The carrier has sought court protection from its creditors, effectively declaring itself insolvent. An administrator will be appointed to handle the process, with flights continuing while the firm plans a radical overhaul of its operations. Losing 2m euros (£1.6m) a day, Alitalia has survived on a 300m-euro state loan. Plans are being drawn up to split the carrier into two and to sell a stake in a new entity to a foreign airline.

Guaranteeing the airline's future will depend on securing fresh investment and persuading its unions to accept large job cuts. Both Air France KLM and Lufthansa have expressed interest in investing in any new entity which emerges from the current business. Alitalia has been crippled in recent years by strategic indecision, poor industrial relations and soaring fuel costs.

Russian President Dmitry Medvedev and the region's leader, Eduard Kokoity, discussed the future of South Ossetia earlier this week in Moscow, South Ossetian parliamentary speaker Znaur Gassiyev said. Russia will absorb South Ossetia "in several years" or earlier, a position was "firmly stated by both leaders," Gassiyev said.

In Moscow, a Kremlin spokeswoman said Friday there was "no official information" on the talks. In Georgia, the vice speaker of parliament, Gigi Tsereteli, said the statement cannot be taken seriously.

"The separatist regimes of Abkhazia and South Ossetia and the Russian authorities are cut off from reality," he said in Tbilisi. "The world has already become different and Russia will not long be able to occupy sovereign Georgian territory."

The Anglo-Canadian airline, which employed 600 people, said yesterday that it would declare itself insolvent, blaming high fuel costs for its losses. The fate of the airline was in jeopardy all day as planes were grounded and creditors attempted to seize assets. A Zoom flight from Glasgow to Halifax and Ottawa was grounded by BAA, the airports operator, yesterday for non-payment of European and British air traffic control fees, stranding 205 passengers.

John and Hugh Boyle said in a statement: "We deeply regret the fact that we have been forced to cease all Zoom operations. It is a tragic day for our passengers and more than 600 staff. We are desperately sorry for the inconvenience that this will cause passengers and those who have booked flights. The collapse of Zoom is a result of matter beyond our control. Only last year Zoom Airlines made profit, but that turned into a loss in the last year due to the unprecedented increase in the price of aviation fuel and the economic climate.

"The price of oil resulted in our fuel bill jumping by nearly $50 million in one year and we could not recover that from passengers who had already booked their flights."

Reports have begun to circulate in Moscow that Russian oil companies are under orders from the Kremlin to prepare for A SUPPLY CUT TO GERMANY AND POLAND THROUGH THE DRUZHBA (FRIENDSHIP) PIPELINE. It is believed that executives from lead-producer LUKoil have been put on weekend alert. "They have been told to be ready to cut off supplies as soon as Monday," claimed a high-level business source, speaking to The Daily Telegraph. ANY MOVE WOULD BE TIMED TO COINCIDE WITH AN EMERGENCY EU SUMMIT IN BRUSSELS, WHERE POSSIBLE SANCTIONS AGAINST RUSSIA ARE ON THE AGENDA.

Any evidence that the Kremlin is planning to use the oil weapon to intimidate the West could inflame global energy markets. US crude prices jumped to $119 a barrel yesterday on reports of hurricane warnings in the Gulf of Mexico, before falling back slightly. Global supplies remain tight despite the economic downturn engulfing North America, Europe and Japan. A supply cut at this delicate juncture could drive crude prices much higher, possibly to record levels of $150 or even $200 a barrel.

With US and European credit spreads already trading at levels of extreme stress, a fresh oil spike would rock financial markets. THE KREMLIN IS UNDOUBTEDLY AWARE THAT IT EXERCISES EXTRAORDINARY LEVERAGE, IF IT STRIKES RIGHT NOW.

In an address at the party's national convention in Denver, he promised he would do his best to keep alive the American dream of opportunity for all. "America, we are better than these last eight years," he told cheering crowds. "We are a better country than this." MR OBAMA IS THE FIRST AFRICAN-AMERICAN TO BE NOMINATED BY A MAJOR US PARTY.

The presidential election on 4 November will pit Mr Obama against Mr McCain, who will be nominated next week at his party's convention in St Paul, Minnesota. Republican officials say Mr McCain has chosen his running-mate, but the person's identity has not yet been announced.

Moscow's military chiefs revealed their Topol intercontinental stealth rocket had been fired successfully. The chilling declaration was aimed at sparking international alarm about the conflict in the Caucasus, diplomats claimed. Foreign Secretary David Miliband tried to calm the crisis by saying no country wants "all-out war" with Russia. BUT HE ADMITTED THE INVASION OF GEORGIA HAS BROUGHT AN END TO PEACE IN EUROPE.

Russia's Interfax agency said: "The experimental warhead section of the rocket hit its pre-determined target with high accuracy at the firing range." The RS-12M Topol, designed to dodge defence systems, has a range of 6,125 miles — enough to reach Britain — with a 550-kiloton warhead capable of devastating a 14-mile wide area. It was launched from the spaceport at Plesetsk to the Kamchatka Peninsula in Russia's Far East. But Russia's own allies condemned leaders Dmitry Medvedev and Vladimir Putin

The Shanghai Cooperation Organisation slammed the Kremlin for its aggression against neighbouring Georgia. The SCO, made up of China and Black Sea states, said: "Relying on the use of force has no prospects and hinders a settlement of local conflicts. We urge the sides to solve problems peacefully." The EU talked of sanctions unless Moscow backs down.

The prime minister has announced an aid package worth $230m. But aid agencies say many of the victims are being moved to temporary shelters which lack basic amenities and are at risk from disease. Accompanied by the president of the governing Congress Party Sonia Gandhi, the prime minister flew over the flood-affected area by helicopter to get a first-hand view of the devastation.

At least two million people have had to move out of their homes after the government ordered them to evacuate because of the rising waters. The floods have washed away roads and railway tracks, and water and electricity supplies have been affected in many areas. A report released by Unicef says there are fears of infectious diseases as hundreds of thousands of homeless crowd into relief camps.

Politicians have hit out after the move to IMPOSE HARDLINE ISLAMIC RULES ON NON-MUSLIM COLLEAGUES THROUGHOUT SEPTEMBER. The bombshell has been dropped by Labour chiefs of the notoriously loony Tower Hamlets Council in east London. The storm was sparked by an email sent to all councillors this week highlighting arrangements for Town Hall committee meetings next month, which marks the Muslim fasting period of Ramadan.

The memo said that new council leader Lutfur Rahman and his deputy, Siraj Islam, had requested that meetings be kept to a minimum to accommodate fasting councillors. They have also urged all other councillors to resist eating until the breaking of the fast at sunset. Cllr Stephanie Eaton, leader of the Lib Dem group on the left-wing East End authority, said she would be ignoring the new Ramadan regime.

Ramadan is the ninth month of the Islamic Lunar calendar and the holiest of the four holy months. It begins with the sighting of the new moon after which all physically mature and healthy Muslims are obliged to abstain from all food, drink, gum chewing, any kind of tobacco use, and any kind of sexual contact between dawn and sunset.

The men were arrested at Manchester Airport and Accrington, Lancashire, on August 14. Ishaq Kanmi, 22, of Cromwell Street, Blackburn, is charged with soliciting murder, belonging or professing to belong to al-Qa'eda, inviting support for al-Qa'eda, and dissemination of terrorist publications.

Brothers Abbas Iqbal, 23, and Ilyas Iqbal, 21, both of Percival Street, Blackburn, are both charged with possession of an article in circumstances which give rise to a reasonable suspicion that possession is for a purpose connected with the commission, preparation or instigation of an act of terrorism. Abbas Iqbal is also charged with dissemination of terrorist publications.

Ilyas Iqbal is also charged with collecting or making a record of information likely to be useful to a person committing or preparing an act of terrorism. Police sources indicated tonight that the charge of soliciting murder referred to an alleged plot to murder the Prime Minister. The men will appear at Westminster Magistrates Court tomorrow. Lancashire Police and Greater Manchester Police's Counter Terrorism Unit were granted an additional seven days to question them yesterday.

And while the Sunshine State dealt with the havoc caused by the steady, heavy rains that touched each of its 67 counties, the bad weather increased the woes of Florida's precarious and crucial $9 billion citrus industry.

Fay is the most significant and widespread inundation of Florida since five hurricanes smacked the state in 2004-05. Aside from knocking fruits off trees, the combination of wind and rain exacerbated citrus canker, a disease that infects leaves and causes fruit to drop prematurely. Fay is likely to have increased the spread of the disease. Canker has destroyed more than 16 million trees in Florida. Despite $600 million in federal and state money spent to eradicate it from 1996-2006, the United States Department of Agriculture deemed eradication impossible after Hurricane Wilma blew through in October 2005.

As a result of storms and canker, orange production declined nearly in half from 242 million 90-lb boxes in 2003 to 129 million boxes by 2006-07. The price for a gallon of not-from-concentrate orange juice has increased by more than $1.50, to $5.90 last month. Several growers have since sold their groves to developers. The number of commercial groves in Florida dropped from about 857,000 acres in 1996 to 621,000 acres in 2006.

The eighth tropical storm of the Atlantic season had top sustained winds near 40 mph Thursday. Its center was about 305 miles northeast of the northern Leeward Islands and was moving toward the west-northwest near 12 mph. Hanna could produce rainfall of 1 to 4 inches across parts of the Leeward Islands. It's too soon to say if Hanna will affect the U.S.

Nearly three years to the day after hurricane Katrina plowed into the Louisiana coast on August 29, 2005, Port Fourchon is still a glaring Achilles heel in the vulnerable U.S. energy supply chain. Now Port Fourchon and coastal cities like New Orleans are staring down the barrel of Tropical Storm Gustav, which could come ashore next week as the worst hurricane since 2005.

The 1,600-acre (647-hectare) complex is the support nerve center for over half of all offshore drilling operations, and SERVES 90 PERCENT OF THE GULF'S DEEPWATER OIL INSTALLATIONS. Hundreds of large workboats chug between Port Fourchon and the rigs every day, carrying workers, heavy equipment and necessities that range from pipe, drilling mud and diesel fuel to groceries and drinking water.

All those supplies come to Port Fourchon by truck or barge via Louisiana Highway 1 and a waterway called Bayou Lafourche. The exposure of those routes to a surge from the Gulf worries the port's executive director, Ted Falgout. "WE PLAY A CRITICAL ROLE IN 15 TO 18 PERCENT OF THE ENTIRE NATION'S OIL SUPPLY," Falgout said. "If the Lafourche corridor takes a severe hit, everyone in this country will feel the impact."

The growing rift between Russia and the United States over Georgia promises to be a golden opportunity for Damascus as it seeks a weapons deal with Moscow – an agreement that would give it greater leverage in tentative peace talks with Israel and bolster its standing in the Middle East. "Syria saw a lot of opportunity in what happened in Georgia and South Ossetia to advance its own interests in the [region]," says Sami Moubayed, a Syrian political analyst and historian.

Indeed, if the US-Russia rift continues to widen, Moscow could start building greater ties with Washington's Middle East foes. Although Syria's isolation has crumbled in recent years, Damascus remains deeply at odds with Washington over a host of issues: support for Islamist militant groups such as Hamas and Hezbollah, the war in Iraq, and its relationship with Iran.

Syria nonetheless has made a diplomatic comeback in recent months through a carefully calculated balance of patience, stubbornness, and flexibility. Forced into a troop withdrawal from Lebanon in 2005, Syria has seen its Lebanese allies make gains despite the fact that a US-backed political bloc holds a majority in parliament. Also, Syria has managed to balance its key strategic relationship with Iran against a resumption of indirect peace talks with Israel.

Christopher Moreau, who first spotted the tree's markings in his neighbour's garden in the Toronto suburb of Scarborough, believes that it may have helped the health of his mother-in-law, who recently recovered from cancer. "At first I thought I was seeing things," the 47-year-old said. "Then I went and got my mother-in-law to tell her. She was overwhelmed by it. She was crying. I don't know why it's there, but I think it's a blessing," he told the Toronto Star newspaper, adding that he hoped it would help others looking for a miracle.

A spokesman for the Catholic Archdiocese of Toronto said that it does not investigate the veracity of such "appearances". There have been hundreds of "sightings" of the Virgin Mary down the centuries, but recent years have seen her appearing in ever more unusual places.

A decade-old toasted cheese sandwich said to bear her image was sold on eBay for $28,000 in 2004.

One in seven children in Britain - almost 1.8m - now live in totally work-free households, according to the Office for National Statistics (ONS), the majority with a single parent. There has been barely any reduction in the number of households where all adults are out of full-time work in the past five years, the figures show.

Using the Labour Force Survey of employment, researchers found that 15.8 per cent of all households in Britain that contain at least one person of working age had no one in full-time employment. It means that there is complete unemployment in a total of 3.06m families in which someone should be able to work.

This represents an improvement of just 0.2 per cent since 2003. Due to the fact that there are now half a million more families living in Britain, there are actually 43,000 more working-age families who have no one in employment than there were five years ago.