This will push the cost of unleaded petrol up to 1.36 a litre (6.18 pounds a gallon) and diesel up to 1.40 a litre (6.36 pounds a gallon). It means the cost of filling a saloon with a 50-litre tank will soar to about 70 pounds. Only 12 months ago, when petrol was 1.10 a litre, it would have been 56 pounds, marking a rise of 25 per cent.

The gloomy forecast for drivers came as Brent crude oil rose to $98 a barrel on London markets yesterday for the first time in 27 months. Experts said breaking the $100 a barrel threshold is 'imminent' amid growing global demand.

Petrol retailers have written to George Osborne urging the Chancellor to abandon the next automatic 'escalator' rise in fuel duty in his Budget, which will see up to 5p a litre added to the cost of fuel. Combined with predicted oil price increases, motorists and hauliers face a total rise of 8p. The Federation of Small Businesses warned that its members were being 'hard-hit at the most fragile of times' as they struggle in the economic downturn.

Jose Barroso, head of the European Commission, called on EU leaders to boost the firepower of the EU's 440 billion euros (366 billion pounds) bail-out fund and beef up its role, allowing it to intervene with pre-emptive bond purchases to help states under threat. "It is important for the markets to know that Eurozone leaders are committed to do whatever is necessary," he said, hoping for action as soon as early February.

He also proposed a "new phase of European integration" with far-reaching oversight of the budgets, pensions, labour markets, and trade flows of EU states to prevent a recurrence of the imbalances that led to the EMU debt crisis. Mr Barroso said the fund boost was a "precautionary" move, not directed at any one country. The gambit is risky since it may be taken by investors as a sign that Brussels fears imminent contagion to Spain, deemed too big for the current fund.

The response in Paris and Berlin was chilly. "We think the fund is big enough," said Francois Baroin, France's budget minister. German Chancellor Angela Merkel said the bail-out mechanism was "nowhere near exhaustion", adding curtly that she did not wish to debate the matter "any further".

The United States fears that the risk of war is rising between US ally South Korea and the heavily militarized and increasingly unpredictable regime in North Korea, which the Pentagon also considers a looming threat to the mainland United States.

"It's a long-standing principle that every country has the right to protect itself and defend itself against an unprovoked attack," Gates said following discussions with Japanese political leaders keyed to the rising threat of war on the Korean peninsula.

Earlier this week Gates lobbied China to pressure the North not to go too far. Gates will go to South Korea on Friday for a quick and hastily arranged crisis session about the North. Gates was urging patience while China, which props up the fellow communist state, tries to persuade North Korea to avoid a military provocation that South Korea would feel bound to answer.

US government data showing US crude stocks falling for a sixth straight week helped extend this week's gains. Disruptions from Alaska and Norway stoked supply concerns and cold weather in the US Northeast fed demand for heating oil.

Oil's climb back toward $100 a barrel - last touched in October 2008 - has raised concerns about the impact of higher fuel costs on the tenuous economic recovery. "Back in 2008, (US) crude oil only traded above $100 a barrel for about six months before the world economy collapsed into the worst crisis since the 1930s," warned Sabine Schels, commodity strategist for Merrill Lynch.

Crude's rise on Wednesday was part of wider gains across commodities, with metals rising and soybean and corn futures touching 30-month highs that further stoked economic worries.

While officials are drawing comfort from stable rice prices, key for feeding Asia, they warn that a sustained period of high prices, especially in grains such as wheat, would hit poorer countries. Food price hikes have already led to riots in Algeria and Mozambique.

"Stocks of corn and soyabean are at incredibly tight levels... and the markets are surging to incredibly strong prices," Chad Hart, agricultural economist at Iowa State University, said. Dan Basse, president of AgResource, a Chicago-based forecaster, added: "There's just no room for error any more. With any kind of weather problem in the upcoming growing season we will make new all-time highs in corn and soy, and to a lesser degree wheat futures."

Agricultural traders and analysts warn that the latest revision to US and global stocks means there is no further room for weather problems. The crops in Argentina and Brazil, to be harvested soon, look fragile due to dryness.

Traders are particularly concerned about the cost of vegetable oil, key for developing countries such as China where an emerging middle class is buying more frying oil. The US Department of Agriculture said the ratio of global stocks-to-demand would fall later this year to "levels unseen since the mid-1970s, reflecting an accelerated pace of vegetable oil" consumption for food and fuel.

At least three firefighters were among 107 people killed in mudslides in Nova Friburgo. Brazil has seen severe flooding this year, leaving thousands homeless. The death toll has been steadily climbing as rescuers reached remote villages in the mountains, some of which have been destroyed.

A state of emergency has been declared in Teresopolis, 100km (62 miles) north of Rio Janeiro, where more than 1,000 people have been left homeless. Another 20 people died in the nearby town of Petropolis. With many people still reported missing it is feared the death toll could rise even further and there is concern about water-borne diseases.

Earlier this week, torrential rains in neighbouring Sao Paulo state left 13 people dead and brought traffic chaos to Brazil's biggest city. In Teresopolis, a river burst its banks, submerging buildings, while the rainfall set off several mudslides. "It's a huge catastrophe, a major disaster," Teresopolis Mayor Jorge Mario told Globo television. TV footage showed homes destroyed and cars submerged

The 50-page analysis of 37 global risks precedes the World Economic Forum's (WEF) annual meeting in two weeks' time in the Swiss ski resort of Davos, which brings together high-level politicians, central bankers and business leaders. "The world is probably more vulnerable to future shocks than it ever has been in the last half century," WEF Chief Business Officer Robert Greenhill told reporters at a briefing in London.

"The response to the financial crisis has drained national treasuries and drained household incomes, but the underlying risks still remain." Debt was also highlighted as a top threat in the WEF report last year, and Greece's meltdown went on to overshadow the 2010 Davos meeting. Since last January, the euro zone's crisis has spread to Ireland, which has also been bailed out, and now threatens to engulf Portugal and possibly Spain - the euro zone's fourth largest economy - as investors worry about governments' ability to repay debts and the risk of write-downs for bondholders.

There will also be a greater focus than ever in Davos on the mismatch between buoyant economic growth in emerging markets and sluggish conditions in the developed world. Such imbalances increase the risk of protectionism and currency wars as 'hot' capital surges into emerging economies.

Other threats in 2011 include tightening supplies of basic resources such as food, water and energy, which John Drzik, chief executive of management consultancy Oliver Wyman, said were aggravated by lack of investment in infrastructure because of chronic fiscal deficits.

Surging global food prices have already set warning lights flashing on inflation. Food prices hit a record high last month, according to the United Nations food agency, surpassing levels in 2008 that sparked riots in countries from Egypt to Haiti. "We're entering a new age of commodity price volatility," Drzik said. "It is not just a near term issue."

The tribunal is widely expected to name members of Hezbollah in upcoming indictments, which many fear could re-ignite sectarian tensions that have plagued the tiny country for decades. "This cabinet has become a burden on the Lebanese, unable to do its work," Energy Minister Jibran Bassil said at a news conference announcing the resignations, flanked by the other ministers who are stepping down. "We are giving a chance for another government to take over."

Hezbollah, which is backed by Iran and Syria, has denounced the tribunal as an "Israeli project" and urged Western-backed Prime Minister Saad Hariri - the son of the slain politician - to reject any findings by the court even before it announced any indictments. The walkout followed the failure of a diplomatic push by Syria and Saudi Arabia to ease political tensions in Lebanon. There had been few details about the direction of the Syrian-Saudi initiative, but the talks were lauded as a potential Arab breakthrough, rather than a solution offered by Western powers.

Violence has been a major concern as tensions rise in Lebanon, where Shiites, Sunnis and Christians each make up about a third of the country's four million people. In 2008, sectarian clashes killed 81 people and nearly plunged Lebanon into another civil war. Rafik Hariri's assassination in a suicide bombing that killed 22 other people both stunned and polarized Lebanese. He was a Sunni who was a hero to his own community and backed by many Christians who sympathized with his efforts in the last few months of his life to reduce Syrian influence in the country.

A string of assassinations of anti-Syrian politicians and public figures followed, which UN investigators have said may have been connected to the Hariri killing. The Netherlands-based tribunal has not said who it will indict, but Hezbollah leader Sheik Hassan Nasrallah has said he has information that members of his group will be named.

Mr Griffiths predicted that gold's 10-year bull run would continue and even intensify. "Although it's been a top performer for each of the last 10 years, it's still in a linear trend," he said. "Eventually it will go exponential and make more in the last little bit than the whole of the 10-year trend."

He said investors should regard any short-term falls in the gold price as a buying opportunity, adding that gold was still not an "over-owned trade". His comments come against the background of the US Federal Reserve's huge monetary stimulus from quantitative easing, which many believe will result in inflation and a fall in the value of the dollar.

"The downward trend in the dollar is awesomely powerful," Mr Griffiths said. "It's vital to get yourself out of the dollar long-term on any significant rally. Continuing to own a currency that is going to be printed virtually into oblivion - that's the official policy - is crazy." He added: "Real assets hedge paper money being printed into oblivion, so you've got to own gold and you've got to own other commodity-related investments still."

Cairo's dramatic reaction came amid reports of a further attack in Egypt in which a Christian died. The interior ministry said an off-duty policeman boarded a train in southern Egypt and opened fire, killing a 71-year-old man and wounding five other Christians, including the dead man's wife. The attack raises fears of a new wave of rioting by Christians still mourning the deaths of at least 21 worshippers as they were leaving mass at a Coptic church in Alexandria on New Year's Eve.

In a statement, a spokesman for the foreign ministry said Cairo's ambassador had been called back for consultations "after the Vatican's new statements that touch on Egyptian affairs and which Egypt considers an unacceptable interference in its internal affairs". In a speech to diplomats accredited to the Holy See on Monday, the pope said the Alexandria bombing, coming after a string of attacks in Iraq, showed "the urgent need for the governments of the region to adopt, in spite of difficulties and dangers, effective measures for the protection of religious minorities".

Quoting from a message agreed by a synod of bishops last year that discussed the situation of Christians in the Middle East, the pope said they were loyal citizens who were entitled to "enjoy all the rights of citizenship, freedom of conscience, freedom of worship and freedom in education, teaching and the use of the mass media". He also praised European countries who had asked for action by the European Union to protect Middle Eastern Christians.

Where will the euro crisis lead us next? Will Portugal really be the next euro-zone country to ask for help from the European Union's rescue fund? It would appear that the majority of investors are expecting it to. What's more, German banking executives even go one step farther: According to a recent survey of executives at 120 banks in Germany conducted by the management consulting firm Ernst & Young, almost half of them predict that at least one euro-zone country will go bust. Indeed, when asked whether they currently expected to see a sovereign debtor in Europe default, 47 percent of those questioned answered "yes."

Still, only a quarter of them said that they expected possible defaults to negatively affect their companies. Claus-Peter Wagner, the head of the financial services division of Ernst & Young's branch in Germany, said that: "The vast majority of surveyed institutions hold either no or very few bonds of the shaky countries and, consequently, do not have to fear any direct losses." Wagner also added that measures recently taken by the European Central Bank (ECB) to stabilize the bonds of weak euro-zone countries had been successful.

Nevertheless, Wagner did warn that there would be catastrophic consequences if one of these countries actually did become insolvent. "If some of the major banking houses are forced to make massive write-offs," Wagner said, "it would lead to renewed turbulence in the entire global securities market."

They are buying hundreds of billions of dollars of United States Treasury securities on the open market in a controversial attempt to keep interest rates low and, in the process, revive the economy. To critics, it is a Hail Mary play - an admission that the economy's persistent weakness has all but exhausted the central bank's powers and tested the limits of its policy making. Around the world, some warn the unusual strategy will weaken the dollar and lead to crippling inflation.

But inside the Operations Room, on the ninth floor of the New York Fed's fortresslike headquarters, there is no time for second-guessing. Here the second round of what is known as quantitative easing - QE2, as it is called on Wall Street - is being put into practice almost daily by the central bank's powerful New York arm.

Each morning Mr Frost and his team face a formidable task: they must try to buy Treasuries at the best possible price from the savviest bond traders in the business. As offers to sell Treasuries flash on a bank of trading screens, a computer algorithm works out which ones to accept. The computer compares the offers from Wall Street against market prices and the Fed's own calculation of what constitutes a "fair value" price.

"Rates have risen for the reasons we were hoping for: investors are more optimistic about the recovery," said Mr Sack. "It is a good sign."

The government has estimated the cost of the damage at more than $20 million (12.8 million pounds); new heavy downpours are due over Bicol and the Eastern Visayas. The National Disaster Risk Reduction and Management Council said many more people were missing after being swept away by floods or buried by landslides.

Their latest bulletin said that soldiers and government personnel were evacuating more people in Samar and nearby Leyte island. Floods overflowed bridges, damaged hundreds of homes, wrecked communication lines and blocked highways. The disaster council bulletin said that the rains - which became heavy at the start of the year - have affected 1.29 million people across 144 towns.

It said a total of 338,000 people had fled their homes or are receiving government food aid since then; many have since gone home. About 25,000 people are currently in evacuation centres, officials said, mostly in the Albay province of the central Bicol region. The affected regions run from Southern Luzon, Bicol, Central and Eastern Visayas and Caraga to the Autonomous Region in Muslim Mindanao in the south.

But the head teacher did not authorise the sledging session - and he was sacked from his £40,000-a-year job as head of technology. Mr Tremelling appeared before a General Teaching Council for Wales disciplinary hearing yesterday where he could be struck off the teaching register. Rosa Fernandez, presenting the case, said: "Mr Tremelling took the sledge to school without the authorisation of the head teacher. He used the sledge on snow covered slopes at the rear of the school and allowed two pupils to use it. He failed to carry out appropriate risk assessments and failed to provide a written risk assessment. He didn't ensure pupils were wearing protective headgear and protective clothing." The two year 11 pupils - both boys - were unharmed in the 10-minutes sledging demonstration at the Eastside school.

Mr Tremelling was dismissed following the sledge lesson after a snowfall in February 2009. He denies unacceptable professional conduct. The hearing in Cardiff continues.

In regard to international organizations, the Holy See is present in the United Nations as an observer state. Moreover, it is a member of seven organizations and agencies of the UN system, an observer in eight others and member or observer in five regional organizations.

From the point of view of bilateral relations, 2010 was a fruitful year, the communique reported.

On April 6 the Holy See signed an agreement with the German state of Lower Saxony, which modified article 6 of the addendum to the 1965 Accord and regulates the juridical position of some Catholic schools run by the Dioceses of Hildesheim, Osnabruck and Munster. The exchange of instruments of ratification of this agreement took place on June 28.

On April 8 in Sarajevo an agreement was signed between the Holy See and Bosnia and Herzegovina regarding religious assistance to Catholic faithful who are members of the Armed Forces of that country. The exchange of instruments of ratification of the agreement took place in the Vatican on September 14. The communique concluded with the note that last year in three African countries - Chad, Malawi and Gabon - the presence of the diplomatic representation of the Holy See was stabilized.