After months of bitterly partisan deadlock, House Republican and Democratic leaders swung behind the bill on Monday, ratifying a deal sealed the night before with a phone call from House Speaker John Boehner to President Obama. House Democrats were evenly split on the legislation - 95 for and 95 against - while 174 Republicans voted for the measure and 66 opposed it.

That vote will take place barely 12 hours before Washington is due - according to the US treasury department - to become unable to meet all its bills. The vote in the Republican-controlled House was considered the biggest obstacle to the legislation; its approval by the Democratic-controlled Senate is viewed as all but certain. In a key point for President Obama, the bill would raise the debt ceiling into 2013 - meaning he would not face another congressional showdown on spending in the middle of his re-election campaign next year.

The compromise deal deeply angered both right-wing Republicans and left-wing Democrats. Liberals have been unhappy that the plan relies on spending cuts only and does not include tax rises, although Mr Obama could still let Bush-era tax cuts for the top brackets expire in January 2013. House Republicans were displeased that the bill did not include more savings.

The bill was the focus of criticism, some of it anguished, from both sides of the House. "I did not come to Washington to force more people into poverty," said Democratic congressman Jim McGovern. His colleague, Emanuel Cleaver, described the deal as "a sugar-coated Satan sandwich" on his Twitter feed.

Republican Representative Mark Mulvaney said: "At the end of the day, Washington's spending still has us sprinting toward a fiscal cliff. And this bill barely slows us down." The deal would enact more than $900 billion in cuts over the next 10 years. It would also establish a 12-member House-Senate committee charged with producing up to $1.5 triilion of additional deficit cuts over a decade.

Yields on Italian government bonds, it seems, aren't the only things rising in the country this summer as investors begin to ask if Italy will be the next domino to fall in Europe. Currently, more bets on credit defaults - so-called credit default swaps (CDS) - are being taken out on Italy than any other country.

With a gross CDS volume of almost $306 billion (212.69 billion euros), the country is currently in the lead, ahead of Brazil ($179 billion) and Spain ($176 billion). Indeed, the desire among investors to bet on a default in Italy and Spain appears to be growing. Since mid-June, the bets against Italy have risen by $23 billion and those against Spain by $18 billion.

Still, if a country does default, it doesn't automatically mean that the entire value of a CDS would be paid out. This is because betting partners often hedge the bet through offsetting transactions. So the maximum amount that would have to be paid out if Italy were to default would be about $25 billion. For Spain, that figure would be $18 billion.

But even at these amounts, experts have expressed doubt over whether the participants would actually be able to come up with their share of the bet. If some of these betting partners were unable to pay, it could rattle the markets even further. The reason is that a CDS works like insurance: Creditors purchase them in order to provide protection in case their debtor defaults. But the CDS market is also unregulated, and the derivatives played a role in the global financial meltdown in 2008 after the subprime mortgage market collapsed.

UK fishing crews have thrown away stocks of cod worth about 1 billion pounds since 1963 due to the practice of discarding catches which exceed or fall outside quotas, according to a thinktank report. Across all EU fleets, stocks of cod worth 2.7 billion pounds were discarded in the North Sea, the Channel and Skagerrak, the strait adjoining Norway, Sweden and the north of Denmark between 1963 and 2008, the New Economics Foundation (NEF) study, Money Overboard, calculated.

Using discard data compiled by the International Council for the Exploration of the Sea and focusing just on cod, one of the best-documented stocks, the NEF calculated that just over 2.1 million tonnes of the fish was thrown overboard during the period. The report adds fuel to the bitter debate over the longstanding fisheries practice, particularly prevalent in heavy-regulated EU waters, of throwing overboard a significant proportion of any catch - up to two thirds in some areas - most of which is by this time dead or dying.

The attack in Kashgar city on Sunday afternoon was the latest violence to shake the region where Muslim Uighurs have long resented the presence of Han Chinese and religious and political controls imposed by Beijing. It came less than 24 hours after two small blasts hit the city, which is dominated by Uighurs.

"A group of religious extremists led by culprits trained in overseas terrorist camps were behind the weekend attack," a Kashgar government statement said. An initial police investigation found that the leaders of the group behind the attack had learned about explosives and firearms in Pakistan at a camp of the separatist "East Turkestan Islamic Movement," it said.

Police shot dead five people and arrested four others after they stormed a restaurant, set it on fire after killing the owner and a waiter, and then ran onto the street and hacked to death four people, Xinhua news agency reported.

The US House of Representatives is due to vote on a bill to raise the country's debt ceiling, allowing it to borrow more money to cover spending commitments. If it fails to extend the current limit of $14.3 trillion dollars, the federal government could find itself struggling to make payments, and risks the loss of its AAA credit rating. The United States is currently spending around $200 billion more than it collects in revenue every month.

Apple, on the other hand, is making money hand over fist, according to its financial results. In the three months ending 25 June, net income was 125% higher than a year earlier at $7.31 billion.

Security forces killed dozens in the city of Hama, the hardest-hit area. The government said troops were sent to Hama to remove barricades erected by the protesters. But an official at the US embassy in Damascus dismissed those claims as "nonsense", saying the government had launched "full-on warfare" against its own people.

Mr Obama said the reports from Hama were horrifying and demonstrated the true character of the Syrian regime. "Once again, President Assad has shown that he is completely incapable and unwilling to respond to the legitimate grievances of the Syrian people," he said. Mr Obama said he was appalled by the government's use of "violence and brutality against its own people". Ministers from France and Germany also condemned the day's violence. Germany, currently a UN Security Council member, has requested emergency discussions in New York on Monday.

Hama - a bastion of dissidence - occupies a significant place in the history of modern Syria. In 1982, then-President Hafez al-Assad, father of Bashar, sent in troops to quell an uprising by the Sunni opposition Muslim Brotherhood. Tens of thousands were killed and the town flattened. The city, which has a population 800,000, has seen some of the biggest protests and worst violence in Syria's 2011 protests. It was slow to join in, but has now become one of the main focuses of the revolt, and is largely out of government control.

But Congress still has to approve the deal, and with votes in both houses expected on Monday. The parties face a Tuesday deadline to raise the $14.3 trillion (8.7 trillion pounds) debt limit. "I want to announce that the leaders of both parties in both chambers have reached an agreement that will reduce the deficit and avoid default, a default that would have had a devastating effect on our economy," Mr Obama said. The US president said it was not the deal he would have preferred, but noted that the compromise plan would make a "serious downpayment" on the US deficit.

Jane O'Brien, BBC News, Washington writes:

"The president says it's not the perfect deal. But he and the leaders of both parties now believe they have the framework for something they can put to their party rank and file. It's still likely to be a tough sell. The Republican Tea Party members are unlikely to support it because the cuts don't go far enough, and many Democrats will be furious that it doesn't include tax hikes.

Both sides will hold further discussions on Monday before the agreement is drafted into legislation that can be put to a vote. America's credit rating may still be downgraded, but it now looks more likely that the world's most powerful economy will be spared the humiliation of not being able to pay its bills on Tuesday."

Once you have signed up via the link on Page 5 we will add your signature to our exclusive "Britain wants a referendum to leave the EU" petition, registered yesterday on the Government's new directgov e-petitions website. The Government has said it would consider any public campaign backed by 100,000 signatures for a debate in Parliament.

Joining our petition will force the country's politicians openly to discuss an issue that is gathering momentum as Britain bails out failing eurozone states and our laws are increasingly adversely affected by EU human rights restraints. This newspaper's historic crusade - the first to demand that Britain must quit the EU - has already been backed by almost 400,000 people in a postal coupon campaign earlier this year.

Now our readers can force the issue direct to the heart of Government again via the e-petition. Senior Tory ministers and MPs have expressed their support for us in driving the issue of winning freedom from Brussels interference to the forefront of national debate. Mark Reckless, Tory MP for Rochester and Strood, said last night: "I am extremely supportive of the wonderful campaign by the Daily Express which has helped push the debate on to the national stage. I would urge as many people as possible to sign up to this petition so we can push the debate for a referendum into Parliament once and for all."

Another staunch supporter of our crusade, Tory backbencher Douglas Carswell, said: "I for one will be signing up. The Government has said they want more direct democracy and I hope they welcome the Daily Express's efforts to give us a chance to debate whether there should be a referendum on the EU." The eurozone crisis has only heightened the sense of urgency for a referendum that will give people the chance to decide if we are better off out of the EU altogether."

In the past year the UK has stumped up 12.5 billion pounds to help rescue Greece, Ireland and Portugal with bail-outs. As further economic disasters loom in Spain and Italy, the financial noose on Britain from Europe could tighten even further. Opponents of the EU are also angry about the threat to Britain's democracy by meddling Brussels bureaucrats. Critics claim we have lost control of immigration due to EU freedom of movement laws. And they complain that our law and order system - and basic common sense - are being undermined by the European Convention on Human Rights.

The latest chance to push the issue on to the agenda follows a relentless Daily Express crusade urging the UK to cut ties with Brussels. Our battle, launched with an unprecedented 24-page pull-out edition in January, has been backed by hundreds of thousands of people. We were instantly deluged with overflowing mailbags packed with our special coupons CALLING ON DAVID CAMERON'S GOVERNMENT TO LAUNCH AN ORDERLY WITHDRAWAL FROM THE EU.

He suggested the high winds and waves of a recent storm had exhausted the predators, which are normally good swimmers. And in a scientific paper, he and colleagues argued that the increased incidence of storms caused by global warming, and the loss of ice for polar bears to walk on, could lead to more deaths in the future.

While the findings were seized upon by environmentalists as another peril of climate change, sceptics and some other scientists questioned the conclusions. Yesterday it emerged Dr Monnett - who works for the Bureau of Ocean Energy Management, Regulation and Enforcement - has been placed on leave and is being investigated for 'integrity issues' apparently linked to the polar bear report.

Dr David Whitehouse, science adviser to the sceptical Global Warming Policy Foundation, said: 'The dangers of climate science is that once you passionately believe in man-made global warming, you see connections everywhere when you should be scientifically cautious about drawing conclusions.' Dr Monnett is in charge of a 30 million pounds project researching the Arctic's wildlife. A BOEMRE spokesman declined to comment on an 'on-going internal investigation'. The organisation is believed to have barred Dr Monnett from talking to reporters.

In 2008, the US classified the polar bear as a threatened species, the first with its survival at risk due to global warming. Last year scientists working for the UN's Intergovernmental Panel on Climate Change came under fire for exaggerating the threat of global warming. The body falsely claimed Himalayan glaciers would melt by 2035 after lifting claims from an unsubstantiated report written by the green charity WWF.

They are worried the courts' decisions may run against the law of the land, particularly in divorce settlements for women. The scrapping of the inquiry comes in a week when Islamic extremists have launched a campaign to declare 'Sharia-controlled zones' across Britain. Hate preacher Anjem Choudary has claimed responsibility for the scheme, which has so far seen posters put on lampposts in several London boroughs declaring that within the 'zones' there should be 'no gambling', 'no music or concerts', 'no porn or prostitution', 'no drugs or smoking' and 'no alcohol'.

The Daily Mail has previously published photographs of Choudary in his student days breaking all but one of the zone laws - holding a cannabis joint, downing a pint of cider, playing cards and leering at porn. But the abandonment of the Government's Sharia inquiry has fuelled fears that such radicals will be able to continue their intimidating activities unchecked.

The number of Sharia courts here is unknown, although an estimate of 85 made by the Civitas think-tank in 2009 is widely accepted. But the abandonment of the Government's Sharia inquiry has fuelled fears that such radicals will be able to continue their intimidating activities unchecked. The Ministry of Justice had launched an inquiry into the operation of Sharia courts in Britain because of rising fears that the secretive system has undue influence.

The amount of money placed in investment funds by savers has fallen by up to 90 per cent in recent months, figures show, as investor confidence hits lows not seen since the depths of the recession three years ago. Instead, savers are rushing to put their money in perceived "safe havens", with sales of gold funds rising by nearly 60 per cent last week.

Increasingly, people are opting to invest simply in cash, even though rising inflation means that they are effectively losing money. The growing uncertainty in the safety of the stock market came as the FTSE 100 index dropped by one per cent - wiping 15 billion pounds off the value of Britain's most successful companies after poor economic data from the United States. The index has fallen two per cent in the past week.

Such is the growing uncertainty in the markets that Moody's, the credit rating agency, yesterday threatened to downgrade Spain as the eurozone's troubles continue. In Europe, Moody's said it was reviewing Spain's credit rating and would probably downgrade it by one level. Shortly after this warning, the Spanish government called a surprise early election for November.

Turkish President Abdullah Gul moved quickly to appoint General Necdet Ozel as the new army chief. General Ozel is widely expected to be swiftly elevated to chief of the general staff in place of General Kosaner. Tradition dictates that only the head of the army can take over the top job.

There has been a history of tension between the secularist military and the governing AK party, with the two sides engaged in a war of words for the past two years over allegations that parts of the military had been plotting a coup. Investigations into those allegations, known as the "Sledgehammer" conspiracy - appear to be the root cause of today's resignations, says the BBC's correspondent in Istanbul, with the senior military wanting to go ahead with scheduled annual promotions for some of the officers implicated - and the government refusing.

General Kosaner portrayed his resignation as a protest at the jailing of military officers in a variety of court cases. "It has become impossible for me to continue in this high office, because I am unable to fulfil my responsibility to protect the rights of my personnel as the chief of general staff," General Kosaner told the Hurriyet news group.

"It's time for them to tell us what they're for," echoed Boehner, repeating the Republican canard that suggests Obama, who's endorsed Majority Leader Reid's latest bill and put forward a series of proposals himself behind closed doors, has no plan. "It's time to tell us how they're going to get us out of the cul-de-sac they've driven our country into."

The spin session, which came just hours after word leaked that McConnell was turning away overtures from Senate Majority Leader Harry Reid and demanding to negotiate directly with the President, marked an escalation in an already fraught standoff that has the US Treasury preparing drastic measures should the debt ceiling not be raised by Tuesday.

McConnell announced that he had contacted the White House on Saturday and had held initial phone conversations with Vice President Joe Biden, as well as Obama himself. But the Republicans' message seemed more like maneuvering than outreach. "We are now fully engaged... with the one person in America out of 300 million who can sign a bill into law," McConnell said. Boehner made sure to repeat his line about the President driving the country into a cul-de-sac before concluding the brief session with reporters.

The Republican leaders did offer one sunny note. "I'm confident and optimistic we're going to get an agreement in the very near future," McConnell said. But after Saturday's recriminations and delays, that future seems less certain than ever.

Thorbjorn Jagland, a former prime minister of his country, said leaders such as the British premier would be "playing with fire" if they continued to use rhetoric that could be exploited by extremists. Four months ago in Munich, Cameron declared that state multiculturalism had failed in Britain, a view immediately praised by Nick Griffin, leader of the BNP, as "a further huge leap for our ideas into the political mainstream". Marine Le Pen, vice-president of the far-right National Front party in France, also endorsed Cameron's view of multiculturalism, claiming that it corroborated her own party's line.

Jagland's comments come in the wake of the Oslo bomb and the massacre on Utoya Island that left 77 people dead. The killer, Anders Behring Breivik, said he was inspired by the right-wing English Defence League. Breivik sent his manifesto, published online hours before the attacks, to about 250 British members of the BNP, the EDL and the Stop Islamisation of Europe group. Jagland, who is also secretary general of the Council of Europe, told the Observer: "We have to be very careful how we are discussing these issues, what words are used."

"Political leaders have got to defend the fact that society has become more diverse. We have to defend the reality, otherwise we are going to get into a mess. I think political leaders have to send a clear message to embrace it and benefit from it. We should be very cautious now, we should not play with fire. Therefore I think the words we are using are very important because it can lead to much more."

Jagland has also urged leading politicians to change their terminology. He said the word "diversity" was better than multiculturalism because the latter had become defined in different ways by different groups. "We also need to stop using 'Islamic terrorism', which indicates that terrorism is about Islam. We should be saying that terrorism is terrorism and not linked to religion," said Jagland.

This morning the last remnants of the storm passed into Mexico, leaving behind a hot and sunny weekend with only a few scattered showers expected in southern Texas. While it means there was no respite for cattle farmers, who are selling off their livestock because their pastures are barren, it was a huge relief for cotton growers, who are in the middle of this year's harvest.

Yesterday residents along the coast filled up their cars and moved off the islands to take refuge inland, including about 500 students who were evacuated from Texas A&M University-Corpus Christi, which has an island campus. Earlier yesterday, storm preparations in South Texas were light, with some people seeing it as a drill for things to come.

Luis Canales, of McAllen, said: 'In a way, this tropical storm is a pre-test for an actual hurricane. It helps sharpen us up for what we need.' While many people were tying down possessions and preparing for the winds, more were out on the beach, looking forward to the storm waves. But by this morning, Don had fizzled out into a depression. All tropical storm warnings along the Texas coast were lifted at 4am.

Barry Goldsmith, a meteorologist with the National Weather Service, said: 'There's really not much left of it. It's a done deal.'

He added: 'That great beach weather we had last week is coming right back.' Almost all of Texas is in extreme drought, and even Don's projected few inches of rain wouldn't have cured that, but farmers were hoping for at least a few inches. Carlo Cascos, the top elected official in Cameron County, at Texas's southernmost tip, said: 'It was somewhat of a dud. It looked huge and powerful on the radar. We have another one out there that we'll be watching as well.'

Before the storm, Texas State Climatologist John Nielson-Gammon told MSNBC: 'We're looking at five inches of rain, and that is about a month and a half's worth of rain for these areas. Texas has seen the driest nine months in its history, and many areas are 15 inches below where they would usually be this time of year.'