And it coincides with a rebellion on the Tory backbenches, expected tonight, over controversial changes to the Lisbon Treaty - signed up to by Mr Cameron. The European Court of Auditors yesterday challenged the EU to get a grip on its spending after finding 'material errors' in last year's 88 billion pounds budget. Its president, Vitor Manuel da Silva Caldeira, said about 5 per cent of the budget - some 4 billion pounds - was spent wrongly.

The biggest examples of waste were in agriculture, development aid and fisheries. Auditors found that EU farm subsidies had been handed over to subsidise crops without any proof they were being grown. They visited farmland and found no evidence of cultivation at all. Stephen Booth, analyst at the Open Europe think tank, said: 'This is a hugely embarrassing annual tradition and it remains absolutely unacceptable.'

Deputies drafting a final statement to be released after the Group of 20 summit concludes on Friday remained far apart on pivotal issues, including currency exchange rates, G20 spokesman Kim Yoon Kyung said on Wednesday. "We had to open the door because the debate was so animated and the room was getting hot," he said.

G20 leaders had hoped this week's gathering, the fifth since the financial crisis exploded in 2008, would mark the beginning of a new era of global cooperation. Hosts South Korea printed banners proclaiming a slogan of "Shared Growth Beyond Crisis." But the unity forged in crisis has given way to sometimes-competing national policies that reflect a multi-speed recovery from the recession, prompting critics to question the effectiveness of the G20 grouping itself.

The US Federal Reserve's decision last week to spend another $600 billion on government bond purchases has drawn reproaches from four continents and intensified the G20 debate over how best to bolster the global economic recovery and avoid another financial crisis. Critics charge that the Fed ignored global repercussions - namely a weaker dollar and a flood of cheap cash that could find its way into emerging markets - and violated the cooperative spirit the G20 has worked hard to sustain.

Kim, the G20 spokesman, said 40 to 50 deputies were crammed into a small room for a 14-hour session on Tuesday, and voices were raised when they discussed a framework for balanced growth that G20 leaders hope will be a cornerstone of the summit.

The nonpartisan Legislative Analyst's Office, in a recent report titled "California's Other Budget Deficit," said the state will probably need to raise unemployment taxes on employers as well as reduce benefits to bring the fund back in balance.

But pressure is growing on Sacramento to fix the system soon - whether it wants to or not. California has borrowed about $8.5 billion from the federal government to keep benefits flowing, and the repayment obligations are coming due.

"The longer we go without a fix, the bigger the hole becomes," said Loree Levy, a spokeswoman for the Employment Development Department, which doles out the benefits. She said the US government is scheduled to bill the state about $362 million in interest next year. The Legislature would have to find the money somewhere to pay it; it wouldn't be allowed to dip into the unemployment fund, she said.

Obama's caution came as the Israeli government moved ahead with plans to build nearly 1,300 apartments in that disputed part of the city. Israel has said the plans to seek public comment on the building plans were merely procedural. But the move comes on the heels of Israeli Prime Minister Benjamin Netanyahu's meeting with Vice President Joe Biden on Sunday.

The 'New York Times' reports:- A few hours later, Mr Netanyahu's office responded with a statement, saying that "Jerusalem is not a settlement; Jerusalem is the capital of the State of Israel."

Mr Netanyahu was in New York, meeting business people, midway through a visit to the United States that included a speech to a Jewish group in New Orleans on Monday, in which he called on Washington to be more aggressive in threatening Iran with a military strike if it did not give up its nuclear program.

Mr Obama returned fire in the growing confrontation over trade and currencies Monday in a joint news conference with Indian Prime Minister Manmohan Singh, taking the unusual step of publicly backing the Fed's decision to buy $600 billion in US Treasury bonds - a move that has come under withering international criticism for weakening the US dollar.

The Fed is independent, and the White House by longstanding tradition has strained to avoid any appearance of collusion or conflict. Mr Obama said the administration doesn't comment on particular actions of the US central bank, before adding: "I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole."

The G-20 summit that begins Wednesday night in Seoul is shaping up as a showdown between exporting powers, such as Germany and China, and nations such as the US that are struggling to emerge from recession and high unemployment.

Ahead of the meeting, tensions have flared in particular between German and US officials. US Treasury Secretary Timothy Geithner has been pressing member nations to sign up for a framework that would set limits on countries' trade balances. Germany, which relies heavily on exports, has lectured Washington about its economic policies, which Berlin sees as profligate and damaging.

Already, expectations are low for the meeting. The G-20 is struggling to agree on specific targets for Mr Geithner's trade regime. It's also likely to leave unresolved other big questions, such as how to unwind failing international financial institutions, a task made urgent by the recent financial crisis.

German Finance Minister Wolfgang Schauble lashed out at US pressure on Berlin to rein in the country's surging exports, telling Der Spiegel magazine, "The American growth model... is stuck in a deep crisis." He said, "It doesn't add up when the Americans accuse the Chinese of currency manipulation and then, with the help of their central bank's printing presses, artificially lower the value of the dollar."

The Convention and Exhibition Center in southern Seoul, which is hosting the event, will use the fish to check the purity of the water supply to restrooms. "The fish also symbolize an eco-friendly water policy, which recycles used water for the restrooms," Oh Su-Young, PR manager at the center, told AFP, adding that they were just part of the inspection process.

The center, which shares its water supply with a neighboring shopping mall and trade center, recycles more than 37 million gallons (142,000 cubic meters) a year at an annual saving of 360 million won (US$322,436).

"The combined production shortfalls and dramatic potential stock drawdowns mean a much tighter supply picture than just a few months ago," the agency said in a separate grains report. Benchmark Chicago corn futures soared above $6 a bushel for the first time since August 2008, before ending lower. Soyabeans rose 4.3 per cent and New York cotton futures posted a record above $1.51 a pound. The price rises have revived fears of a repeat of the global food crisis of 2007-08.

In Europe, milling wheat surpassed a peak reached after Russia banned grain exports in August in response to a devastating drought. Abdolreza Abbassian, senior grains economist at the UN's Food and Agriculture Organisation in Rome, said the report was "alarming".

"It reiterates the tightening of the overall situation as we go into 2011, which means eventually even those basic food commodities that haven't risen so much could be influenced," he said. The FAO food price index is nearing the highs set in mid-2008.

The video shows an enormous condensation trail following a brightly lit object, similar to images seen during a space launch. Colonel Dave Lapan, a Pentagon spokesman, told reporters the video is so far "unexplained" by anyone in the US Military. The Missile Defense Agency told Fox News it did not launch any test missile last night that could explain the dramatic images. The Navy and the Air Force were also unable to offer an explanation.

"It does not appear that this was a regularly scheduled missile test", Lapan said. Before a missile test the military sends notifications to mariners, airmen, and air traffic controllers to stay clear of the area, and according to Lapan it doesn't appear those warnings were sent. The FAA told Fox News it did not issue any license for a commercial launch. NASA also denied any involvement and said it is checking for any meteorite activity, although it's highly unlikely that is the source of these images.

John Cornelio, a spokesman for Northern Command and NORAD (North American Aerospace Defense Command) told Fox News Tuesday there is no threat to the homeland. "We are very confident this was not fired from a foreign military," Cornelio said. "That's not what we are working with." Cornelio also cautioned the use of the term missile, saying that word suggests the launch of a weapon, which can't be confirmed. "If it was an attack we would have known it and we would have done something about it," Cornelio said.

Dramatic distortions are now looming in the post-crisis global economy. The current global economic order threatens to fall into disarray in several different areas:

* In the wake of the economic and financial crisis, many countries have begun to seal off their markets against foreign products in order to protect domestic producers.

* Two of the world's largest economic powers, China and the United States, seem to be initiating a race to devalue their respective currencies.

* Key emerging economies, most notably Brazil and Indonesia, are imposing restrictions on the movement of capital, which could disrupt the global money cycle.

* In desperation over the grim economic situation, the administration of US President Barack Obama is embarking on a diplomatic offensive intended to pillory countries with chronic trade surpluses. This puts China, Japan and Germany in the line of fire.

Each individual development is cause for concern on its own. But together, they constitute a serious threat to the world economy. The German business model, which builds on the success of the country's export economy, is particularly at risk. Much is at stake for Germany, which is currently experiencing an unexpected employment and growth spurt, due in large part to the substantial competitiveness of its companies in global markets. The German economy is expected to grow by about 3.5 percent this year, perhaps even more.

This success has sparked resentment, particularly among countries that are having a hard time pulling themselves out of the crisis, most of all the United States. The German government is not prepared to bow to the will of the battered hegemon. "The proposal is not acceptable for Germany under any circumstances," German Finance Minister Schauble said in a Spiegel interview. His ministry's policy is clear: "We reject non-cooperative solutions."

The biotech start-up's ingestible chips are activated by stomach acid and send information to a small patch worn on the patient's skin, which can transmit data to a smartphone or send it over the Internet to a doctor. Mundel said the initial project was focused on ensuring that patients took drugs at the right time and got the dose they needed - a key issue for people after kidney and other transplant operations, when treatment frequently needs adjustment.

Longer-term, he hopes to expand the "smart pill" concept to other types of medicine and use the wealth of biometric information the Proteus chip can collect, from heart rate and temperature to body movement, to check that drugs are working properly. Because the tiny chips are added to existing drugs, Novartis does not expect to have to conduct full-scale clinical trials to prove the new products work. Instead, it aims to do so-called bioequivalence tests to show they are the same as the original.

A bigger issue may be what checks should be put in place to protect patients' personal medical data as it is transmitted from inside their bodies by wireless and Bluetooth. "The regulators all like the concept and have been very encouraging. But... they want to understand how we are going to solve the data privacy issues," Mundel said.

He said: 'If Costa Coffee, every time you went to a branch, did something different and you didn't know what the product was, they would go out of business. We have got to the stage now in the Church of England where there are so many different products that you don't know what you're going to get.'

Mr Newton, Bishop of Richborough, said his difficulties with the CofE went further than the ordination of women.

'There has been a more lax attitude towards moral issues. The whole question of blessing gay marriage - there is a lot of pressure for that to happen in the Church of England - abortion, and life and death issues.'

The collisions, officially started at 10.20am today, were produced by firing lead ions - atoms stripped of their electrons - at 0.9999 the speed of light - 670 million miles per hour - in opposite directions around the LHC's underground tunnel at CERN, the European Organization for Nuclear Research, near Geneva.

Flying in opposite directions, the particles were focused into a narrow beam and forced to collide inside the massive ALICE (A Large Ion Collider Experiment) detector. The impacts threw off thousands of particles and generated temperatures of 10 trillion degrees centigrade, as close as we have ever been to reproducing conditions not seen since the Big Bang 13.75 billion years ago. They were 13 times more powerful than the previous record for ion collisions.

Scientists hope the quark-gluon plasma will allow them to learn more about the Strong Force, one of the four fundamental forces of nature. "The Strong Force not only binds the nuclei of atoms together but is responsible for 98 per cent of their mass," said Dr Evans. "I now look forward to studying a tiny piece of what the Universe was made of just a millionth of a second after the Big Bang."

If you think this a stretch, just take a look at the equivalent figure for the world economy as a whole. According to the Bank of England's last Financial Stability Report, there is approximately $5 trillion (3 trillion pounds) of refinancing to be done by major banks around the world over the next three years.

Banks in Greece, Portugal and Ireland again find markets for all but very short term funding effectively closed to them. What chance do UK banks have of raising the necessary amid such humongous global competition? Currency wars will dominate debate when political leaders meet for the G20 summit in Seoul at the weekend, but this fast approaching funding gap is in fact of much more immediate threat to the financial system than the re-emergence of global trade imbalances.

Property-related borrowing and lending between financial institutions helped the collected debt of households, businesses and government balloon from roughly twice gross domestic product (GDP) in 1987 to around 5.4 times by 2009, when total debt stood at 7.5 trillion pounds, according to the report.

Despite government austerity measures, the firm's latest economic outlook sees the UK's debt to GDP ratio sticking near historic highs as borrowing hits 10.2 trillion pounds by 2015. But if the economy does not perform as well as expected, one plausible alternative scenario could still see the debt burden soar as high as 5.8 times of GDP, the report said.

Deleveraging will go well beyond the immediate challenge of getting public finances under control, PwC warned. The increased burden has so far been supported by low interest rates, but these are likely to rise "significantly" over the next five years, said PwC. The firm believes interest rates on mortgages may end up higher than before the recession, as tougher regulation pushes up lenders' costs.

The projections will stoke fears for households kept afloat by near-zero rates. "The UK's addiction to debt has reached alarming levels during the past decade," said John Hawksworth, chief economist at PwC. He added: "Either way, deleveraging will be a painful process for the UK."

A combination of issues have created fresh worry among investors: Ireland's debt difficulties and two key global summits where leaders of major industrial and developing nations are discussing currencies, free trade and ways to help the world economy.

Also in the back of investors' minds is the prospect of inflation stemming the Federal Reserve's multi-billion bond-buying program. "People are really concerned again and so I think we're seeing safe-haven buying," IG Markets Inc CEO Dan Cook said.

Oil prices settled at a high for the year while most of the other energy contracts also rose. Benchmark oil for December delivery settled up 21 cents at $87.06 a barrel on the New York Mercantile Exchange. Analysts think oil prices could climb to $90 a barrel by the end of the year.

Grains and beans were mixed ahead of Tuesday's US Agriculture Department report updating global supply and demand estimates of major crops. December wheat added 7.5 cents to settle $7.3625 a bushel, December corn gained 11.5 cents to $5.9925 a bushel.