serious point," he said. A Conservative Party spokesman said: "While the Conservatives are concentrating on the issues that matter to people, such as lower taxes and controlled immigration, it is clear to see that the Labour Party is not. People will not be fooled."
Probe launched on Ken Nazi jibe

An investigation by the Standards Board is under way following allegations that Ken Livingstone has brought his office into disrepute.

The probe follows the London mayor's comments to a Jewish journalist comparing him to a concentration camp guard, after a party about a week ago. The local government watchdog also said the allegation related to a failure to respect others. It has the power to suspend or bar Labour's Mr Livingstone from office. A complaint was made to the body by the Board of Deputies of British Jews and the Commission for Racial Equality.

Speaking after the investigation was announced Bob Neill, leader of the London Assembly Conservatives, said: "He has behaved in a manner unbecoming of his office and in so doing, has shown extraordinarily poor civic leadership. "His administration is now in crisis." On Sunday, Deputy Mayor Nicky Gavron told the BBC's Politics Show she believed the Mayor of London would say sorry on Tuesday for offending the wider Jewish community. The Prime Minister Tony Blair is among those who have called for an apology but so far the mayor has refused.

The mayor accused Oliver Finegold, of the Evening Standard newspaper, of "doorstepping" him at a "predominately gay event" held for MP Chris Smith. Ms Gavron said she thought Mr Livingstone's comments were "inappropriate" but she did not believe the mayor was anti-Semitic. She said: "I work very closely with Ken so I can speak of what he's like in his guarded and unguarded moments and... he is in no way anti-Jewish, I wouldn't for a moment work with him if he were. "On the other hand, I think his remarks were inappropriate and I believe it is important, and I believe he will, come to the point where he says, 'I regret that I have caused offence to the wider Jewish community'. "I hope he will do it soon and it is mooted that he is going to make some sort of statement on Tuesday."
'Few ready' for information act

Thousands of public bodies are ill-prepared for the Freedom of Information Act, due to come into force next month, because of government failures, say MPs.

From next month anyone will have the power to demand information from a range of public bodies - from Whitehall departments to doctors' surgeries. But an all-party committee said it was "not confident" many would be ready. It blamed the Department for Constitutional Affairs for a "lack of consistent leadership".

The Act comes into effect in England, Wales and Northern Ireland, on 1 January while similar measures are being brought in at the same time in Scotland. It provides the public with a right of access to information held by about 100,000 public bodies, subject to various exemptions.

But the government department responsible for implementing the change suffered from an "unusually high turnover" of staff within the department, which had "seriously interfered" with its work, said the Constitutional Affairs Select Committee. It said, despite four years of preparations, some local authorities and parts of the health sector were still not ready. The DCA had "failed" to provide early guidance on technical matters and shown a "lack of consistent leadership", the MPs found. Committee chairman Alan Beith said: "The DCA has had four years to prepare for freedom of information, but with less than a month to go it appears that some bodies may not be well enough prepared. "Our report shows that in the past support and guidance from the DCA, which has overall responsibility for guiding the public sector through the process of implementation for the freedom of information regime, has been lacking." A spokesman for the DCA said: "The DCA has provided - and will continue to provide - strong, clear leadership. "It has delivered a simple, liberal fees regime, guidance on the Act which has been widely praised, and expert networks of staff working on freedom of information implementation."
Lib Dems' new election PR chief

The Lib Dems have appointed a senior figure from BT to be the party's new communications chief for their next general election effort.

Sandy Walkington will now work with senior figures such as Matthew Taylor on completing the party manifesto. Party chief executive Lord Rennard said the appointment was a "significant strengthening of the Lib Dem team". Mr Walkington said he wanted the party to be ready for any "mischief" rivals or the media tried to throw at it.

"My role will be to ensure this new public profile is effectively communicated at all levels," he said. "I also know the party will be put under scrutiny in the media and from the other parties as never before - and we will need to show ourselves ready and prepared to counter the mischief and misrepresentation that all too often comes from the party's opponents. "The party is already demonstrating on every issue that it is the effective opposition." Mr Walkington's new job title is director of general election communications.
Jack Cunningham to stand down

Veteran Labour MP and former Cabinet minister Jack Cunningham has said he will stand down at the next election.

One of the few Blair-era ministers to serve under Jim Callaghan, he was given the agriculture portfolio when Labour regained power in 1997. Mr Cunningham went on to become Tony Blair's "cabinet enforcer". He has represented the constituency now known as Copeland since 1970. Mr Blair said he was a "huge figure" in Labour and a "valued, personal friend".

During Labour's long period in opposition, Mr Cunningham held a number of shadow roles including foreign affairs, the environment and as trade spokesman. As agriculture minister he caused controversy when he decided to ban beef on the bone in the wake of fears over BSE. He quit the government in 1999 and in recent years has served as the chairman of the all-party committee on Lords reform and has been a loyal supporter of the government from the backbenches.
Kilroy unveils immigration policy

Ex-chatshow host Robert Kilroy-Silk has attacked UK policy on immigration saying Britain's open door approach is hitting low wage "indigenous" workers.

The Veritas leader said the only people to benefit from immigrants from places like Poland were employers, landlords, members of the 'metropolitan elite'. The MEP said his party would only admit foreigners who were required because they had specific skills to offer. And he argued asylum cost £2bn a year for 14,000 successful applicants.

Mr Kilroy-Silk said that worked out at £143,000 per successful asylum seeker. He said Veritas wanted to grant an amnesty for all those in Britain claiming asylum and who have children and deport everyone else. Britain should take its fair share of asylum seekers under the United Nations Convention on Human Rights, he argued. And Mr Kilroy-Silk said he wanted to spend an extra £500m a year to help provide for refugees abroad.
MPs assess Scots fishing industry

A group of MPs are on a two-day fact-finding mission to Scotland to gather evidence for a report into the UK's fishing industry.

Members of Westminster's environment, food and rural affairs committee will be touring fish markets and talking to fish processors. They will also talk to Fisheries Minister Ross Finnie and scientists. MPs are deciding whether to recommend a new system of "community quotas" to conserve fish stocks. The aim is that fishing ports like Peterhead or Fraserburgh would be allocated a quota and local people would decide how to fish it. The scheme is a variation on the local management committees already being established by the European Union.

Details are contained in a Royal Commission report for the UK Government, along with the more controversial idea of closing some mixed fishing grounds completely. Six members of the committee will be in Scotland to seek views from fishermen and processors in Aberdeen and Peterhead. They will also speak to Mr Finnie, representatives of the Royal Society and the Sea Fish Industry Authority. Committee chairman Austin Mitchell said some way has to be found of harvesting mixed fisheries without wasting stocks.
Kennedy to make temple address

Charles Kennedy is set to address 2,000 people at a Hindu temple as part of an appeal to ethnic minority voters.

The Liberal Democrat leader will visit the Shri Swaminarayan Mandir Temple in Neasden, north west London. He will say Labour "can no longer lay exclusive claim to the votes of Britain's ethnic minorities". Mr Kennedy will also highlight the anger among people of "all races" over the Iraq war and call for a "balanced approach" to tackling terrorism. Saturday's speech comes days after the Lib Dems launched their ethnic minority mini-manifesto. Mr Kennedy is to tell the audience: "Many people in Britain, of all races, cultures and religions, were angry about the way we were taken to war in Iraq. "And they saw the principled stand the Liberal Democrats took at the time."

He will also say that the Lib Dems want to "restore Britain's reputation on the world stage" by fighting international poverty and climate change, and protecting human rights. Mr Kennedy will say that a "balanced approach" to tackling terrorism would mean "tough measures to make Britain safe - but not at the expense of people's fundamental legal rights like has happened at Belmarsh". He will say it also means acting through the United Nations on terrorism. Mr Kennedy held talks with Tony Blair on Friday over government plans to hold terror suspects under house arrest. He said afterwards that the Prime Minister had offered some "movement" to address his concerns. The plans face trouble in the Lords if Conservative and Lib Dem opposition continues.
David Blunkett in quotes

David Blunkett - who has resigned as home secretary - built his reputation as a plain-speaking Yorkshire man.

 

 I fell in love with someone and they wouldn't go public and things started to go very badly wrong in the summer, and then the News of the World picked up the story. "I tried for three years to make something work." 

 "Trust, plain-speaking and straight talking is something which matters so much to me as a politician and as a man that I have decided, of my own volition, to request an independent review of the allegations that I misused my position."

"I don't think anyone can say I have said one thing in public and done another in private." "It would be dangerous territory if I wasn't practising what I preach which is to always accept responsibility, always accept the consequences of your actions. 

 "None of us believe countering terrorism is about party politics."

"I accepted by necessity we have to have prevention under a new category which is to intervene before the act is committed, rather than do so by due process after the act is committed when it's too late," he said in reference to new anti-terrorism measures. 

 "Our work with the French government...has been hugely successful," said Mr Blunkett. "The number of illegal immigrants detected in Dover has dropped dramatically." 

 "Strengthening our identity is one way or reinforcing people's confidence and sense of citizenship and well-being." 

 "I foolishly thought as this was a celebrity edition it would be more relaxed than normal." 

 "You wake up and you receive a phone call - Shipman's topped himself. You have just got to think for a minute: is it too early to open a bottle?"
No election TV debate, says Blair

Tony Blair has said he will not take part in a TV debate with his political rivals ahead of the next election.

"We answer this every election campaign and, for the reasons I have given before, the answer is no," he said at his monthly news conference. In October Tory leader Michael Howard said Mr Blair would be running scared if he refused calls to go head-to-head. In recent years the leader of the opposition has always called for a debate, although it has never happened. Before the 2001 election, plans for a debate between Mr Blair, William Hague and Charles Kennedy collapsed. In 1997 a debate between Mr Blair and John Major was also cancelled when a format could not be agreed. Televised debates have become the high point of the US presidential election campaigns.
Peers debate Crown succession law

Peers are debating proposals to change the rules governing the succession to the throne.

Labour peer Lord Dubs' Succession to the Crown Bill aims to end the right of male heirs to succeed to the crown even if they have an older sister. The private member's bill would also abolish the ban on heirs to the throne marrying Roman Catholics. The Fabian Society's Sundar Katwala said the change was "long overdue" and that he expected a "warm response". The political reform group's general secretary told BBC Radio 4's Today Programme there were some "very out-dated features" at the heart of Britain's constitution.

"In 1998 the government said in principle it supported the idea of ending gender discrimination and that it would consult on how to come forward with its own measures. "We hope they are warm towards it and don't say this is the wrong time." He pointed out that it was 30 years since the sex discrimination act and urged politicians on all sides to back the bill. Mr Katwala added: "This is long overdue. Parliament will have to do it eventually, the government, and I hope all of the political parties, might think this is a very simple thing to have in their manifestos."

But he acknowledged that even if the bill did win support, it was unlikely to become law because the legislative programme is likely to be squeezed by the coming general election. He said he hoped the bill would be a "gentle nudge" to the government and suggested it would "demand a response". The bill, which is in the Lords for its second reading, has been adopted by former chief whip Ann Taylor in the Commons. The rule of succession is regulated not only through descent and tradition but also by the Act of Settlement which confirmed in 1701 that it was for Parliament to determine the title to the throne.
Teens 'know little' of politics

Teenagers questioned for a survey have shown little interest in politics - and have little knowledge.

Only a quarter of 14-16 year olds knew that Labour was the government, the Tories were the official Opposition and the Lib Dems were the third party. Almost all could identify Tony Blair, but only one in six knew who Michael Howard was, and just one in 10 recognised Charles Kennedy. The ICM survey interviewed 110 pupils for education watchdog Ofsted. Nearly half those pupils polled said it was not important for them to know more about what the political parties stand for. And 4% of those questioned thought the Conservatives were in power - while 2% of them believed the Lib Dems were. The survey also looked at issues of nationality. It found the Union flag and fish and chips topped the list of symbols and foods associated with being British. Many of the pupils also looked on themselves as English, Scottish or Welsh, rather than British; while the notion of being European hardly occurred to anyone.
Howard and Blair tax pledge clash

Tony Blair has said voters will have to wait for Labour's manifesto to see if the party has plans to increase tax.

The premier was responding to a challenge from Tory leader Michael Howard who said Labour would raise taxes in its post-election Budget. Mr Blair derided Tory claims they could cut £35bn in "wasteful spending" saying the party had got its sums wrong. The two political leaders clashed just days after the opening salvoes of the pre-election period. Mr Howard told MPs that "every independent expert" from the International Monetary Fund to the Institute of Fiscal Studies had suggested the "government was spending more than it is raising and a Labour chancellor would have to put up taxes". Mr Blair replied: "I think they are wrong for this very simple reason: that the Treasury forecasts on the economy have been proven right." The Tories on Monday highlighted their plans for tax cuts worth £4bn, although the specific taxes to be cut have not been announced.

They also spelled out their plans for reduced government borrowing and more spending on key services. Labour and the Liberal Democrats have said the party's sums do not add up and claim it would cut frontline services. But Mr Howard said voters faced a clear choice at the next election between more waste and more tax under Labour and Tory value for money and lower taxes. The Liberal Democrats have also launched their pre-election platform, with leader Charles Kennedy saying his party was the "authentic opposition", particularly on the Iraq war, council tax and university tuition fees. Labour hit back at the Tory proposals even before their publication with election coordinator Alan Milburn accusing Mr Howard of producing a "fraudulent prospectus".
What really divides the parties

So what is the gap between Labour and the Tories nowadays?

One Starbucks, one Rymans and one small Greek cafe as it happens. Both parties have now completed their moves to new headquarters, with Labour creating its election hub just three doors away from the Tories' new headquarters in Victoria Street, just down the road from the Commons. That should make things a little easier if and when the crack-of-dawn election press conferences kick off. Unlike 2001, there should be no need for colleagues to have taxis gunning their engines outside, or to buy scooters, to get themselves between the tightly-timetabled events.

And, to all intents and purposes, we already appear to be in that general election campaign. Certainly the press conference hosted by election co-ordinator Alan Milburn, in the rather compact new conference room - still smelling of new carpet and with the garish New Labour coffee mugs as yet unstained - had all the hallmarks of an election event.

"Welcome to the unremittingly New Labour media centre," he said. And I'll bet he hadn't checked that one with Gordon Brown. Along with Work and Pensions Secretary Alan Johnson and Minister for Work Jane Kennedy, he then went on to tear into the Tory plans to scrap the New Deal welfare-to-work scheme, which they claimed would lead to an increase of almost 300,000 in unemployment. And they ridiculed the claims made on Monday by Michael Howard that he could save £35 billion of Labour waste and inefficiency to spend on public services while also offering £4 billion of tax cuts. Labour has come up with a figure of £22 billions worth of efficiency savings so, understandably perhaps, believe Mr Howard must be planning cuts to squeeze the extra £13 billion. These figures, based on the two parties' own detailed studies, will be battered to within an inch of their lives during the campaign. Wednesday was just the start.
Blair sees greater Bush consensus

George W Bush will display a more consensual approach to world politics as he begins his second term as US President, Tony Blair has said.

The prime minister said Mr Bush had learned military force was not the only way to fight terrorism. He understood that "the best prospect of peaceful co-existence lies in the spread of democracy and human rights", Mr Blair told the Guardian newspaper. Mr Bush was sworn in at a ceremony in Washington DC on Thursday.

Echoing the new US Secretary of State Condoleezza Rice, the prime minister said there has been a clear evolution of US policy since the war in Afghanistan in 2001. Mr Blair had personally seen the change over time in conversations with Mr Bush. The president understood that while military and security measures were important, there also needed to be a multilateral approach to solving the world's problems.

Turning to critics' fears that the US was poised for further military action, Mr Blair refused to give succour to suggestions it was preparing for strikes against Iran. The prime minister conceded that the US had "what appears to be a harder position" towards the state than Europe. But the prime minister pointed out that until now the US had allowed Britain, France and Germany to take the lead in trying to halt the Iranian nuclear programme. Following claims that US forces had worked inside Iran to identify potential targets, Mr Blair was asked if the SAS had also been in the country. "We never answer questions about special forces, but do not take that as indicating an affirmative," said Mr Blair.

Mr Blair said he believed the president was keen to work with other countries while trying to spread democracy and human rights. "It is significant, in my view, that he is coming to Europe as his first foreign visit," said Mr Blair. Following his inauguration, Mr Bush is due in Europe at the end of January.
Hague 'given up' his PM ambition

Former Conservative leader William Hague says he will not stand for the leadership again, having given up his ambition to be prime minister.

Mr Hague, 43, told the Daily Telegraph he would now find a life dominated by politics too "boring" and unfulfilling. Mr Hague, who stepped down after his party's 2001 election defeat, does not rule out a return to the front bench. He also told the paper he hopes to remain MP for Richmond, North Yorks, and start a family with wife Ffion. Mr Hague, who recently had published the biography of William Pitt the Younger, also said he wanted to continue writing books and speech-writing.

He told the newspaper: "I don't know whether I will ever go back on to the front, but don't rush me." Asked if he would stand for the leadership again, Mr Hague replied: "No. Definitely not." His determination to stay away from a central role will disappoint some senior Conservative members, who say the party needs him. Tim Collins, the shadow education secretary, said last week it would be a "huge boost" to the party if Mr Hague returned to the front bench. Mr Hague became an MP at 27 and Leader of the Opposition at 36. He said: "I feel fortunate that, by the age of 40, I had crammed in an entire political career. "I had been in the Cabinet and been leader of the party, so now I can branch out into other things...it is a very liberating feeling." Mr Hague added that he may have misjudged his own ambition to be prime minister. "Maybe I wasn't as driven by politics as I thought I was," he said.
Boothroyd calls for Lords speaker

Betty Boothroyd has said the House of Lords needs its own Speaker and that peers should lead the way on reforming the upper chamber.

Baroness Boothroyd, who was the first woman to be Commons Speaker, said she believed Tony Blair initiated reforms without a clear outcome in mind. "Now we have to take care of it ourselves and make the best of it," she told the BBC's Breakfast with Frost. In 1999 Labour removed all but 92 of the Lords' 750 hereditary peers. That was billed as the first stage of reform of the institution. The lord chancellor hinted further reforms could be unveiled in the next Labour manifesto.

"I think we need to look very carefully at the relationship between the Lords and the Commons," Lord Falconer told BBC1's Breakfast With Frost. "How it interacts with the Commons is a very, very important issue. "We need to address the issue in the manifesto, but you will have to wait for when the manifesto comes." The lord chancellor currently has the role of House of Lords speaker. He is also head of the judiciary and a member of the Cabinet as constitutional affairs secretary.

Lady Boothroyd said she believed it was unacceptable for the lord chancellor to have the role of Speaker. "I would really like to see a Speaker of the House of Lords," she said. "I don't go for the idea of somebody - a lord chancellor - who is head of the judiciary, a senior Cabinet minister and Speaker of the Lords. "I want somebody there who is going to look after that House and do a job there.
New UKIP defection to 'Veritas'

The UK Independence Party has lost one of its two London Assembly members to Robert Kilroy-Silk's new political party, expected to launch on Wednesday.

Damian Hockney said ex-chatshow host Mr Kilroy-Silk would "deliver better" as the leader of a eurosceptic party. He said Mr Kilroy-Silk had made him deputy party leader of Veritas, Latin for truth. Sources close to Mr Hockney said around eight other members of London UKIP were also planning to jump ship.

Details of the coming week's events were hammered out at a meeting at Mr Kilroy-Silk's Buckinghamshire home on Sunday, the BBC News Website was told. The news came after UKIP suspended a candidate for allegedly suggesting the criminally insane should be killed. John Houston, 54, was due to stand in the East Kilbride seat in Lanarkshire at the next election. A spokesman for UKIP called on Mr Hockney to quit the London Assembly. UKIP asserts that Mr Hockney "has a moral obligation, if not a legal one" to stand down. Mr Hockney meanwhile told the BBC: "I believe that Robert Kilroy-Silk can deliver better as a leader of a eurosceptic party than the current leadership of the UK Independence Party."

On the suspension of Mr Houston, UKIP said those who selected him knew nothing of his views. Mr Houston is alleged to have said that the organs of the criminally insane should be "made available to law-abiding members of the community" and proposed the legalisation of drugs and the sex trade.

The document reportedly said: "We're looking for the resurrection of the British Empire. "The problems for the human race - environmental and others - can only be dealt with on a global scale, and that calls for a radical alliance of the English-speaking nations, which they are uniquely able to do." UKIP spokesman Mark Croucher said the main issue would be that Mr Houston's reported views had been presented as UKIP policy, which they were not.
'Super union' merger plan touted

Two of Britain's big trade unions could merge to form a "super union" of two million members.

The move by Amicus and the Transport and General Workers Union (TGWU) would be a seen as a bid to carry more weight with ministers and employers. Amicus has 1.2 million members and the TGWU has 800,000. Any merger would have to be approved by the unions' executives and their membership. It is understood meetings will be held on Wednesday about the proposal. Along with the GMB and Unison, the TGWU and Amicus worked closely together in the last year to hammer out a 56-point deal with Labour's leadership over equality at work, holidays and pensions - the Warwick Agreement. Both unions are remaining tight-lipped about the merger rumours, but one insider pointed out to the BBC News website that "nobody is denying suggestions a merger could be on the agenda" when the two unions' executives hold their meetings on Wednesday. Amicus's executive was due to meet in any case although the TGWU is holding specially scheduled talks.
Civil servants in strike ballot

The UK's biggest civil service union is to ballot its 290,000 members on strikes in protest at government plans to extend their pension age to 65.

The Public and Commercial Services Union will co-ordinate any action with up to six other public sector unions. Unions have already earmarked 23 March for a one-day strike which could involve up to 1.4 million UK workers. The government says unions will be consulted before any changes are made to the pension system.

PCS leader Mark Serwotka warned there could be further walkouts unless there was a government rethink.

"For a government that lectures everyone on choice - choice on public service, choice on this and choice on that - isn't it ironic that they're saying to public sector workers there is no choice," he said. "If you want the pension you were promised when you started you must work for an extra five years - that is working until people drop. "In the 20th century, it's completely unacceptable." BBC correspondent Stephen Cape said the combined unions represented "a formidable force" which could embarrass the government in the run-up to the General Election. A stoppage involving civil servants, in particular, could seriously disrupt or close government departments, agencies and museums, he said.

Opposition to raising the retirement age is "one thing all the unions are agreed on", our correspondent added. Unison's 800,000 workers, the Transport and General Workers' Union's 70,000 and Amicus' 20,000 are among those being balloted about a 23 March walkout. Deputy Prime Minister John Prescott held a private meeting with senior union figures on Thursday night. Our correspondent said that he understood no deal had been offered in that meeting but that there was room for further negotiations. There was "some possibility" of the strike action being avoided, he added.
Blair Labour's longest-serving PM

Tony Blair has become the Labour Party's longest-serving prime minister.

The 51-year-old premier has marked his 2,838th day in the post, overtaking the combined length of Harold Wilson's two terms during the 1960s and 1970s. If Mr Blair wins the next election and fulfils his promise to serve a full third term, he will surpass Margaret Thatcher's 11 years by the end of 2008. In 1997, Mr Blair became the youngest premier of the 20th century, when he came to power at the age of 43. The last prime minister to be installed at a younger age was Lord Liverpool, who was a year his junior in 1812.

Mr Blair's other political firsts include becoming the first Labour leader to win two successive full terms in power after the 2001 Labour landslide. And the birth of the Blairs' fourth child, Leo, on 20 May, 2000, was the first child born to a serving prime minister in more than 150 years. The last "Downing Street dad" was Lord John Russell in 1848. Labour won a huge majority of 167 over the Conservatives in 2001, but Mr Blair has since been criticised by many in his own party. The war in Iraq and reforms of the health service and education system have provoked dissent from backbenchers.

Gordon Brown, chancellor of the exchequer under Mr Blair, became Britain's longest-serving chancellor of modern times in 2004. Former Labour leader Lord Kinnock said the chancellor would be best placed to take over from Mr Blair. When asked about the future leadership of the party, he told ITV Wales' Waterfront programme: "That contest is a long way away and it will occur only when the Prime Minister, Tony Blair, decides he's subscribed all he can and then wants to go. "I think that the main contender will be Gordon Brown, who is a man of virtually unmatched capability and now great experience." Both Mr Brown and Mr Blair rose to prominence when Lord Kinnock led Labour between 1983 and 1992.
Tories leave door open for Archer

The Conservative Party would deal "sympathetically" with any application by disgraced peer Lord Archer to rejoin its ranks, its co-chairman has said.

Dr Liam Fox told BBC One's Breakfast with Frost programme there was no place for "vindictiveness" in politics. Lord Archer spent two years in prison after being convicted of perjury and perverting the course of justice. The former Tory deputy chairman's five-year suspension from the party has just elapsed.

A jury ruled that Lord Archer lied during a libel trial against the Daily Star at the High Court in London in 1987.

He won damages after the newspaper printed allegations about involvement with a prostitute. Dr Fox was asked if he would say yes or no if Lord Archer applied to rejoin. "I'm sure that in line with people having served their sentence and having done some reparations for what they did wrong, we would look at that sympathetically. "I don't believe in vindictiveness, I don't think that has any place in politics, unlike the prime minister and Alastair Campbell."

Tory peer Lord Tebbit said he agreed with Dr Fox's view, and said the case should be looked at on its merits. "After all, he is far from being the worst perjurer in the world," he added. Meanwhile, senior Conservative MP Sir Teddy Taylor warned that moves bring Lord Archer back into the fold could be controversial. He said: "I suppose, on a Sunday in particular, we should always make provision for forgiving sinners. But there is no doubt it would be controversial." Lord Archer, who was not available for comment, remains a popular figure among constituency Tory parties and is a successful fundraiser. He has not been seen in the House of Lords since his release from prison in July 2003, although there is nothing in the rules to prevent him from attending.
UKIP outspent Labour on EU poll

The UK Independence Party outspent both Labour and the Liberal Democrats in the European elections, new figures show.

UKIP, which campaigned on a slogan of "Say no to Europe", spent £2.36m on the campaign - second only to the Conservatives' £3.13m. The campaign took UKIP into third place with an extra 10 MEPs. Labour's campaign cost £1.7m, the Lib Dems' £1.19m and the Greens' £404,000, according to figures revealed by the Electoral Commission on Wednesday. Much of the UKIP funding came from Yorkshire millionaire Sir Paul Sykes, who helped bankroll the party's billboard campaign. Critics have accused the party of effectively buying votes. But a UKIP spokesman said Labour and the Conservatives had spent £10m between them on the last general election. "With the advantages of public money the others have, the only way the smaller parties can get their message across is by buying the advertising space," he added.
Conservative MP defects to Labour

A Conservative MP and former minister has defected to Labour.

Robert Jackson, 58, MP for Wantage in Oxfordshire, said he was disillusioned with the party's leadership and its "dangerous" views on Europe. Prime Minister Tony Blair declared himself "delighted", saying Mr Jackson would be warmly welcomed by Labour MPs. Mr Jackson, who has clashed with his leaders over tuition fees and Europe in the past, served as higher education minister between 1987 and 1990. In a letter to his constituency chairman he wrote: "It is in the country's best interest that Tony Blair rather than Michael Howard should form the next government." While saying he admired Mr Blair's "courageous" leadership of the country, he bitterly criticised the Conservatives stance on Europe. "The Conservative Party's hostility to Europe has now hardened to the point at which it advocates the unilateral denunciation of Britain's treaty obligations," he wrote.

Mr Blair said Mr Jackson was a "decent, fair-minded and dedicated public servant... who will be warmly welcome by Labour MPs and members". "As he rightly says, [the Conservatives] have learned nothing from their two election defeats and are, if anything, drifting further rightwards," he added. A spokesman for Michael Howard said Mr Jackson's views on policy issues were "very different" from those of the party leadership. "He believes students should pay tuition fees, that Tony Blair should not be criticised over his handling of the Iraq war and that more powers should be given to Europe," the spokesman said. He added that it was not surprising Mr Jackson had chosen to leave the Conservatives. Mr Jackson is due to stand down at the next election. He is the third Conservative MP to defect to Labour since 1997.
Tory 'stalking horse' Meyer dies

Sir Anthony Meyer, the Tory backbencher who challenged Margaret Thatcher for the party leadership in 1989, has died.

He was 84, had been suffering from cancer for many months, and died at his London home. That failed "stalking horse" leadership challenge made it easier for Michael Heseltine to mount his own bid. That in turn paved the way for John Major to move into 10 Downing Street, after the second ballot. Meyer's constituency party, Clwyd North West, which he had represented as an MP for more than 20 years, deselected him as a result of that challenge. Sir Anthony John Charles Meyer was born on 27 October, 1920. Educated at Eton, and at New College, Oxford, he served in the Scots Guards from 1941 to 1945 and was wounded in tanks in Normandy. He worked under Edward Heath on Europe at the Foreign Office and subsequently won the Eton and Slough seat for the Tories in 1964 - by 11 votes. Labour regained the seat two years later, and Meyer had to wait until 1970 before he could re-enter Parliament. His prospects of a front bench slot remained remote because he tended to defy the party line.
UK youth 'interested' in politics

The majority of young people are interested in politics, holding "strong opinions" on policies and have a "keen appetite" for direct action.

Research undertaken for voting watchdog the Electoral Commission suggests 81% of 16 to 20-year-olds feel strongly about issues like crime and education. The survey findings are being released to coincide with the launch of the Y Vote Mock Elections 2005 initiative. Mock elections are planned to take place in schools across the UK.

Electoral Commission boss Sam Younger said: "We know that young people often feel disengaged from democratic life and we believe in working creatively to encourage their interest and participation. "Mock elections can play an extremely valuable role in helping young people understand how the democratic process works and why it matters," he said. The survey of a sample of 500 British 16 to 20-year-olds and 500 21 to 25-year olds "showed Britain's young people are far from apathetic about issues that matter to most of their lives". The Y Vote initiative is being run jointly by the Electoral Commission, the Hansard Society and the Department for Education and Skills in the run-up to local elections and the general election, possibly on 5 May. Michael Rafferty, who is mock elections project manager at the Hansard Society, said he looked forward to seeing schools and colleges across the UK participating in the mock votes.
MPs issued with Blackberry threat

MPs will be thrown out of the Commons if they use Blackberries in the chamber Speaker Michael Martin has ruled.

The £200 handheld computers can be used as a phone, pager or to send e-mails. The devices gained new prominence this week after Alastair Campbell used his to accidentally send an expletive-laden message to a Newsnight journalist. Mr Martin revealed some MPs had been using their Blackberries during debates and he also cautioned members against using hidden earpieces.

The use of electronic devices in the Commons chamber has long been frowned on. The sound of a mobile phone or a pager can result in a strong rebuke from either the Speaker or his deputies. The Speaker chairs debates in the Commons and is charged with ensuring order in the chamber and enforcing rules and conventions of the House. He or she is always an MP chosen by colleagues who, once nominated, gives up all party political allegiances.
Blair to face trust issue head on

Tony Blair says he will be facing the issue of trust and his own integrity head on during the election campaign.

During a question and answer session with first-time voters on Five News, Mr Blair said he had no option but to "confront it" by talking to people. He also dismissed claims government plans to get 50% of young people into university would devalue degrees. He was not "forcing" anyone to go to university, but places should be there for those who wanted them, he said. In answer to a question from 22-year-old Liverpool student David Dunne about concerns over the prime minister's personal integrity, Mr Blair said talking was the only answer. "You've just got to confront it and say to people let's have a discussion on the things that worry you, the things that make you say 'I can't trust you' or 'I am against you on this.'" The "worst thing in politics" was that the electorate only got "little snatches of policy" from things like Prime Minister's Questions and the news headlines. This was why he wanted to "get out of the 30 seconds on the news," he added.

By talking through policies at least people understood the reason for them, even if they did not agree with them, he said. Mr Blair also faced questions about British policy on Iran and its alleged nuclear weapons programme. He insisted there was no plan for an invasion of the country saying: "Sometimes people say because of what has happened in Iraq this is the next place." Instead there was a real chance of a "peaceful resolution" to the problem, he said.
Labour in constituency race row

Labour's choice of a white candidate for one of the UK's most multi-racial seats proves the need for all-black short lists, says a race group.

Local councillor Lyn Brown was selected for West Ham, east London, in a contest between two white and five ethnic minority women. An Operation Black Vote spokesman said they now wanted to meet Labour party chairman Ian McCartney for discussions. Mr McCartney recently announced party consultation on all-black shortlists. However, Labour has so far unable been unable to comment on the implications of the West Ham result.

Ashok Vishwanathan of Operation Black Vote, which aims to increase ethnic minorities' participation in the political process and their representation, said the result again showed all-women shortlists were not effective in getting minority women selected. "I think all-black shortlists are the only way to cut to the chase and address the lack of minority candidates," Mr Vishwanathan said.

Last month the chairman of the Commission for Racial Equality (CRE) also called for ethnic minority shortlists in certain circumstances. A CRE spokesman said the organisation had nothing to add on the shortlist issue specifically but would be working with all the political parties to address the under-representation of ethnic minorities in Parliament. "We will be raising it with each of the party leaders on a formal basis and helping them find the most appropriate way forward," the spokesman said. Ethnic minorities make up 8% of the United Kingdom population but only 2% of MPs - 13 out of 659 - are from a visible minority group. Twelve of them represent Labour, and one is a Liberal Democrat. If ethnic minorities were represented in the House of Commons in proportion to their numbers in the population, there would be 42 ethnic minority MPs.
Schools to take part in mock poll

Record numbers of schools across the UK are to take part in a mock general election backed by the government.

Some 600 schools have already signed up for the Y Vote Mock Elections 2005 run by the Hansard Society and aimed at boosting interest in politics. Pupils in the schools taking part will learn the skills of speech writers, canvassers and political candidates. Schools Minister Stephen Twigg said engaging young people's interest was "essential" to the future of democracy.

He added: said "Young people who are engaged and motivated by the political process are essential to the future health of our democracy. "The mock elections initiative provides an opportunity for pupils to develop their own understanding of how the democratic process works and why it matters. "By experiencing the election process first hand - from running a campaign to the declaration of the final result - we hope that young people will develop the enthusiasm to take part in the future." The Hansard Society, the Electoral Commission and the Department for Education and Skills are running the programme. Pupils will stand as party candidates, speech writers and canvassers. Michael Raftery, project manager at the Hansard Society, said: "The Y Vote Mock Elections for schools mirror the excitement and buzz of a real election, raising awareness of citizenship, and the benefits of active democracy." The mock votes will take place around 5 May, widely expected to be the date of the general election. Information packs, including ballot papers and manifesto guides, with elections happening in early May were sent out to the 3,000 schools invited to take part.
Kennedy predicts bigger turnout

Voters' "pent up passion" could confound predictions of a low turnout in the coming general election, Charles Kennedy has said.

The Liberal Democrat leader predicted concerns over Iraq and other international and domestic issue would express themselves during the campaign. His comments come as an inquiry looks at how best to boost voter turnouts. Ex-foreign secretary Robin Cook said people were not apathetic but fed up of "pager politics" and not being heard. He, like Mr Kennedy, pointed to the hundreds of thousands of people who demonstrated against plans for the Iraq war.

Mr Cook, who is giving evidence to the Power inquiry into voter turnout rates, told BBC Radio 4's Today Programme it was not fair to blame the public who were "more interested in politics than ever before". "They are turned off by the way we do politics in Britain. There's a message there for politicians." He urged politicians to avoid negative campaigning and to "speak more from the heart". "We should be not so afraid to say what we stand for." He also criticised the cult of personality politics: "There's far too much interest in celebrities. "Politics are in danger of becoming another branch of the celebrity industry." The government has tried a number of things in an attempt to boost voter turnout, which fell to 59% in the last general election in 2001. This has included bringing in directly elected mayors to head local authorities and trialling postal voting.
UKIP could sue Veritas defectors

The UK Independence Party could take legal action to unseat two London Assembly members who defected to Robert Kilroy Silk's Veritas Party.

Damian Hockney, now Veritas deputy leader, and Peter Hulme-Cross were elected in 2004 on the list system. The party argues the pair should give up their seats as they won them as UKIP representatives, not as individuals. Mr Hockney said the law was clear that those elected on a list who quit their party should keep their seats. UKIP chairman Petrina Holdsworth urged the men to step down from the GLA in a letter.

She said: "The party has taken legal advice and it is clear that we could take legal proceedings against you which could result in the return of our seats and/or damages against you. "We would however like you to be given an opportunity to reflect on what you have done, to restore your own credibility with the electorate and return the seats to the party which won them fair and square at the last election." Mr Hockney said the law worked in exactly the same way for the GLA as it did for other electoral list systems. "The Greater London Act is clear that if someone resigns who was elected on a list, their party whip the seat belongs to them and not the party." He said Mr Hulme-Cross and himself had no intention of resigning and added that they felt that it was UKIP who were not being true to the electorate. He accused the party of signing up to a deal with the Tories in Europe, rather than sticking to an independent stance. But the claim was denied by UKIP spokesman, who said: "Mr Hockney's accusations are like his sense of political morals - empty." Veritas was formed by Mr Kilroy-Silk earlier this month after he quit UKIP following an unsuccessful bid to take over as leader.
Tory expert denies defeat warning

The Conservatives' campaign director has denied a report claiming he warned Michael Howard the party could not win the next general election.

The Times on Monday said Australian Lynton Crosby told the party leader to focus on trying to increase the Tories' Commons presence by 25 to 30 seats. But Mr Crosby said in a statement: "I have never had any such conversation... and I do not hold that view." Mr Howard later added there was not "one iota" of truth in the report. The strategist helped Australia's PM, John Howard, win four elections. Mr Howard appointed Mr Crosby as his elections chief last October. Mr Crosby's statement said: "The Conservative Party has been making an impact on the issues of lower tax and controlled immigration over the past week." It added: "The Labour Party will be wanting to do all they can to distract attention away from the issues that really matter to people."
Manchester wins Labour conference

The Labour Party will hold its 2006 autumn conference in Manchester and not Blackpool, it has been confirmed.

The much trailed decision was ratified by Labour's ruling National Executive Committee in a break with the traditional choice of a seaside venue. It will be the first time since 1917 that the party has chosen Manchester to host the annual event. Blackpool will get the much smaller February spring conference instead in what will be seen as a placatory move.

For years the main political parties have rotated between Blackpool, Bournemouth and Brighton. And the news the much larger annual conference is not to gather in Blackpool will be seen as a blow in the coastal resort. In 1998 the party said it would not return to Blackpool but did so in 2002. The following year Bournemouth hosted the event before the party signed a two year deal for Brighton to host the autumn conference.

Colin Asplin, Blackpool Hotel Association said: "We have tried very hard to make sure they come back to Blackpool. "Obviously we have failed in that. I just hope Manchester can handle the crowds. "It amazes me that the Labour Party, which is a working class party, doesn't want to come to the main working class resort in the country." The exact cost to Blackpool in terms of lost revenue for hotel accommodation is not yet known but it is thought that block bookings will be taken at the major Manchester hotels after the official announcement.
Kennedy questions trust of Blair

Lib Dem leader Charles Kennedy has said voters now have a "fundamental lack of trust" of Tony Blair as prime minister.

He said backing his party was not a wasted vote, adding that with the Lib Dems "what you see is what you get". He made his comments at the start of a day of appearances on Channel Five in a session on The Wright Stuff programme. Questions from callers, a studio audience and the show's presenter covered Lib Dem tax plans, anti-terror laws and immigration.

Mr Kennedy said during his nearly 22 years in Parliament he had seen prime ministers and party leaders come and go and knew the pitfalls of British politics. "1983 was when I was first elected as an MP - so Tony Blair, Michael Howard and myself were all class of '83 - and over that nearly quarter of a century the world has changed out of recognition," he said. "We don't actually hear the argument any longer: 'Lib Dems, good people, reasonable ideas but only if we thought they could win around here - it's a wasted vote'. "You don't hear that because the evidence of people's senses demonstrates that it isn't a wasted vote." But he said Mr Blair had lost the trust of the British people. "There is a fundamental lack of trust in Tony Blair as prime minister and in his government," he said.

"What we've got to do as a party - what I've got to do as a leader of this party - is to convey to people that what you see is what you get." Mr Kennedy also used his TV appearance to defend his party's plans to increase income tax to 50% for those earning more than £100,000, saying it would apply to just 1% of the population. He said the extra revenue would allow his party to get rid of tuition and top-up fees, introduce free personal care for the elderly and replace the council tax with a local income tax. Mr Blair has already spent a day with Five and Michael Howard is booked for a similar session.
Labour's Cunningham to stand down

Veteran Labour MP and former Cabinet minister Jack Cunningham has said he will stand down at the next election.

One of the few Blair-era ministers to serve under Jim Callaghan, he was given the agriculture portfolio when Labour regained power in 1997. Mr Cunningham went on to become Tony Blair's "cabinet enforcer". He has represented the constituency now known as Copeland since 1970. Mr Blair said he was a "huge figure" in Labour and a "valued, personal friend".

During Labour's long period in opposition, Mr Cunningham held a number of shadow roles including foreign affairs, the environment and as trade spokesman. As agriculture minister he caused controversy when he decided to ban beef on the bone in the wake of fears over BSE. He quit the government in 1999 and in recent years has served as the chairman of the all-party committee on Lords reform and has been a loyal supporter of the government from the backbenches.
Brown names 16 March for Budget

Chancellor Gordon Brown will deliver his Budget to the House of Commons on 16 March, the Treasury has announced.

The Budget, likely to be the last before the General Election, will be at about 1230 GMT on that Wednesday, just after Prime Minister's question time. The annual event is when the chancellor outlines the government's taxation and broader economic predictions. The Tories say it is likely the Budget will contain measures to attract votes. The election is expected on 5 May.

Next month's Budget will be Mr Brown's ninth since Labour came to power in 1997. If a May election is called, there could be as little as 18 days between the Budget and the announcement of a date for the election. A shortened Finance Bill would have to be rushed through Parliament with all-party support to allow the Government to continue collecting revenue.

The full Finance Bill, with the Budget measures in it, would then be returned to the Commons after the election, if Labour secures another term in office. Tory shadow chancellor Oliver Letwin said: "We can be sure of two things: the Budget will contain measures to attract votes, and it will not contain the £8 billion of tax rises which independent experts say are inevitable if Labour wins the election." As Mr Brown announced the Budget date in a short ministerial statement, accountancy firm Ernst & Young urged him to put politics aside and focus on the long-term requirements of the economy. "In the Budgets that were given immediately before the last six elections, taxes were cut by the incumbent chancellor and, in many cases, taxes were increased soon after the election result," said Aidan O'Carroll, E&Y's UK head of tax.
Cabinet anger at Brown cash raid

Ministers are unhappy about plans to use Whitehall cash to keep council tax bills down, local government minister Nick Raynsford has acknowledged.

Gordon Brown reallocated £512m from central to local government budgets in his pre-Budget report on Thursday. Mr Raynsford said he had held some "pretty frank discussions" with fellow ministers over the plans. But he said local governments had to deliver good services without big council tax rises.

The central government cash is part of a £1bn package to help local authorities in England keep next year's council tax rises below 5%, in what is likely to be a general election year.

Mr Raynsford said nearly all central government departments had an interest in well run local authorities. And he confirmed rows over the issue with ministerial colleagues. "Obviously we had some pretty frank discussions about this," he told BBC Radio 4's The World at One. But he said there was a recognition that "a good settlement for local government" was important to health, education and "other government departments". Ministers had to be sure local government could deliver without "unreasonable council tax increases", he added. Mr Raynsford dismissed a suggestion the move was designed to keep council taxes down ahead of an expected general election.

"This is a response to the concerns that have been voiced by local government about the pressures they face." Mr Raynsford also plans to make savings of £100m by making changes to local government pensions schemes. These would raise the age from which retiring workers could claim their pensions and limit how much they received if they retired early. He insisted the changes were "very modest" and designed to tackle the problem of workers retiring "very early". But general secretary of the public services union Unison Dave Prentis criticised the plans. "If you want world class public services you don't get that by hitting people as they approach retirement."
'UK will stand firm on EU rebate'

Britain's £3bn EU rebate is not up for renegotiation at next week's European Council summit, Jack Straw said.

The foreign secretary told MPs the rebate, secured by Margaret Thatcher in 1984, was "entirely justified". New European commission president Jose Manuel Barroso has suggested the cash could be shared out among net contributors to the EU budget. Mr Straw acknowledged some countries in the newly enlarged 25 nation EU still had to "see the light" on the rebate.

But the foreign secretary told the Commons foreign affairs committee: "Our position is very clear: it is entirely justified and it is not for negotiation." He added that he did not think there would be a political price to pay for the UK's stance - Britain contributed more and received less than other EU states. The two-day European Council summit in Brussels begins on 16 December and is widely expected to mark the beginning of a lengthy negotiating period over the EU's budget for 2007-13. The wrangling could stretch into 2005, even 2006.

The UK, France, Germany, Austria, the Netherlands and Sweden want the EU budget to be capped at 1% of member states' combined national incomes - the Commission wants it to be 1.26%. Mr Straw said the EU commission's proposal would mean a 35% hike in the budget. "I don't know of any national government thinking of increasing its budget by that amount," he added. The foreign secretary said he hoped the talks next week could produce a date in 2005 for the beginning of negotiations with Turkey about possible EU membership although that there would be no prospect of a date for joining for some time.
MPs demand 'Budget leak' answers

Ministers have been asked to explain how Budget details were printed in a London newspaper half an hour before Gordon Brown made his speech.

The Tories said a large chunk of the Budget appeared to have been leaked in what they describe as a "serious breach of Treasury confidentiality". The Lib Dems called for Commons leader Peter Hain to make a statement and said chancellors had resigned over leaks. They were told it would be brought to Speaker Michael Martin's attention. In the Commons, Tory frontbencher Andrew Tyrie MP demanded an immediate ministerial statement about how measures had been "clearly, or at least apparently, leaked to the Evening Standard".

Raising a point of order, he said it was "the latest in a long line of discourtesies to this House", as well as a breach of confidentiality. He said: "I can only hope it is unintentional. If it were planned it would be a very grave matter indeed. A previous Labour chancellor resigned after he leaked the Budget." Hugh Dalton resigned after leaking details of his 1947 budget to journalist John Carvel, who published them in a London newspaper, just minutes before they were announced to the House of Commons. Liberal Democrat David Laws said it was a "very serious matter" and said Mr Hain should make a statement on Thursday. Deputy Speaker Sylvia Heal agreed it was "of concern" but said nothing could be done immediately but the issue would be brought to Mr Martin's attention.
US casino 'tricks' face ban in UK

Controversial new UK casinos will be banned from using American tricks of the trade to ensure they are "socially responsible", it has been suggested.

Culture Secretary Tessa Jowell said proposed super-casinos will be different from their US counterparts. In America, pheromones have reportedly been released from machines to encourage aggressive gambling and clocks are often removed from walls. Eight super-casinos are proposed from 2010 if the Gambling Bill becomes law. Ms Jowell said the legislation would ban psychological trickery.

She told The Times: "British casinos will be quite different to those overseas.

"They will have to act in a socially responsible way and will be tightly regulated. "They will be run according to British rules and we'll simply not allow any tricks which people are subjected to unawares and which increase the risk of problem gambling." One tactic used in the US is simulating daylight during night-time to lull players into remaining at the tables and slot machines. Casinos also frequently offer free food, drink and hotel accommodation to keep punters betting. A spokesman for the British Casino Association, which represents the UK industry, said the government was trying to allay fears over a "UK Las Vegas". He said the way the licences were being awarded meant UK firms were at a massive disadvantage and foreign companies would be certain to win the contracts. "The UK industry is one of the world's most respected," he said. "We have the lowest level of problem gambling in the world. "We certainly don't use pheremones. "The UK gambling industry is being totally frozen in time, and the foreign companies will take over."
Hunt ban support is 'in decline'

Support for a ban on hunting has fallen in the past six years, a poll suggests.

Less than half the UK wants a ban compared to almost two-thirds in 1999, the Mori survey of 2,000 adults for BBC One's Countryfile programme suggests. The number opposed to a ban remains constant, but those "neither supporting nor opposing" has increased by 11%. Most city-dwellers support the ban but rural people were evenly split between supporters, opponents and undecided.

Polling company Mori carried out both surveys. In July 1999 they asked 801 adults if they supported the ban for the Mail on Sunday. For Countryfile they asked 2,234 adults across the country the same question. The Mail on Sunday survey found that 63% supported a hunting ban compared with 24% against. In the Countryfile survey, 47% said they supported the legislation, with 26% against. But the programme makers suggest the British public are becoming "increasingly neutral" to the issue because around one quarter said they "neither support nor oppose" a ban.
UK pledges £1bn to vaccine effort

UK Chancellor Gordon Brown has offered £960m ($1.8bn) over 15 years to an international scheme aiming to boost vaccination and immunisation schemes.

In a speech, he called for action to reach the 2000 Millennium Declaration goals of halving global poverty and tackling child mortality rates. Mr Brown has just returned from a tour of African nations. The £1bn commitment is part of a five-point plan on debt relief, trade, aid, education and health.

The chancellor was speaking at an event jointly organised by the UK's Department for International Development and the UN Development Programme on Wednesday. Mr Brown welcomed news that the Bill Gates Foundation and Norway are joining up to put an extra £0.53bn ($1bn ) into the Global Alliance for Vaccines and Immunisation (Gavi). Britain, France, Gavi and the Gates Foundation have drawn up proposals to apply the principles of the International Finance Facility (IFF) to the area of immunisation. That could see donors making long-term, legally binding financial commitments which can then be used as collateral for raising extra funds from international capital markets. As well as pledging £960m over 15 years to the immunisation IFF, Britain urged other donors to contribute.

If Gavi could increase its funding for immunisation by an extra £4bn ($7.4bn) over 10 years, then an extra five million lives could have been saved by 2015 and five million thereafter, Mr Brown argued. Campaign groups including Friends of the Earth, the World Development Movement, and War on Want said UK government policy on free trade was a major barrier to fighting poverty. War on Want's John Hilary said: "Compassionate rhetoric cannot disguise the reality of the government's neo-liberal policies. "As long as Mr Blair and Mr Brown continue to push free trade and privatisation on developing countries, more and more people will be pushed deeper into poverty, not lifted out of it."
'EU referendum could cost £80m'

It could cost £80m to run a UK referendum on the European constitution, ministers have revealed.

In a written parliamentary answer, Constitutional Affairs Minister Chris Leslie said the poll was likely to cost the same as a general election. Mr Leslie said the cost could not be compared with the only previous British referendum, held 30 years ago. Ministers say the constitution would make the European Union work better but critics fear creating a "super state". Labour MP John Cryer, whose question revealed the price estimate, said the cost surprised him but was not a central factor as it was important people had their say. But he said it would have been better to have rejected the constitution so avoiding the need for a referendum. The 2001 election cost £80m. No date for the vote has been set but Foreign Secretary Jack Straw has suggested it is unlikely to be held until early 2006 - after the predicted date for the next election. Most voters said the UK should stay in the Common Market in the 1975 referendum.
'No UK apology' for colonial past

The days of Britain having to apologise for its colonial past are over, Gordon Brown has said.

The chancellor, speaking during a week-long tour of Africa, said it was time to talk about enduring British values of liberty and tolerance. Mr Brown has signed a debt relief deal with Tanzania which could cost the UK £1 billion. South African president Thabo Mbeki has attacked British imperialists, saying they treated Africans like savages. Mr Brown said that missionairies had come to Africa because of their sense of duty. He added that the history of internationalism and enterprise had given Britain a greater global reach than any other country. BBC political correspondent Mark Mardell said Britishness had long been a theme of the chancellor's but "never before has he been so outspoken in defending Britain's past history".

The UK has pledged to pay 10% of the developing world's foreign debt bill in an attempt to fight poverty. On top of the relief deal with Tanzania Mr Brown said the UK would make similar offers to 70 poorer nations around the world. Under the plan - which could cost the UK £1bn - countries must spend the cash saved on health, education and welfare. "We make this offer unilaterally but we are now asking other countries to join us," the chancellor said. Mr Brown, on a week-long tour of Africa, spent two days in Tanzania before heading on Friday evening to Mozambique, a country where more than half of the 17-million population lives below the poverty line.

There he is expected to strike a similar debt relief pact. The chancellor said he hoped other G8 and European countries would follow suit. The UK has already cancelled its bilateral debts - money the UK alone is owed - with the world's poorest nations including Tanzania. Former international development secretary Clare Short questioned the effectiveness of debt relief as a means of tackling poverty.
Blunkett hints at election call

Ex-Home Secretary David Blunkett has given fresh clues that the general election will be announced on Monday.

He told BBC Radio Five Live: "I'm out in my constituency getting ready for what we presume will be an announcement very shortly at the weekend." He clarified that he meant he would be in his Sheffield seat this weekend, not that he expected an election call then. Tony Blair is tipped to ask the Queen on Monday to dissolve Parliament ready for a 5 May poll.
Lib Dems predict 'best ever poll'

The Lib Dems are set for their best results in both the general election and the local council polls, one of their frontbenchers has predicted.

Local government spokesman Ed Davey was speaking as the party launched its campaign for the local elections being held in 37 English council areas. The flagship pledge is to replace council tax with a local income tax. The Tories say the Lib Dems would make people pay more tax and Labour says the party's sums do not add up. Looking to the coming elections, which are all expected to be held on 5 May, Mr Davey said: "We are going to be winning more votes and winning more seats. "I think we are going to have the best general election results and local election results we have ever had under [party leader] Charles Kennedy. "I couldn't think of a stronger endorsement of a leader."
Blair prepares to name poll date

Tony Blair is likely to name 5 May as election day when Parliament returns from its Easter break, the BBC's political editor has learned.

Andrew Marr says Mr Blair will ask the Queen on 4 or 5 April to dissolve Parliament at the end of that week. Mr Blair has so far resisted calls for him to name the day but all parties have stepped up campaigning recently. Downing Street would not be drawn on the claim, saying election timing was a matter for the prime minister.

A Number 10 spokeswoman would only say: "He will announce an election when he wants to announce an election." The move will signal a frantic week at Westminster as the government is likely to try to get key legislation through Parliament. The government needs its finance bill, covering the Budget plans, to be passed before the Commons closes for business at the end of the session on 7 April.

But it will also seek to push through its Serious and Organised Crime Bill and ID cards Bill. Mr Marr said on Wednesday's Today programme: "There's almost nobody at a senior level inside the government or in Parliament itself who doesn't expect the election to be called on 4 or 5 April. "As soon as the Commons is back after the short Easter recess, Tony Blair whips up to the Palace, asks the Queen to dissolve Parliament ... and we're going." The Labour government officially has until June 2006 to hold general election, but in recent years governments have favoured four-year terms.
Brown's poll campaign move denied

The government has denied reports that Gordon Brown is preparing to oust Alan Milburn as Labour's election supremo.

Work and pensions minister Alan Johnson said it was wrong to suggest the chancellor would usurp Mr Milburn, adding they would "work as a team". A report in the Sunday Business claimed Mr Brown has been asked to take charge of media strategy, while Mr Milburn would move to a behind-the-scenes role. Labour has always maintained Mr Brown would have a central campaign role.

But many Labour backbenchers are said to be dissatisfied with the way election campaigning has gone and have said they wanted to see the chancellor take a bigger role. Some commentators say the Tories have grasped the initiative, putting Labour on the back foot, having to respond to Conservative policy announcements. These claims follow various opinion polls which suggest the Tories have been gaining on Labour. Party strategists are believed to want to bring Mr Brown to centre-stage having seen support rise, in private polling, after his Budget last week. But another report in the Sunday Telegraph claims Mr Milburn is unwilling to allow any new role for the chancellor to come at his expense. Mr Johnson told BBC News: "Gordon Brown will play a central role in any election campaign. "They were wrong when they said Milburn was ousting Brown and they're wrong now if they are saying Brown is ousting Milburn. We work as a team." Mr Milburn has repeatedly said the chancellor was key to the campaign and dismissed claims of a rift. Neither Downing Street nor the Labour Party would comment directly on the reports.
Tory candidate quits over remark

A Conservative election challenger is quitting after being quoted as wanting a "period of creative destruction in the public services".

Danny Kruger, who also works in the Tory research unit, had been due to take on Tony Blair in Sedgefield. He says his remark last week was misrepresented but he will not contest the election for fear of damaging the Conservative cause. Tory leader Michael Howard accepted his decision "with regret". Mr Kruger was quoted in the Guardian newspaper saying: "We plan to introduce a period of creative destruction in the public services."

In a statement, the party said the comment had been taken out of context. "He fully supports the party's policies on, and approach to, the public services," said the statement. "However, in order to avoid any further misrepresentation of his views and any damage to the Party, he has decided not to stand in the Sedgefield constituency at the next election." Mr Kruger is continuing in his job at the Tory campaign headquarters. Labour election coordinator Alan Milburn claimed Mr Kruger had exposed the Tory agenda for £35bn of cuts to public services. Mr Milburn said: "He is not some unknown hopeful fighting an unwinnable seat. He is a man who has worked at the heart of Conservative policy development... "His claim that the Tories were planning 'a period of creative destruction in the public services' is not a rogue claim. "It is the authentic and shocking voice of the Conservative Party. It reveals the true picture of what they would do."
Tories urge 'change at the top'

Tory delegates are gathering for what is expected to be their last conference before the general election, declaring Britain needs "a change at the top".

The party goes into its spring forum trying to highlight what it sees as a clear choice between it and Labour. Tory co-chairman Liam Fox has opened proceedings with a speech criticising Tony Blair's record in government. Labour's rule has been characterised by "lost trust and failure to deliver", he told the Brighton conference. He also attacked the government's "failure" to control immigration and asylum and criticised its record on the NHS, telling delegates Labour cannot be trusted on education or crime. A Tory government would sort out the "shambles" of immigration, put patients before statistics and bring discipline to schools, he said. Dr Fox also underlined Tory promises to cut tax by £4bn.

BBC political correspondent Shaun Ley says opinion polls suggest the Tories still lag some way behind Labour on the issues of health, education and the economy. Conservative leader Michael Howard, who had been due to welcome delegates to the conference on Friday, will address them in a lunchtime speech. His welcome address had to be postponed after he stayed in London to lead the party's opposition to the Prevention of Terrorism Bill in its lengthy progress through Parliament. The bill was finally passed on Friday evening, after more than 30 hours of debate. Mr Howard is likely to defend his party's handling of the bill, which was only passed after the Conservatives accepted Prime Minister Tony Blair's promise that MPs would be able to review it within a year.
Sayeed to stand down as Tory MP

Tory MP Jonathan Sayeed is to stand down on the grounds of ill health.

The decision comes after Mr Sayeed survived an attempt to de-select him in a row over allegations he had profited from private tours of Parliament. The Mid-Bedfordshire MP had denied a claim that he was paid for guiding visitors around the Palace of Westminster. Conservative leader Michael Howard has now accepted the MP's resignation, it has been announced.

Mr Sayeed was suspended from Parliament for two weeks last month after the Commons standards and privileges committee said his conduct had fallen "well below the standards expected". The Conservative Party had already been withdrawn the whip for a month. But his constituency association voted against a move to deselect him, with Mr Sayeed winning 173 of the 299 votes. After the vote, Mr Sayeed said only a fifth of association members had voted against him and he intended to get on with winning the election. But the vote prompted constituency association president Sir Stanley Odell to resign in protest. The Standards and Privileges Committee inquiry was launched after the Sunday Times alleged English Manner Limited charged clients for access to Westminster through Mr Sayeed. Mr Sayeed had denied the claims, saying the suspension was "unjust and wrong" but he made an "unreserved" apology to MPs in the Commons chamber. He insisted that the committee's report had contained a "few errors of fact". Mr Sayeed has been MP for Mid-Bedfordshire since 1997. He represented Bristol East from 1983 to 1992.
'Last chance' warning for voters

People in England, Scotland and Wales must have registered by 1700 GMT to be able to vote in the general election if it is held, as expected, on 5 May.

Those who filled in forms last autumn should already be on the register - but those who have moved house or were on holiday may have been left off. There will also be elections for local councils and mayors in parts of England on 5 May. The deadline for voters to register in Northern Ireland expired on Thursday.

Completed registration forms can be handed into local authorities throughout the day on Friday, and some will accept them by fax. As well as for English county councils, polls for unitary authorities at Bristol, Isle of Wight and Stockton-on-Tees and mayors at Doncaster, Hartlepool, North Tyneside and Stoke-on-Trent are also scheduled for 5 May. Last week Preston City Council reported that more than 14,000 of its voters were not registered. Its electoral roll fell by 17.5% in a year - the biggest dip in the UK. An Electoral Commission spokeswoman said: "Political decisions are made on your behalf every day but only by using your right to vote at an election can you really have a say on the issues you care about. "If you want your voice to be heard on 5 May you will need to have registered by Friday 11 March." Council tax payers are not eligible to vote without registration, officials have stressed.
Sainsbury's Labour election gift

Science Minister Lord Sainsbury has made a £2m donation to the Labour Party for its General Election fund.

It is the latest hefty donation to the party by the billionaire - he has contributed more than £10m since 1999. David Sainsbury said he was pleased to give cash to a party that had the "vision" to deliver economic prosperity and better public services for Britain. General Secretary Matt Carter said it was "a fantastic gift" that would help Labour "fight and win the election".

"Through the generosity of David Sainsbury and other Labour supporters, Labour will be campaigning hard to take Britain forward and to stop the Tories taking us back," Mr Carter said. Lord Sainsbury added: "I am pleased to be able to make this contribution to the general election funds of the Labour Party because I believe that they are the only party that has the vision to deliver both economic prosperity and better public services for Britain." The 64-year-old latest donation follows a £2.5m gift to the party in 2003. Lord Sainsbury was created a life peer in 1997, a year before he was appointed as minister for science.
Labour MP praises Tory campaign

The Conservatives have been "a lot smarter" in the way they have conducted the general election campaign, a Labour backbencher has said.

Derek Wyatt said having a five month campaign "turned off voters" and suggested people were already "rather bored of the thing". He wants a greater campaigning role for Chancellor Gordon Brown. Labour said the economy was at the heart of the campaign and Mr Brown therefore had a prominent role. But Mr Wyatt argued: "By some way, he is currently the figure in all of the polls that people trust and see that has delivered over eight years an economy unmatched anywhere in the world. "So, it would be a tad foolish of the Labour Party if we did not use him as we have done over the past three elections."

Labour's election chief Alan Milburn denied there was an attempt to sideline Mr Brown after facing criticism for letting the Tories set the agenda. However, Mr Wyatt predicted the campaign would get under way properly once the chancellor delivered his budget. The MP for Sittingbourne and Sheppey said Prime Minister Tony Blair had been "trying very hard" to improve his own standing with the electorate through a "sort of campaign of trust". But Mr Blair had been "hurt" by the Iraq controversy, he added. A Labour party spokesman played down differences with Mr Wyatt and said Mr Brown already had a prominent campaign role. "This election is a choice between Labour taking Britain forward and the Conservatives taking us back."
Top Tories on Lib Dem 'hit list'

The Liberal Democrats are aiming to unseat a string of top Tories - including leader Michael Howard - at the next general election.

Mr Howard's seat is at the top of the Liberal Democrats' list. Others targeted include Oliver Letwin, David Davis and Theresa May, Lib Dem's elections chief Lord Rennard said. He said it was "nothing personal" but that "very many of the prominent Conservatives" had slender leads in seats where the Lib Dems were second.

In 2001, Michael Howard won the Folkestone & Hythe seat with 20,645 votes, compared to 14,738 for the Liberal Democrat candidate Peter Carroll, giving the Tory leader a majority of 5,907. Asked if this amounted to the party's much vaunted "decapitation strategy" Lord Rennard said it was not a term he had ever used. But he urged Labour supporters to vote tactically to remove prominent Conservatives. "I just don't think Labour voters in these sort of seats could resist the temptation to use their votes effectively to remove a Conservative." He denied this strategy was opportunism, insisting the Lib Dem's policies on issues such as tuition fees, the council tax and free care for the elderly appealed "to all sides of the political spectrum". "We are in favour of tactical voting as long as the tactic is to vote Liberal Democrat," he added. A Conservative spokesperson said: "The Liberal Democrats can talk all they like about strategy. The problem the Liberal Democrats face is that a large number of Lib Dem voters do not agree with their policies. "We will be pointing out how they are soft on crime, how they support higher taxes, their opposition to controlled immigration and support for giving Europe more control over our lives".