That would see Britain picking up a 450 million pounds bill for loans in 2011 alone, including 128 million pounds for just an extra mile of Rome's rail track. Debts for other years' loans would run into billions. Ukip's economics spokesman Godfrey Bloom said: "It's irresponsible for the EIB to continue handing out suicidal loans for projects these countries simply can't afford."

"And it's outrageous the UK taxpayer is again bailing out the type of lend-and-spend policies which got us into this mess." The EIB, run by EU states and with George Osborne among its governors, said: "We don't speculate about economic circumstances of member states."

His pronouncement opens up the possibility of space missionaries heading out to the stars to convert aliens to Christianity. Speaking on the eve of addressing the British Science Festival, Dr Consolmangno said he had no problem with science and religion co-existing together. But he dismissed Creationism and claimed that the revival of "intelligent design" - the controversial theory that only God can explain gaps in the theory of evolution - was "bad theology".

Dr Consolmango is one of a team of 12 astronomers working for the Vatican, said the Catholic Church had been supporting and funding science for centuries. He said the characteristics synonymous with having a soul - intelligence, free will, freedom to love and freedom to make decisions may not be unique to humans. 'Any entity - no matter how many tentacles it has has a soul,' he said.

The Pontifical Academy of Science, of which Stephen Hawking is a member, kept the senior cardinals and the Pope up-to-date with the latest scientific developments, he said. The discovery of aliens would raise huge theological problems for the Roman Catholic church that would make the debate over women priests, clerical abstinence and contraception pale into insignificance.

Water suppliers have been told to do more to tackle leaks and advise families and firms how to cut back on usage. It comes as a separate report brands Britons some of the biggest water wasters in Europe. Desperately needed rain is unlikely in the next few weeks and the Environment Agency report warns the drought could last until next summer.

The Agency claims central, eastern and south-east England are unlikely to see a full recovery from the drought until after 2012. This time last year much of Britain was covered in snow, which would melt to fill reservoirs. But this month Anglian Water was granted a drought permit to extract an extra 17 million litres a day from the River Nene until next April. In Sussex, South East Water says it will consider applying for a drought permit with its reservoirs at Ardingly and Arlington both just over a third full.

A spokesman said yesterday: "We want to see those reservoirs filling up sooner rather than later this winter in order to secure customers' supplies for next year." Parts of the Rivers Colne, Nene, Trent and Kennet are nearing the lowest levels ever recorded for November. Boats on 10 miles of the Kennet and Avon Canal, linking Reading and Bristol, were grounded due to low water. Environment Secretary Caroline Spelman said: "If we have another dry winter, there is a high risk that parts of the country will almost certainly be in drought next summer, so it's vital we plan ahead to meet this challenge."

Mr Hague blamed the radical Basij militia, whose volunteers have been turned on the regime's opponents, adding: "The idea that the Iranian authorities could not have protected our Embassy or that this assault could have taken place without some degree of regime consent is fanciful." All British diplomats were withdrawn from Iran on Wednesday, including Dominick Chilcott, the newly appointed ambassador.

The last left the country as Mr Hague rose to deliver his statement to the Commons. He denounced Iran's actions as a "flagrant breach" of its "international responsibilities" under the Vienna Convention, which guarantees the protection of diplomatic premises and personnel. "If any country makes it impossible for us to operate on their soil, they cannot expect to have a functioning Embassy here," he added.

That rampaging mob of 'students' storming the British Embassy in Tehran on Tuesday, lobbing petrol bombs, ransacking the building, burning the Union Jack and threatening to hold hostage terrified members of staff inside the compound, was a deeply worrying spectacle for those of us who have studied the Iranian regime over the years.

The mayhem followed a vote in Iran's parliament to downgrade diplomatic relations with Britain - a response to the tough new financial sanctions imposed by London last week over Iran's nuclear programme, after the International Atomic Energy Authority warned that Iran is getting ever closer to building a bomb. These protesters were clearly orchestrated by the Iranian regime, for the mayhem could never have taken place without sanction in a country where secret police stalk the streets, torture is endemic, criminals are executed in public and foreign embassies are closely guarded and monitored.

Far from being students, many of the thugs involved were elite members of Iran's paramilitary Basiji brigades, a hard-core volunteer outfit under the control of the country's Revolutionary Guards, who answer to the country's top cleric, the Supreme Leader Ayatollah Ali Khamenei.

There were only 145 cases in the first six years of the warrant system. This means that one in four Britons sent overseas to face criminal charges since 2004 went last year. Serious concerns have emerged that the warrants are being used to extradite individuals accused of minor offences; Polish authorities have used them to pursue suspects accused of exceeding their overdraft limit or not paying for dessert.

The statistics on their use emerged ahead of a key Commons vote on Britain's lopsided extradition arrangements. Some 1,173 people, including both Britons and Europeans, were sent from the UK for trial last year compared with 699 in 2009/10, and just 178 in 2006/7. Tory MP Dominic Raab said last night: 'We've seen too many innocent British citizens go through the ordeal of extradition, not to mention appalling prison conditions, just to duck this issue. We need reform, and that includes re-negotiation of the European Arrest Warrant.'

The 24-hour walkout by two million workers is being staged amid union fury over plans to reform pensions which will involve members working longer and having to pay more. It is the biggest strike for over 30 years, with schools, hospitals, courts, transport and government all set to be hit by the walkout. But Mr Cameron told the House of Commons: 'So far the evidence would suggest that 40 per cent of schools are open.' He also said the country had full ambulance service cover and that just 18 out of 900 job centres were closed.

Making a Commons statement on the latest effects of today's action, Cabinet Office minister Francis Maude said that, as of 11am, 135,000 civil servants - less than a third - were on strike. He added: 'Most civil servants are going to work today as normal. We put in place rigorous contingency plans to ensure that, so far as possible, essential public services are maintained during such periods of industrial action. Only 16 of the 930 job centres are closed to the public.'

The euro and European shares surged on the news, which came after euro zone finance ministers agreed to ramp up the firepower of their bailout fund but acknowledged they may have to turn to the International Monetary Fund for more help. In a related move, Italy's central bank started emergency cash tenders for banks which have been squeezed particularly hard in recent weeks as Rome's borrowing costs have soared towards 8 percent, a level seen as unaffordable in the long term.

"We are now entering the critical period of 10 days to complete and conclude the crisis response of the European Union," Economic and Monetary Affairs Commissioner Olli Rehn said as EU finance ministers met.

Preparations have already been made for Ernst Uhrlau's retirement party next Wednesday when he steps down from his post as the head of the Bundesnachrichtendienst (BND), Germany's foreign intelligence agency, on his 65th birthday. The office of the chancellor has selected a posh location in Berlin for his farewell party and Angela Merkel herself is expected to attend. Uhrlau, a member of the center-left Social Democratic Party (SPD), will be turning over his post to Gerhard Schindler, a member of the business-friendly Free Democratic Party.

At events like this, the successes of the person retiring are usually celebrated. In Uhrlau's case, topping the list are his efforts to review the problematic history of the BND's creation after World War II. It has long been known that around 10 percent of the employees at the BND and its predecessor organization once served under SS chief Heinrich Himmler in Nazi Germany. In 2011, Uhrlau appointed an independent commission of historians to research the agency's Nazi roots.

Now, only one week before Uhrlau's retirement, the commission has uncovered what is a true historical scandal. The researchers have found that the BND destroyed the personnel files of around 250 BND officials in 2007. The agency has confirmed that this happened. The commission claims that the destroyed documents include papers on people who were "in significant intelligence positions in the SS, the SD (the intelligence agency of the SS and the Nazi Party) or the Gestapo." They added that some of the individuals had even been investigated after 1945 for possible war crimes. Historian Klaus-Dietmar Henke, spokesman for the commission, told Spiegel Online he was "somewhat stunned" by the occurrence.

The UK is also being "closely" consulted on the matter, the article said. The Sunday edition of the paper had reported that Chancellor Angela Merkel and French President Nicolas Sarkozy are involved in secret talks on creating a tighter fiscal union with the euro-area, a club of the 'super-Europeans' willing to abide by the strict budget discipline proscribed by Berlin. An intergovernmental treaty, modelled on the one for the border-free Schengen area, would be signed by those willing to partake in this kind of set-up, not necessarily all 17 euro-states.

In what looks like a major shift by Merkel, the plans suggest that the European Central Bank would have a stronger role in rescuing countries. The Welt am Sonntag's report suggests the chancellor is willing to soften its position on ECB lending after Berlin last week was unable to auction a third of its long-term bonds, suggesting Germany is also at risk of being sucked into the crisis.

Another possible plan would see a speeding up of the creation of the eurozone's permanent bail-out fund, the European Stability Mechanism (ESM), currently planned for mid-2013. The ECB could lend to the ESM, which in turn would prop up troubled countries and circumvent Germany's concerns about the central bank's independence.

Downgrades can increase banks' borrowing costs and put further pressure on their shaky finances. However, it upgraded ratings on two Chinese banks, Bank of China Ltd and China Construction Bank Corp. S&P said its move reflects new criteria for banks, based on changes in market trends and government support. Bank of America, Goldman Sachs, and Citigroup had long-term ratings downgraded to A- from A.

Morgan Stanley, Barclays, HSBC, Commerzbank, and UBS also had ratings cut by one notch, according to S&P's statement. S&P's move hit the shares of US banks in after-hours trading on Wall Street, with Goldman Sachs down 1% Morgan Stanley down 1.7%. Ratings for several big European banks, including Credit Suisse, Deutsche, ING and Societe Generale were unchanged.

Unions object to government plans to make their members pay more and work longer to earn their pensions. Speaking from Brussels, Chancellor George Osborne told BBC Breakfast: "The strike is not going to achieve anything, it's not going to change anything. It is only going to make our economy weaker and potentially cost jobs. So let's get back round the negotiating table, let's get a pension deal that is fair to the public sector, that gives decent pensions for many, many decades to come but which this county can also afford and our taxpayers can afford".

"That is what we should be doing today, not seeing these strikes." He added that without making difficult choices about dealing with the UK's debts the country "would be bankrupt". Shadow chancellor Ed Balls told BBC Breakfast the pensions row should have been resolved by the government. "They didn't and that is why we are in this situation," he said.

On Tuesday night, shadow chief secretary of the treasury, Rachel Reeves, told BBC's Newsnight that Labour did not support the industrial action. "We do not support the strike because a strike is a sign of failure," she said. Earlier on Tuesday, union leaders reacted angrily to Mr Osborne's Autumn Statement announcements of a public sector pay cap of 1% for two years, as well as bringing forward to 2026 the rise in the state pension age to 67. The strike was "irresponsible and reckless", said John Longworth, the director general of the British Chambers of Commerce. He added: "Trade unions are living in a bubble and ignoring the fact that Britain has to make its way in a competitive world."

The warning signs are mounting, and fresh news is adding to the gloom every day. Britain's financial watchdog has instructed banks to brace for a possible break-up of the euro zone. British currency trader CLS Bank is reportedly conducting stress tests to prepare for this worst-case scenario. Polish Foreign Minister Radoslaw Sikorski made a dramatic appeal to Germany on Monday to prevent a collapse of the currency union, saying: "We are standing on the edge of a precipice."

German investors are jettisoning derivatives on a large scale because they have lost confidence in the instruments. For the first time, it appears, people across Europe regard the downfall of the euro as a real possibility. Is it really for the first time, though? In fact, scenarios for the euro's breakup are older than the currency itself. At the end of 1998, Harvard Law School Professor Hal Scott published a paper called "When the Euro Falls Apart." He put the chances of the euro failing at around 10 percent.

Today, that's a real prospect. According to Mark Cliffe, the chief economist of ING Bank, "even the most ardent euro admirer must concede that the probability of countries leaving or the breakup of the euro zone is no longer zero."

He made clear, however, that he believes the current policy stance is appropriate. With its usual economic lever of interest rates already pressed close to zero and its balance sheet triple the size of its pre-crisis norm, the central bank has been considering how it can better use communications as a policy tool. The Fed has been debating for months ways to provide more clarity on when it might eventually tighten monetary policy, although officials have differed on how best to proceed.

Yellen said turmoil in financial markets stemming from both Europe's banking crisis and general uncertainty about the outlook had increased the risks to the global economy, and that the Fed could offer additional support to US growth. "The scope remains to provide additional accommodation through enhanced guidance on the path of the federal funds rate or through additional purchases of long-term financial assets," she told a conference sponsored by the San Francisco Federal Reserve Bank.

The NATO airstrike killed 24 Pakistani soldiers over the weekend in an apparent case of mistaken identity, the Associated Press has learned. A joint US-Afghan patrol was attacked by the Taliban early Saturday morning. While pursuing the enemy in the poorly marked border area, the patrol seems to have mistaken one of the Pakistan troop outposts for a militant encampment and called in a NATO gunship and attack helicopters to open fire.

US officials say the reports suggest the Taliban may have deliberately tried to provoke a cross-border firefight that would set back fragile partnerships between the US and NATO forces and Pakistani soldiers at the ill-defined border. Officials described the records on condition of anonymity to discuss classified matters. The incident has sent the perpetually difficult US-Pakistan relationship into a tailspin.