Far from the innocent, upright democracy of its self-image, Britain is showing a seamy side that anti-corruption campaigners say is getting worse and may be politically explosive as society becomes more unequal due to the financial and economic crises. Behind a facade of probity, London offers a haven for oligarchs and despots, a place where foreign media magnates have bought access to and influence over the government.

The scandal engulfing Rupert Murdoch's media empire has already destroyed a newspaper, cost two top police officers their jobs, seen the arrest of powerful media figures and embarrassed the prime minister and political elite.

But it points to a bigger problem in British society - overly cozy relationships among elites that are ethically dangerous, even when they do not involve outright criminality.

It's not just Britain. A Reuters investigation this month showed how some US states - notably Wyoming and Delaware - were failing to meet international standards, offering "shelf companies" to help hide assets and avoid tax. Christensen argues that states have been losing control of the financial system for more than 30 years and now find themselves increasingly at its mercy. Even groups such as Transparency International - which has traditionally focused on criticizing "conventionally" corrupt states in emerging economies - are beginning to shift their attention to developed world corruption.

Political advisers to banks warn of a growing global anti-establishment backlash. John Bassett - a former senior official at the British signals intelligence agency GCHQ and now a senior fellow at the Royal United Services Institute - says that coming after the financial and economic crises the hacking scandal "has revitalized the narrative of a corrupt elite. The long-term result is likely to be a further erosion in the credibility of the British establishment, particularly the media and police, in the eyes of citizens."

The authorities have banned live broadcasts of the riots. The trouble started after a court ruled on Tuesday the protests, called against the high cost of living, were illegal. Northern Region Police spokesperson Norah Chimwala told the BBC that one person had died in the unrest in Mzuzu, some 300km (185 miles) north of the capital, Lilongwe.

A nurse at Mzuzu Central Hospital told the Associated Press news agency medical staff were treating people with gunshot wounds."We have more than 10 people in the hospital right now, some are in a serious condition," she said, speaking on condition of anonymity. The demonstrations were called to protest against rising fuel prices, a shortage of foreign exchange reserves, alleged bad governance and poor international relations.

The UK accused Malawi of mishandling the economy and failing to uphold human rights. The government recently passed an austerity budget, raising taxes to reduce dependence on aid. Malawi is one of the poorest countries in the world, with an estimated 75% of the population living on less than $1 (60 pence) a day.

On Wednesday, state-run Xinhua news agency reported that police responded by shooting and killing 14 rioters, who the agency said threw gasoline bottles and rocks. [Updated July 20, 2011: Exile Uighur groups have disputed the official version of events. The Munich-based World Uyghur Congress says that a group of about 100 Uighurs were protesting "illegal seizures of land and the forcible disappearances of relatives by Chinese security forces" when police opened fire, prompting the clash.]

Outbursts of violence have been regular if relatively infrequent events in Xinjiang for the past two decades. In August 2010 a Uighur man who was targeting police and paramilitary officers set off a bomb rigged to a three-wheeled cart, killing seven people and injuring 14. Two years before in the city of Kashgar two Uighur men drove a truck into a group of border patrol officers who were out on an early morning run, then attacked the survivors with knives and homemade explosives. Seventeen guards were killed, and 15 injured.

The largest-scale violence in recent years happened on July 5, 2009, when young Uighur men went on a rampage in the regional capital of Urumqi, attacking non-Uighurs with clubs and knives. Two days later Han Chinese, who are the dominant ethnic group in China, launched retaliatory attacks on Uighur neighborhoods. Nearly 200 people were killed and some 1,700 injured, according to official reports. Tens of thousands of paramilitary troops flooded the city to restore order, and Internet service was blocked, only to be restored months later.

The authorities have said little about the widespread discrimination faced by Uighurs in China. It is not uncommon to hear Uighurs called "thieves" or worse in China, and such bias creates a serious obstacle to Uighurs enjoying a share of the economic opportunity afforded Han Chinese. China may well achieve its growth targets in Xinjiang, but if Uighurs are left behind the ethnic strife will only continue.

With a shoreline at the lowest land point on the globe (1,388 ft. below sea level) and no outlet, millennia of evaporation has left the seabed so caked with minerals the freshwater that flows in turns immediately lethal.

Not that much freshwater flows in these days. That's why the sea is dying, or drying up, at the rate of more than three vertical feet per year - which on the gradual slope of the western shore can translate into 65 ft. of exposed seabed. Most of the damage has been done in the last half century, when almost all the water that once reached the Dead Sea was diverted to farms and taps.

The Jordan River, so mighty in the Bible, is today a puny creek that draws snarls from disappointed tourists. "Everything changed when we started diverting water from the Sea of Galilee," says Mira Edelstein of Friends of the Earth in the Middle East. "The Jordan River used to bring 1.3 billion cubic feet of water a year. Today it's 50 million. That's 2% of what it was."

At the same time, a unique and thirsty industry has been taking water from the sea, accelerating its decline. At the southern tip of the sea, the sprawling Dead Sea Works leaches huge quantities of the fertilizer potash from the seawater by funneling water through a canal into vast evaporation ponds in what once was the sea's southern basin. The Israeli company puts some of the water back, but combined with a similar operation on the Jordanian side the result is a net loss for an already shrinking lake. "It's the combined issue of the Jordan River not flowing in anymore and industry drawing out water from the south," Edelstein says. "No wonder the Dead Sea is dying."

To add insult to injury, it emerged yesterday that those largely responsible for bringing Britain's economy to its knees - bankers and finance workers - have scooped bonuses totalling 14 billion pounds this year. While the phone-hacking scandal will be investigated by a public inquiry led by a senior judge, there has been no equivalent investigation into the actions of bankers and the Government's failure to hold them to account for triggering the financial crisis.

There were growing calls for Westminster to lift its gaze from phone-hacking and focus on the threat to the livelihoods of millions.

David Cameron, speaking in Lagos, Nigeria, pledged to focus on issues that 'really matter' to people amid fears the Government is beginning to look paralysed by the phone-hacking furore. The Prime Minister, who cut short a tour of Africa last night to return to address MPs, said: 'It is important for the British Prime Minister and Government to get on with those things that really matter to Britain, which is making sure there are jobs and exports.'

Office of National Statistics figures showed that between April 2010 and March 2011, a total of 13.6 billion pounds in bonuses was paid out to workers in the 'finance and insurance' sector. They account for just 4 per cent of the workers in this country, but get about 40 per cent of the bonuses paid. The size of the massive windfall will outrage millions of hard-working Britons who face a daily battle to stay financially afloat during the economic downturn.

Their finances are under attack from tax rises, pay freezes or paltry pay rises, soaring gas bills, rip-off petrol prices - and no bonus from their boss. The figures reveal the average finance and insurance worker got a bonus of 12,500 pounds. The average worker in Britain, who does not get a bonus, has to work for six months to earn that much.

Some of the big bonus winners even work for banks which are part-owned by the taxpayer. There are 323 'key staff' at Royal Bank of Scotland who shared a pay and bonus pot of 375 million pounds last year, an average of 1.16 million pounds each. By comparison, the rest of the country is being crippled by the first fall in disposable household income since 1981, according to the ONS.

Anxiety over current and future hardships is driving many Greeks into the streets. But while the lines continue to get longer outside food banks, many of the wealthy are getting through the crisis more or less unscathed. The average Greek consumer is now forced to pay the third-highest VAT rate in Europe, the third-highest social insurance contributions and the second-highest fuel taxes.

Two-thirds of Greeks regularly pay their taxes as well. Indeed, "contrary to widespread views," as the Friedrich Ebert Stiftung study put it, these taxes are automatically deducted along with social contributions from the paychecks of Greeks employed in both the private and public sectors. It is mainly the small wealthy class that manages to cheat the authorities out of 40 billion euros in tax each year. That is the OECD's estimated volume of annual tax evasion. The Greek central bank puts the losses at somewhere between 15-20 billion euros.

These tax cheats have little to fear. As Panos Kazakos, an Athens-based professor of politics, puts it: "I have never seen a single person put in jail for tax evasion." Robolis adds that the government, which supposedly has no money available for social services, just published a list of companies that owe the state a total of 9 billion euros in social contributions - but it does nothing to get that money.

This injustice is what is making people in Greece so angry. The government has promised to change the system. But Robolis no longer has faith in its pledges. "This situation has been going on for 30 or more years," he complains. "They're just trying to protect themselves with these statements."

The US Geological Survey said the 6.1 magnitude earthquake occurred 17.8 km (11.1 miles) underground, about 42 km (26 miles) southwest of Ferghana, a city in the east of Uzbekistan in an area close to the border with Kyrgyzstan. It had earlier reported the earthquake at magnitude 6.2, at a depth of 9.2 km (5.7 miles) underground.

There were no immediate reports of casualties. Local residents on either side of the Kyrgyz-Uzbek border, reached by Reuters by telephone, reported prolonged, violent shaking that cracked the walls of their houses.

Ferghana valley - split between Uzbekistan, Tajikistan and Kyrgyzstan in a confused patchwork of Soviet-era borders - is Central Asia's most densely populated area. Tremors were felt across the vast, mountainous region.

In Kadamzhai, a Kyrgyz city close to the epicentre, local resident Seitmurad Kozhoyev said by telephone that windows had been shattered and at least one multi-storey apartment block had been badly damaged. Earthquakes are frequent in Central Asia, a strategic and mineral-rich region of mountain and steppe between Afghanistan, Iran, Russia and China. Ferghana valley is a major centre of cotton and silk production, and the hills above are covered by walnut forests.

While the euro zone is fighting to contain an escalating debt crisis, low bond yields show Britain has retained the markets' trust thanks to the government's unswerving commitment to erase a budget deficit of more than 10 percent. But Finance minister George Osborne's proud proclamation that he has no 'Plan B' could start to ring hollow if a sharper downturn hits tax returns and forces either more borrowing or even harsher spending cuts.

The stakes could not be higher and debate is heating up. The storm over a phone hacking scandal and politicians' ties to Rupert Murdoch's media empire are buffeting Prime Minister David Cameron now but the government's chances of re-election in 2015 really hinge on its success in balancing the budget while keeping the economy moving.

International organisations like the IMF back Osborne's plan while at home, protesters have taken to the streets and the Labour opposition has demanded a rethink to boost the struggling economy, which may have shrunk in the second quarter after flat lining over the previous six months. "It wouldn't take a very big shock for his plans to go adrift. He has not a lot of money in the bank," said Carl Emmerson, deputy director at the Institute for Fiscal Studies think tank.

The choreography appears to be that euro zone policymakers are waiting for the banks, under the auspices of the IIF, to produce their part of the plan and then frantic work will be done to bash it into a broader political deal (probably by sherpas on Wednesday and through the night).

If you glance back to what was ruled out in the past and is clearly not ruled out now, it's pretty instructive. All of which leads wiser heads than mine to wonder whether this crisis is only over when the bloc's leaders agree to the euro zone bond, something which, for now, remains strictly off limits for the Germans and others. That will not be on Thursday's agenda!

At least Merkel is definitely turning up to the summit now. She clearly needs to begin work on selling this new package to a German public which is anything but supportive. She conspicuously didn't do so in her big set piece interview on German TV over the weekend. The threat of contagion remains the most serious concern for the bloc. Italian and Spanish 10-year yields have leapfrogged six percent and a Spanish T-bill auction today is our latest litmus test of that.

From Texas to the Dakotas, and east to Illinois and Indiana, temperatures and humidity levels soared on Monday and were expected to remain high through at least the end of the week, by which time forecasters say the East Coast will get to share the misery.

Seventeen states issued heat watches, warnings or advisories on Monday, when the heat index easily surpassed 100 degrees in many places, including 126 in Newton, Iowa, and 119 in Madison, Minnesota. Things were heating up on the East Coast on Tuesday, and the National Weather Service said temperatures in New Jersey that were expected be in the lower 90s and could reach 100 degrees by the end of the week. Cooling centers were set up in many cities to offer residents places to escape, and they were expected to remain open during the day until the heat abates.

In Wisconsin, where the heat index was expected to be in the 100s again Tuesday, the Wisconsin Public Service Corp said it didn't expect brownouts or blackouts despite the high usage, but it warned that customers should expect to pay more on their next bills.

The 234-190 vote marked the power of deeply conservative first-term Republicans, and it stood in contrast to calls at the White House and in the Senate for a late stab at bipartisanship to solve the nation's looming debt crisis. President Barack Obama and a startling number of Republican senators lauded a deficit-reduction plan put forward earlier in the day by a bipartisan "Gang of Six" lawmakers that calls for $1 trillion in what sponsors delicately called "additional revenue" and some critics swiftly labeled as higher taxes.

The president said he hoped congressional leaders would "start talking turkey" on a deal to reduce deficits and raise the $14.3 trillion debt limit as soon as Wednesday, using that plan as a roadmap. Wall Street cheered the news of possible compromise as well. The Dow Jones industrials average soared 202 points, the biggest one-day leap this year.

The German committee chairwoman, Doris Pack, accused Ukip MEP Paul Nuttall of grandstanding when he flourished a copy of yesterday's Daily Express and described the EU proposal as "baloney". She said, to applause from some MEPs, that it was just "better not" to speak about the British press. She later added: "In the Lisbon Treaty there is a possibility to leave the EU... I only wanted to say it."

MEPs at the meeting said they understood her comments to mean Britain had the mechanism to leave the EU if it wanted. Mr Nuttall said: "The chairwoman got quite irate and said the good thing about the Lisbon Treaty is that it includes a clause that would let us leave, that would allow we British to leave."

As financial markets target Italy and Spain and amid the first stirrings of mass popular discontent in those countries, there is a realisation among the European political elite that ad hoc bailouts of the type used to shore up Greece, Portugal and Ireland won't work with these much larger economies. A rational response would be to allow all these countries to re-establish their former currencies and let devaluation shrink their debts and kickstart growth.

But there is an iron will among the Eurocrats not to let that happen because if it does then the dream of a federal Europe will be gone for ever. So in Brussels and Berlin and Paris work is already proceeding apace on a plan to solve the failure of partial economic integration (monetary union) by leaping into full integration (fiscal union). Fiscal union will mean centrally imposed public spending controls and, crucially, the acceptance that the treasuries of all eurozone countries will have ultimate liability for each other's debts.

THIS IN EFFECT WILL MAKE MIGHTY GERMANY GUARANTOR OF ALL WEAKER EUROZONE MEMBERS. Under its own terms it will work because speculators will suddenly have little reason to fear a default by any of the southern European countries or Ireland. But the cost in terms of lost democracy would be enormous. Not only will the eurozone countries have lost control of their interest rate, exchange rate and money supply, they will also have ceded permanently the ability to decide on public spending levels, tax rates and budget deficits.

Their democracies will be hollowed out as all important economic decisions will require the consent of unelected officials in Brussels or Frankfurt (where the European Central Bank is based) with no recourse to domestic opinion. Worse still, the old saying that he who pays the piper calls the tune will be borne out. To convince German public opinion to take on this new guarantor duty, GERMANY WILL HAVE TO BECOME THE DOMINANT FORCE behind monetary and fiscal policy throughout the eurozone.

IT WILL, HOWEVER RELUCTANTLY, HAVE GAINED GREATER EUROPEAN DOMINATION THROUGH FINANCIAL MEASURES THAN EVER IT DID BY FORCE OF ARMS. And this "great leap forward" must be made soon or not at all because the speed at which the financial markets sniff out weakness means that Italy and Spain cannot be left in limbo for long or the break-up of the euro will ensue.

Perhaps we could revert to the European Free Trade Association and sign our own trade deal with Brussels. All full EU membership will entitle us to is obligations to make massive net payments to Brussels and to be bound by job-destroying EU regulations. As our political class desperately resists demands for a referendum on departing from the EU, a startling new possibility is emerging: that well before we see Britain leaving Europe, WE ARE GOING TO SEE MUCH OF EUROPE LEAVING BRITAIN.

The veteran detective - known as Yates of the Yard - quit his 181,000 pounds-a-year position hours before allegations about his conduct were referred to the police watchdog. They included claims that he 'inappropriately secured' a role at the force for 27-year-old Amy Wallis, daughter of former News of the World deputy editor Neil Wallis. Mr Wallis, 60, was arrested over phone hacking last week and it later emerged he was paid 1,000 pounds a day as a PR consultant by the Metropolitan Police after he left the paper in 2009.

He has been a friend of Mr Yates for 12 years. Following Mr Yates's departure Assistant Commissioner Cressida Dick, the officer who oversaw the bungled anti-terror operation which resulted in the fatal shooting of Jean Charles de Menezes, was put in temporary charge of the Met's Counter-Terrorism Command. The disclosure comes after the Yard was forced to admit that another ex-News of the World journalist, Neil Wallis, had been employed by the Met as a part-time PR consultant, triggering the resignation of the commissioner, Sir Paul Stephenson.

Another former senior News of the World journalist was carrying out potentially sensitive work for Scotland Yard while employed by the paper, it has been revealed. Alex Marunchak had been employed by the Metropolitan Police as a Ukrainian language interpreter with access to highly sensitive police information. The force acknowledged that his employment 'may cause concern', adding that some professions may be 'incompatible' with such a sensitive job.

It was his explosive claims last autumn that reignited the scandal and ultimately led to the tumultuous events of the past fortnight which have shaken the political, police and media establishments. Police were investigating the possibility that he had killed himself, saying his death was 'not thought to be suspicious'.

It came on a day when:

- The Metropolitan Police was left in turmoil as counter-terrorism officer John Yates was forced to follow Commissioner Sir Paul Stephenson and resign;

- Mr Yates faced investigation over claims that he secured a Scotland Yard job for the daughter of hacking suspect Neil Wallis;

- David Cameron cut short a trip to Africa and said he will fly back to Britain today after agreeing to delay Parliament's summer break to discuss the affair;

- London Mayor Boris Johnson infuriated Number Ten by refusing to say whether the PM should quit over his hiring of Mr Coulson;

- Police recovered a bag containing a computer, phone and paperwork found in a bin near Rebekah Brooks's London home.

The body of Mr Hoare, 47, was discovered by police yesterday morning at his modern first-floor flat in Watford. Until Mr Hoare spoke out in September, pressure had eased on Mr Coulson, recruited by David Cameron as his media chief in 2007 after resigning as editor of the News of the World when royal reporter Clive Goodman and private investigator Glenn Mulcaire were jailed. Last week, Mr Hoare was back in the spotlight with further claims, telling the New York Times that reporters at the News of the World were able to use police technology to locate people using their mobile phone signals in exchange for payments to police officers.

Mr Hoare was sacked from the News of the World over drink and drug problems in 2005, and last year sources at the paper said that his claims should be treated with 'extreme scepticism'. But a friend who saw him more recently described him as 'sober' and wanting to rebuild his career.