The Tories have traditionally taken a sceptical approach to so- called 'Frankenstein foods', and at present no GM varieties are cultivated commercially in the UK. Labour ministers shied away from promoting GM foods in recent years over concerns about a public backlash.

But Mrs Spelman insisted last night they could bring 'benefits to food in the marketplace'. Her intervention drew fierce criticism from anti-GM campaigners, who accused her of getting her facts wrong and highlighted her background as a lobbyist for biotechnology.

Mrs Spelman set up a food and biotechnology lobbying company Spelman, Cormack and Associates with her husband, Mark Spelman, in 1989. Although she resigned as a company director last year, the firm remains in the hands of her husband.

Paul Flynn, the Labour MP charged with investigating the handling of the swine flu outbreak for the Council of Europe, described it as 'a pandemic that never really was'. The report accuses the World Health Organisation of grave shortcomings in the transparency of the process that led to its warning last year.

The MP said that the world relied on the WHO, but after 'crying wolf', its reputation was in jeopardy. The report questions whether the pandemic was driven by drug companies seeking a profit. Mr Flynn said predictions of a 'plague' that would wipe out up to 7.5 million people proved to be 'an exaggeration', with fewer than 20,000 deaths worldwide.

Pharmaceutical companies, however, profited to the tune of 4.6 billion pounds from the sale of vaccines alone. Mr Flynn said: 'There is not much doubt that this was an exaggeration on stilts. They vastly over-stated the danger on bad science and the national governments were in a position where they had to take action. In Britain, we have spent at least 1 billion pounds on preparations, to the detriment of other parts of the health system. This is a monumental failure on the WHO's part.'

There is no suggestion that he acted improperly or had prior knowledge that the company was to face the biggest setback in its history. His decision, however, means he avoided losing more than 423,000 pounds when BP's share price plunged after the oil spill began six weeks ago.

Since he disposed of 223,288 shares on March 17, the company's share price has fallen by 30 per cent. About 40 billion pounds has been wiped off its total value. The fall has caused pain not just for BP shareholders, but also for millions of company pension funds and small investors who have money held in tracker funds. The spill, which has still not been stemmed, has caused a serious environmental crisis and is estimated to cost BP up to 40 billion pounds to clean up.

The crisis has enraged US politicians, with President Obama yesterday forced to cancel a trip to Indonesia amid a row over the White House's response. Mr Hayward, whose position is thought to be under threat, risked further fury by continuing plans to pay out a dividend to investors next month.

Asked by Rabbi David Nesenoff of RabbiLive.com if she had "any comments on Israel," Thomas replied, "Tell them to get the hell out of Palestine." Thomas went on to say that the Palestinian people "are occupied and it's their land" and that Israelis should "go home" - to Poland, Germany, America "and everywhere else."

In a written statement issued Friday, Thomas apologized, saying, "I deeply regret my comments I made last week regarding the Israelis and the Palestinians." She said the comments "do not reflect" her "heart-felt belief that peace will come to the Middle East only when all parties recognize the need for mutual respect and tolerance."

"May that day come soon," she added.

Erdogan reportedly said Hamas, the legitimate winner of the Palestinian elections, was fighting for its land. "You are always talking about democracy. You'll never let Hamas rule. What kind of democracy is this?" he reportedly said, apparently addressing the Israeli leadership.

In his speech, Erdogan also slammed Turkish media reports which were critical of his party's support of Hamas, saying the "columnists" had a slanted view of the events. Earlier on Friday, Turkey's deputy prime minister said his country would work to reduce its military and economic cooperation with Israel. Existing contracts, he said, would be reviewed and reworked or canceled

Hungary's bonds fell after a spokesman for Prime Minister Viktor Orban said talk of a default is "not an exaggeration" because a previous administration "manipulated" figures. The country was bailed out with a 20 billion-euro ($24 billion) aid package from the European Union and International Monetary Fund in 2008.

"The comments out of Hungary have really spooked the market," said Rajeev Shah, a credit strategist at BNP Paribas SA in London. "Investors are interpreting it as a bad sign for trying to tackle Europe's debt crisis." The euro dropped below $1.21 for the first time since April 2006, stocks tumbled and the cost of insuring against corporate default rose on speculation Hungary will weaken the EU's willingness to rescue the region's indebted nations.

"Are we on the brink of something more serious?" Deutsche Bank AG strategist Jim Reid wrote in a note to clients today. "We've little doubt that the authorities have no appetite for imminent peripheral defaults but we do see the situation getting worse before it gets better. This leaves markets vulnerable until there is more certainty surrounding the structure of the peripheral funding bail-out."

The euro sank, with traders citing official comments on Hungary's woes and rumors of derivative problems at Societe Generale. "We won't comment on market rumors," a spokeswoman for France's third-largest bank said, adding, "if we had something to say, we would have said it." Its stock fell 7.6%.

HSBC Bank caused jitters with a research note to clients in which it downgraded Europe excluding the UK to "underweight" from "neutral."

The Hungarian prime minister's spokesman declined to comment on remarks by Lajos Kosa, managing vice president of Hungary's ruling Fidesz party, that Hungary is facing a Greece-like sovereign-debt crisis and will need crisis-management measures. But the spokesman, Peter Szijjarto, said the new government won't let the country's economy go the same way as Greece.

"The purpose is they really want a bomb. That is their main objective," said defector Sai Thein Win, the major who says he visited the installations and attended meetings at which the new technology was demonstrated.

A US senator on Thursday postponed a trip to Myanmar, saying it is a bad time to visit because of new allegations that its military regime is collaborating with North Korea to develop a nuclear program.

Myanmar's military regime is under economic and political sanctions by many Western nations because of its poor record on human rights and its failure to hand over power to a democratically elected government. The leader of the pro-democracy opposition, Nobel peace laureate Aung San Suu Kyi, has been detained for about 14 of the past 20 years.

Business representatives confirm that German industry, which exports heavily to other countries within the Euro zone, has up to now greatly benefited from the common currency. If an austerity program can be successfully imposed on Southern Europe, establishing a pan-European economic "model" patterned on Germany, the Euro will remain advantageous for Germany. But strong resistance is expected from Greece and other countries.

If expensive transfer payments cannot be avoided, it may become necessary "to think the unthinkable" of Germany "leaving the monetary union" writes the business press. In the long run, Germany's withdrawal from the Euro zone is, in fact, highly probable, the Swedish economics scholar Stefan de Vylder tells german-foreign-policy.com. The first insinuations about the probable consequences indicate that serious tensions can be expected in Europe.

He did not specify whether he wanted the rebate scrapped, but Britain's European neighbours, notably the French, have long clamoured for that. The comments provoked fury from Eurosceptic MPs, who accused the EU of 'squandering' hefty British contributions but providing nothing in return.

They also provide an early test of Prime Minister David Cameron's promise to defend Britain's interests in Europe. Protection of the rebate was made a cornerstone of British policy in Europe after Baroness Thatcher fought to secure it 26 years ago. It was seen as compensation for the disproportionate amounts demanded from UK taxpayers for CAP, which benefits British farmers to a much less extent than their French and German counterparts.

Tony Blair's government was widely condemned for giving up part of the rebate in 2005. Treasury papers revealed last year that this concession will have cost British taxpayers 9.3 billion pounds between 2007 and 2013 - the equivalent of 344 pounds for every household. As a consequence, the value of the rebate to Britain from the EU fell from 5.6 billion pounds in 2008/09 to 5.1 billion pounds in 2009/10. The rebate will produce only 3.3 billion pounds for 2010/11, driving up the UK's net payments to Europe from 4.8 billion pounds last year to 6 billion pounds.

Fitch said its downgrade to AA from AA+, with outlook negative, "reflects risks to both BP's business and financial profile", reversing an earlier view that the spill would have little impact. Moody's also cut the group's ratings to Aa2 from Aa1, while Standard & Poor's said it is reviewing ratings on 35 oil companies in the Gulf of Mexico.

In a separate blow to the oil giant, BP's Russian joint venture on Thursday gave up a 10-year struggle to develop one of the world's biggest, most gas-rich fields.

TNK-BP, the Russian joint venture 50 per cent owned by BP, put one of its units into bankruptcy proceedings, meaning the giant Kovytka field will be sold off to the highest bidder. The sale will realise cash for TNK-BP - after its attempts at developing Kovytka were repeatedly stymied by the Russia government.

BP produces a quarter of its oil and gas from Russia and a quarter from the Gulf of Mexico. In a sign that BP's problems are becoming an increasingly political issue, BP executives met Charles Hendry, Britain's new energy minister on Thursday. BP was the UK's biggest company before it lost a third of its value following the accident that killed 11 men last month.

The figures showed that there was a 22.4 per cent drop in the number of passengers on services to and from the Asia-Pacific region. However, there was only an 8.5 per cent reduction in passengers on North and South American routes. The figures produced by the airline covering May included 14 days of industrial action which, BA estimates, cost it 98 million pounds. BA admitted that the full financial impact of the stoppages, taking into account lost bookings, will only become clear once the dispute is over.

However the group said that an increasing number of cabin crew were defying the strike call by the Unite trade union, which meant it was able to operate four out of five longhaul services including all flights to and from JFK. In addition all services to South Africa will run, ensuring that fans attending the World Cup will face no disruption.

However, a Unite spokesman insisted that the wave of strikes was hitting BA hard in the pocket. "It's costing BA a fortune. It was never our intention to hurt passengers but to cause BA enough damage that the airline would address our concerns."

The string of emergency rescues led by global central banks was certainly popular among the banks - hardly surprising considering their continued existence was at stake. But now, bankers are bemoaning the very deficits incurred by various national governments in part because of financial sector bailouts. They worry all of the commitments made in Europe and the United States might have put governments - and perhaps even the central banks themselves - on the path to insolvency.

Of course, central banks can't really become insolvent in a strict sense, since they can always print money. The anxiety then becomes the ability of the monetary authorities to tighten their purse strings in time to prevent spikes in inflation and interest rates. Central banks can extend unlimited amounts of credit to banks and governments. But they do so by issuing ever more of their own liabilities - money. And just as the trust in banks' and governments' liabilities eroded when they issued ever more, we believe that the trust in money will erode if central banks issue ever more of it.

Greek militant groups have also detonated bombs, one of which killed an Afghan youth and another targeting the bourse. Analysts say in southern Europe in particular, street protests are likely to recur periodically, but the main concern is whether governments rethink austerity measures as a result.

"There are going to be protests and people are going to try to torch banks from time to time," said Eurasia Group analyst Jon Levy. "It is going to be occasional and far from the sort of thing that will bring society crashing down. But it will get a lot of media coverage and that means it may well have market impact." The violence in early May hit Greek assets, the euro and broader global markets as 24-hour news channels focused on Greece and investors worried the backlash might prompt the government to backtrack on vital reforms.

Insurers say they have seen a notable uptick in enquiries about political risk cover - which protects against expropriation, political violence and exchange controls - particularly for Portugal and Spain as they face stringent cuts. "The main risk is going to be in capital city centers where you have a risk of protest," said Daniel Riordan, head of political risk at insurers Zurich. Overall, most analysts say Italy has probably the greatest risk of violent unrest along with France.

Speaking before two days of talks bringing together the world's top 20 developed and emerging economies, South African Planning Minister Trevor Manuel said he could not think of a more challenging time than the present for the Group of 20. The meeting of G20 finance ministers and central bank governors was an opportunity to take decisions to banish the specter of a double-dip recession, Manuel said. "It's important that we all understand just how fragile the recovery is," he told reporters in this southern port city.

Police boats patrolled near the beach hotel where the meetings are taking place. Authorities have stepped up security in the city in the face of the some of the most war-like rhetoric on the divided peninsula after the South accused North Korea of sinking one of its warships.

As well as a 110 billion euro bailout for Greece, the 16-member euro zone is slinging a financial safety net under other heavily indebted countries that use the single currency. Together with money from the International Monetary Fund, the support could total 750 billion euros ($910 billion).

Investors first responded enthusiastically to the rescue package, but the euro has since slumped on concern about the ability not only of Greece, but also countries such as Portugal and Spain, to plug holes in their budgets. "I don't think the Greece problem is over yet. We are not out of the woods," Youssef Boutros-Ghali, Egypt's finance minister, told Reuters.