The outcome is expected to go down to the wire as the ruling party's slim majority is pushed to the limit by the opposition's refusal to support the deal, a wave of national strikes, and another round of public protests. Werner Faymann, the Austrian Chancellor, said on Sunday he "can't rule out" a Greek default and Wolfgang Schaeuble, the German finance minister, revealed that Europe is preparing "for the worst".

"We are doing everything we can to prevent a perilous escalation for Europe but must at the same time be prepared for the worst," Mr Schaeuble said. "If things turn out differently than everyone expects that would of course be a major breakdown. But even in 2008, the world was able to take coordinated action against a global and unpredictable financial market crisis."

If the austerity package is passed, Greece has been promised a second bail-out of up to 120 billion euros. Private sector creditors are being urged to participate on a voluntary basis but evidence is mounting that their involvement will be less than the 30 billion euros officials at the European Union and International Monetary Fund hope.

German banks were reported over the weekend to be pushing for state guarantees in return for voluntarily "rolling over" the debt, but the demands were rejected by Chancellor Angela Merkel as they would increase the German taxpayers' exposure. George Soros, the hedge fund manager famous for shorting Sterling in the 1990s, added that it is "probably inevitable" that a country will quit the euro. "There are fundamental flaws that need to be corrected," he said.

"If Standard & Poor's or any of the other major rating agencies downgrade the US, Treasuries would likely drop in value, possibly by as much as $100 billion," said analysts at S&P Valuation and Risk Strategies, a research team separate from the agency. Currently, Treasury yields do not reflect concern about the US losing its top rating.

The yield on 10-year Treasury notes fell to 2.85 per cent on Friday, a low for the year. Investors are concerned about a weaker economy and financial contagion from the euro debt crisis. Yields on four-week Treasury bills have been driven below zero. While the threat of a US downgrade is remote, it remains a possibility given the projections of large long-term deficits and the impasse over raising the $14,300 billion Treasury debt ceiling.

In April, S&P affirmed its US rating but revised its outlook to negative because of the deficit and the risk that it will not be cut meaningfully by 2013. Moody's has said it could place the US government on review for downgrade if there is no resolution of the impasse over raising the Treasury debt ceiling before the August 2 deadline.

Defense Undersecretary Guido Crosetto told news agency ANSA he was "fed up" with Tremonti's autocratic style, saying he was imposing indiscriminate cuts on every ministry but his own. "It's clear that the economy minister just wants to find a way to upset everything and bring down the government," said Crosetto, a former economic spokesman for Prime Minister Silvio Berlusconi's People of Freedom (PDL) party.

The austerity budget aimed at eliminating the budget deficit in 2014 is due to be approved by the cabinet on Thursday, following a meeting of ruling coalition leaders on Tuesday to find political agreement over the measures. Economy Ministry sources say the package will be worth some 43 billion euros, with deficit cuts of around 3 billion euros this year, 5 billion in 2012, 20 billion in 2013 and 15 billion in 2014.

Tensions within the center-right coalition have been running high for weeks, with some members pushing for tax cuts even as the government readies the deficit cuts that markets and ratings agencies are watching closely. Italy's budget deficit is targeted at 3.9 percent of gross domestic product this year, down from 4.6 percent in 2010. These levels are lower than in most euro zone countries, but Italy's stock of debt - at around 120 percent of GDP - is second only to Greece's in the 17-member bloc.

"We are on the verge of an economic collapse which starts, let's say, in Greece, but it could easily spread. The financial system remains extremely vulnerable." Concern Greek lawmakers will fail to pass austerity measures to ensure the next installment of the nation's bailout is roiling global markets and pushed the euro to a record-low against the Swiss franc last week. Greece is one of three euro-region members to have sought international bailouts amid the sovereign debt crisis.

"I think most of us actually agree that [Europe's crisis] is actually centered around the euro," said Soros. "It's a kind of financial crisis that is really developing. It's foreseen. Most people realize it. It's still developing. The authorities are actually engaged in buying time. And yet time is working against them," he said. "You need a Plan B and there's no Plan B at the moment," Soros said. Instead, "authorities are sticking to the status quo" and not "recognizing that there are fundamental flaws that need to be corrected," he said.

As Wen Jiabao, the Chinese premier, stepped off his plane in Birmingham on Saturday, it was difficult to avoid the feeling that the UK, and Europe, have never looked weaker in Chinese eyes. In private, senior Chinese diplomats are now openly scornful of Britain's economic prospects and have even asked why Mr Wen should grace such a weak trading partner with three days of his time.

Indeed, it is telling that the first stop on Mr Wen's tour is Longbridge, the old MG Rover car factory that passed into Chinese hands in 2005. Once a byword for poor productivity, wildcat strikes and trade union power in its British Leyland and Austin Rover days, the plant is now host to China's biggest industrial presence in the UK. Owned by Shanghai Automobile Industry Corporation, the factory designs and assembles MG cars in the UK made from car parts manufactured in China.

However, the Longbridge site remains the only major example of Sino-British co-operation, something that the Prime Minister, David Cameron, whose advisers have helped co-ordinate the visit, is determined to change. On Mr Cameron's visit to China last year, a target was announced for increasing bilateral UK-China trade to $100 billion by 2015, from its 2010 total of $63 billion and Number 10 sources said yesterday that they believe that "progress has been made" on hitting that figure.

More than 2 feet of water rushed in around containment buildings and electrical transformers at the 478-megawatt facility located 20 miles north of Omaha. Reactor shutdown cooling and spent-fuel pool cooling were unaffected, the NRC said. The plant, operated by the Omaha Public Power District, has been off line since April for refueling. Crews activated emergency diesel generators after the breach, but restored normal electrical power by Sunday afternoon, the NRC said.

Buildings at the Fort Calhoun plant are watertight, the agency said. It noted that the cause of the berm breach is under investigation. NRC Chairman Gregory Jaczko and other officials planned to visit the site on Monday. Jaczko will also visit the Cooper Nuclear Station near Brownville, Nebraska, another facility that has been watched closely with Missouri River waters rising from heavy rains and snow melt.

"They came in on the El train and hit Sears," police Superintendent Michael Chitwood said. "They stole sneakers, socks, watches, whatever they could get their hands on, and left. Imagine the guts of this gang of young hoodlums. One was 11 years old. The others arrested ranged from 12 to 16 years old. They planned this out earlier in the day on a social networking site. It was pre-planned. They got on the El, got off at 69th Street Terminal and walked up the hill to Sears."

Kyree Marsh, 19, of the 5500 block of Spruce Street, Philadelphia, was arrested and charged with retail theft, conspiracy to retail theft and corruption of minors. Police recovered some of the stolen sneakers and socks that were in the backpack of one of the individuals arrested and in the pockets of others taken into custody.

According to the affidavit, the Sears loss-prevention officer saw the mob enter the store at 7:09 pm on Thursday. The group then began taking merchandise off the shelves. "He watched the group enter the store together from the 69th Street entrance," Chitwood said. "It was fast. They ran out, leaving empty shoeboxes and store tags behind. Fortunately, no customers or store employees got hurt. Due to the quick response by police, we were able to grab them up. They were heading back to the El train."

According to Chitwood, the juveniles received citations for retail theft and will answer charges before the county's juvenile justice system. "The parents should be held accountable," Chitwood said. "And where were the parents of the 11- and 12-year-olds when their children were riding into 69th street with a mob of teenagers? If I could, I would charge the parents. Certainly, this is unacceptable behavior. It was intentionally planned earlier in the day to gather and go to Upper Darby to rob and pillage. There has got to be consequences, and I don't mean a slap on the wrist. The county has got to send a strong message. This was a pack attack and will not be tolerated."

The 2,000-foot berm collapsed about 1:30 am Sunday, allowing the swollen river to surround two buildings at the plant. The NRC says those buildings are designed to handle flooding up to 1014 feet above sea level. The river is at 1006.3 feet and isn't forecast to exceed 1008 feet.

The NRC says its inspectors were at the plant when the berm failed and have confirmed that the flooding has had no impact on the reactor shutdown cooling or the spent fuel pool cooling. NRC Chairman Gregory Jaczko will visit the plant Monday.

Among the ordnance were Fajr 4, Fajr 3 and Zilzal missiles, allegedly removed by Hizbullah from Syria due to fears the regime of President Bashar al-Assad may fall. According to the report, Hizbullah is unsure it would enjoy the same strong support under a new government that it has under the Assad regime, where it was able to maintain its own storage depots.

The terrorist organization is also fearful that Israel may bomb its convoys as they transport the missiles to Lebanon, the source told the French newspaper. Unnamed intelligence agencies have been monitoring the progress of the convoys, which are camouflaged.

"If we succeed in opening the door for negotiations, we're not going to stop from attaining what belongs to us as Palestinians in this General Assembly starting on September 20," Mansour insisted. American and European efforts to restart Israeli-PA negotiations have been specifically intended to avert the PA's United Nations statehood bid, which they say is counter-productive.

"Unlike the construction in the West Bank, which is an illegal unilateral act, declaring a state is a given right which is not considered unilateral," Mansour insisted. Israel "did not ask permission to declare a state in 1948, the US did not ask the British for permission to declare a state in 1776. Our declaration of state is a natural right and not a unilateral act," he said. "Our independence is not one of the core issues," Mansour said.

Israeli Foreign Minister Avigdor Liberman previously stated a unilateral declaration of PA statehood would render the Oslo Accords null and void. The 1993 Oslo Accords, which serve as the basis of Israeli recognition of, and all cooperation with, the PA, contain the express understanding that an independent PA state would only be attained through bilateral negotiations and that any statehood moves outside that framework were proscribed.

Recent polls indicate the vast majority of Jewish Israelis do not believe negotiations with the PA are in Israel's interests at this time due to the PA's inclusion of Hamas in government and its unilateral statehood bid at the United Nations.

The legislative session went into overtime as conservative lawmakers fought for changes to enhance protection for faith-based groups opposed to recognising gay marriages. The decision followed weeks of contentious debate and negotiations between Governor Cuomo and the GOP-controlled Senate.

After the bill passed in the Assembly, it was unclear if the bill had secured enough support to pass in the Senate. After a several undecideds moved to support the bill - including Republican Roy McDonald who famously defended his decision, saying '...I don't care what you think. I'm trying to do the right thing' the balance was tipped. Even when Governor Cuomo had secured 31 votes (32 are needed to pass the bill), the question remained whether Senate Majority Leader Dean Skelos would allow the bill to come to a vote on the Senate floor.

After days of crafting religious protections into the bill, and seven hours of GOP leaders' backroom talks, Skelos said the bill could come to a vote on Senate floor. The turning point came when Republican Senator Stephen Saland threw his support behind the measure, being the 32nd senator to do so, clinching the support needed to pass the bill. He said: 'I have to define doing the right thing as treating all persons with equality. I certainly am at peace with my vote.'

New York, the nation's third most populated state, will join Connecticut, Iowa, Massachusetts, New Hampshire, Vermont and Washington DC, in allowing same-sex couples to wed. Huge street parties erupted in New York with celebrants waving rainbow flags and dancing after the historic vote.

Shop staff have been assaulted by parents after being challenged about buying 18-rated DVDs for the child with them. The study, Letting Children be Children, has led to a pledge from High St stores to stop selling 'sexy' underwear to children and a promise from watchdog Ofcom to tighten up the use of sexual images before the broadcast watershed. But author Reg Bailey blames 'complicit' parents for an 'unthinking drift towards ever greater commercialisation and sexualisation' of children and described it as 'poor parenting'.

He was 'alarmed' at the number of adults who bought violent video games and played them with their children. Mr Bailey said: 'One father said it was okay he played Grand Theft Auto with his 13-year-old son because it helped them bond together.' He told the Daily Telegraph that there 'must be easier ways of bonding' with a child than playing a game that allowed 'gangsters to run over prostitutes'. 'I am concerned any parent would ignore these age restrictions. They are there for a reason.'

His criticism came as it emerged that hundreds of thousands of children under 13 are using Facebook with their parents' apparent blessing. The latest figures from the Advertising Association claim Facebook has 988,000 under-12s on the site in Britain. American founder Mark Zuckerberg wants the age restriction lifted. Miss Fraser said there were serious implications if children lied about their ages because Facebook would believe they were 18 and allow gambling, alcohol and cosmetic surgery advertising to be targeted at their pages.

As their sad, bewildered faces show whenever they appear on our screens, the EU's leaders have nowhere to turn. They cannot afford to allow Greece to fall out of their beloved euro, which might trigger an international currency crisis, the consequences of which no one can calculate. On the other hand, they cannot afford to continue pouring tens of billions of euros, which will never be repaid, into a basket-case economy. They - and we - are impaled on an impossible hook.

One of the few sources of pleasure in this mess has been to witness the discomfiture of our own homegrown euro-zealots who, a decade or more ago, were obsessively urging Britain to join the lemmings as they set off for that ultimately inevitable cliff. There was no cheerleader louder than the BBC's Today programme, which back in the late 1990s was almost daily wheeling on the likes of Michael Heseltine, Chris Patten and Leon Brittan to argue, unchallenged, that Britain was doomed unless we signed up.

Last week, in a ghostly, forlorn echo of those times, Lord Brittan was interviewed on Today by Evan Davis, himself once a stalwart cheerleader for the cause. A reader has sent me the transcript of a programme from 2003 in which Davis was trumpeting how happy the Greeks were, after years of inflation with the drachma, to be part of a currency which was "stable" and "quite secure".

Last week, of course, Lord Brittan was adamant that Greece must remain in the euro, while observing that the country had brought these problems on itself because it had "simply been spending more than it could possibly afford". Rather more to the point, one might have thought, was the cover of the latest issue of Private Eye, showing two speech bubbles coming out of the Parthenon. The first said "Massive debts, greedy banks, dodgy politicians, reckless borrowing, cuts, strikes...". The second agreed: "They should let Britain go bust."

Far more than most people realise, we in Britain are approaching a financial abyss almost as great as that into which Greece has been falling.

China's plan to continue to invest in the continent's volatile sovereign debt market comes as efforts continue to prevent Greece's financial crisis making it the first nation to be forced out of the euro. "China is a long-term investor in Europe's sovereign debt market," Mr Wen said at a press conference with the Hungarian prime minister, Viktor Orban.

"In recent years we have increased by quite a big margin our holdings of government bonds. We will consistently continue to support Europe and the euro." He added: "China is ready to work with Europe to share opportunities, cope with challenges and achieve common development and to make unremitting efforts for stable development of the world economy and an in-depth development of China-Europe ties."

Mr Wen's comments, made before boarding a flight to Birmingham, came after a week in which EU leaders committed themselves to staving off a Greek default provided that the prime minister, George Papandreou, pushes through a package of budget cuts next week. As a signal of China's enthusiasm for doing deals with Europe, Mr Wen signed 12 trade deals with Hungary and agreed to finance more of the country's debt.

His openness in pledging his support will also bolster the UK Government's hopes of strengthening Anglo-China ties during his time in the UK, when he will tour the Chinese-owned MG car factory in Longbridge and attend a UK-China summit at 10 Downing Street tomorrow. Writing in today's Sunday Telegraph, Jim O'Neill, chairman of Goldman Sachs Asset Management, said that the eurozone should look east for solutions to their continuing debt problems. He said that it is likely that sovereign wealth funds would be keen to invest.

But they (and we) face a huge looming crisis. It transcends politics and political candidates - it is much bigger than Michele Bachmann's hair or Barack Obama's thesaurus - and sometime soon they are going to have to face it. It's the debt. America's federal government debt is growing at $40,000 per second. It has reached $14 trillion, whatever that means. More comprehensible perhaps is this fact: the debt will soon match the entire GDP of the United States. Outside wartime, that has never happened before.

The real issue is the future of America's domestic spending. The projections are appalling: the non-partisan Congressional Budget Office thinks that by 2030 interest payments plus spending on pensions and health will take up all the government's tax income. Everything else, from education to war-fighting, will have to be borrowed for. Or cut out.

A nation whose productive capacity, whose support of economic and political freedom plays such a big part in our world could be heading for a period of poverty and introspection. AND THE POVERTY COULD COME QUITE SUDDENLY - brought on by interest rate rises forced on America by world markets, or by foreign powers selling dollar bonds.

While making my BBC Radio Four documentary 'Analysis: America's Debt', I asked Richard Haass, of the Council on Foreign Relations think tank, whether the fiscal crisis might allow the US to be blackmailed. His answer: "Yes ...one can imagine a situation nowadays, where say there is a crisis over Taiwan between the US and China - which holds a significant number of dollars - and one can imagine the Chinese might be prepared to threaten the dollar, make some comments to weaken it unless the US backs off some of its support of Taiwan."