Gordon Brown’s G20 hopes fade

Gordon Brown's hopes of unveiling an orchestrated global response to the economic crisis at next month's G20 summit in London have been undermined after European leaders rejected calls for a further massive stimulus package.

The London meeting now risks being overshadowed by a row between Europe and the US over public spending. A series of leaders at an EU summit led by Angela Merkel, the German Chancellor, rejected American calls for greater borrowing and spending by Europe.

The Prime Minister has been forced to abandon his dream of turning the talks into the modern equivalent of the Bretton Woods meeting of 1944, which set up the postwar world financial system.

Among Brown's scaled-down ambitions for the G20 is the idea of doubling resources for the International Monetary Fund, the lender of last resort to bankrupt governments that was set up at Bretton Woods.

He will push for its reform to involve China and other big developing economies further.