Finance chiefs from the Group of Seven industrialised nations said at the end of their two-day meeting in London yesterday that the International Monetary Fund (IMF) will look at proposals to revalue or sell gold reserves to offer debt relief to alleviate global poverty.

"I believe this is the first time there has been a mention of the use of gold in a G7 communique for achieving debt relief," said the British Chancellor of the Exchequer, Mr Gordon Brown, who hosted the two-day meeting.

He said gold sales as well as revaluations would be investigated and IMF managing director Mr Rodrigo Rato would report back in April, when the IMF meets in Washington.

In spite of agreeing to consider gold sales, the G7 will have to shift their positions much further to agree a package on African aid debt relief in time for their summit this summer.

Finance ministers from the world's seven richest nations devoted most of their weekend meeting to Africa's grinding poverty. But their closing statement revealed just how far they have to go to reconcile old differences on how best to help Africa if they are to agree concrete assistance at their leaders' summit in Gleneagles, Scotland.

"We are agreed on a case-by-case analysis of HIPC [highly indebted poor] countries, based on our willingness to provide as much as 100 per cent multilateral debt relief," the ministers said. But the reference to the HIPC, which would limit the number of countries eligible, showed that agreement on broader debt relief was not secured.

The stress on a "case-by-case" basis was designed to meet German concerns about the dangers of blanket debt relief - for all debtors. The phrase "as much as" was inserted because some G7 members, including Japan, oppose 100 per cent debt relief - of all debt.

Mr Domenico Siniscalco, the Italian finance minister, described how the awkward compromise was reached: "On the wording of the debt relief we started with '100 per cent', which then became 'up to 100 per cent' and ended with 'as much as 100 per cent'."

Even among countries that support 100 per cent relief, large differences remain. The US favours writing off the stock of multilateral debt, most of which is owed to the World Bank. Canada, the UK and other European countries focus on reducing the burden of debt service paid to international institutions.

At the end of the meeting, Mr John Taylor, the US Treasury undersecretary for international development, said: "We continue to think our proposal is the best." He added that he hoped other countries would soon come round to the US view.

The UK signalled otherwise, announcing that it would pay 10 per cent of World Bank debt servicing costs for another 17 poor countries.

Agreement on increasing aid was just as elusive. The G7 agreed to set up a "work programme" to examine each country's favoured scheme. The US and Canada poured cold water on the UK's idea of an International Finance Facility to borrow money against future aid flows and to pay off the accumulated borrowing out of subsequent aid budgets.

"Do you really believe that you can scoop money from 10 years from now and not have a problem in seven or eight or nine years," asked Mr Ralph Goodale, the Canadian finance minister. "To put it bluntly, you have to make sure you're not robbing Peter to pay Paul."

European countries were more supportive, particularly of the Italian proposal for a pilot IFF to fund general immunisation as well as vaccines for HIV/Aids. But they stressed the need to refinance any borrowing.- (Financial Times Service, Reuters)