He argues that Ireland's currency arrangement is likely to worsen the recession, becoming "part of the problem, not part of the solution". Unable to boost the economy by printing or borrowing money, and without the ability of the UK and US to allow the currency to fall, Ireland finds itself without the macro-economic tools to improve the situation. Thus, McWilliams concludes, the government may be forced to re-consider the currency question.

This means losses for investors, already totaling nearly half a trillion dollars, could mount even further over the next few months, with implications for business investment and the overall health of the economy. "YOU SEE A MASSIVE POTENTIAL FOR FINANCIAL MELTDOWN ON A GLOBAL SCALE," said T Marta, fixed-income strategist at RBC Capital Markets.

"People's horizons are moving out to 2009 and they are still not seeing any end in sight and with credit losses increasing that's really not good news," said Steve Goldman, market strategist at Weeden & Co, in Greenwich, Connecticut "The backstop with Freddie Mac and Fannie Mae doesn't deal with the heart of the problem: foreclosures, supply."

"No one knows where it is going to end for stocks," said Robert Macintosh, chief economist at Eaton Vance Corporation, in Boston. "Talk about a negative tone, NO MATTER WHAT ANYBODY SAYS OR DOES IT SEEMS TO GET WORSE." Especially hard hit, US bank shares fell this week to their lowest level since 1996 on fears of seemingly endless losses.

The deal, in which a notorious Lebanese attacker, four other militants and the bodies of 199 Arab fighters were traded for two dead Israeli soldiers, closed a painful chapter from Israel's 2006 war in Lebanon. Israel has been carrying out unequal prisoner swaps for decades, including handing over 4,600 Palestinian and Lebanese captives in 1983 in exchange for six captured Israeli soldiers. In the past it's even traded live prisoners for bodies, as it did Wednesday.

In today's world of asymmetric warfare - with militant groups increasingly focused on kidnapping as a way to pressure Israel and with the fight against terrorism now a worldwide challenge - the lopsided swaps could have graver consequences than in the past.

"WHAT WE'VE DONE NOW HAS MADE KIDNAPPING SOLDIERS THE MOST PROFITABLE GAME IN TOWN," said Israeli security expert Martin Sherman. "There is absolutely no reason why Hezbollah should not invest huge resources now, along with Hamas, in the next kidnapping." The issue is of immediate concern because the government is deeply involved in indirect negotiations to free its other captive soldier, Gilad Schalit, held by Hamas militants in the Gaza Strip. Unlike Ehud Goldwasser and Eldad Regev, the two soldiers whose bodies were returned Wednesday, Schalit is believed to be alive.

Gore hopes to deliver a major speech on the environment at Constitution Hall in Washington Thursday that will "press the reset button on how people are looking at the energy crisis and the climate crisis," said Brian Hardwick, spokesman for Gore's Alliance for Climate Protection. The former vice president-turned-elder statesman has achieved rock-star status within his party, not to mention a Nobel Prize, for his environmental activism. But Democrats' political troubles over the issue of gas prices and domestic drilling prompt some lawmakers to wonder about Gore's timing.

The question some Democrats have is whether a high-profile speech about the importance of protecting the environment might be exploited by Republicans who want to portray their ideological opponents as caring more about polar bears than Americans who have had to pay record prices for gasoline. Republicans are pouncing on Gore's re-emergence, holding it up as proof that Democrats favor environmental policies that further escalate energy costs.

"Mr. Gore will yet again call attention to the policies called for by radical environmentalists that would result in even higher gas prices," said Michael Steel, spokesman for House Republican Leader John Boehner (Ohio). "People's anger about a lot of things is crystallized as a result of the gas prices," said Lautenberg. "The anger is focused by the visibility [of inflated prices] at the pump."

During an interview on C-SPAN, Peterson stressed the need for Congress to act now to address the nation's energy crisis. Amid the partisan bickering on Capitol Hill, Peterson and Rep. Neil Abercrombie (D-Hawaii) are leading a bipartisan group of lawmakers seeking consensus on energy legislation.

Peterson, who is not seeking re-election, said, "Public pressure is building." He added that anti-drilling members of Congress were strongly criticized by their constituents during the July 4 recess. Abercrombie said, "You can't stand in front of a wave." He claimed the public is tired of the political games politicians are playing on gas prices.

The unknown group attacked soldiers in the town two weeks ago, killing nine people including a pregnant woman. Bonny Island is home to a major oil and gas export terminal but production has not been affected.

In Bonny, youth leader Kingsley Adonis Pepple said people took the militant's threat seriously. "They were handing out copies of this article to people in the street. There was panic. People packed up their entire family into a boat and fled." Bonny is a city of over 100,000 people, many of whom work in the oil industry.

The new multi-million dollar Liquefied Natural Gas export terminal is nearby. Shell announced on Tuesday that a pipeline leading to Bonny Island, attacked by militants two months ago, had been repaired and production resumed. Militant attacks on oil infrastructure are partly responsible for Nigeria's oil exports being cut by around a quarter in recent years. Militants have also kidnapped oil workers for ransom. Some groups are demanding a larger share of the oil wealth, but others are criminal gangs who make a living from extortion and oil theft, Delta activists say.

European Affairs Minister Dick Roche said "it is far, far too early to be talking about a referendum or about some specific policy to go forward". Foreign Minister Micheal Martin said Ireland would not be bullied. Mr Sarkozy will visit Dublin on Monday, seeking a way ahead after Irish voters rejected the EU treaty on 12 June.

France currently holds the EU's six-month rotating presidency and is keen to resolve the Lisbon Treaty stumbling block before its presidency ends. Mr Sarkozy was quoted as saying "THE IRISH WILL HAVE TO VOTE AGAIN". He was speaking to deputies from his conservative UMP party in Paris on Tuesday.

The EU is currently operating under the Nice Treaty, which Irish voters first rejected in 2001, but then accepted just over a year later, in a referendum re-run. But the EU constitution debacle in 2005 makes it harder to re-run the Lisbon Treaty referendum now. French and Dutch voters rejected the constitution in 2005 - and the EU decided against putting the constitution to another vote.

The local authority in Durban wants legalised adult entertainment venues during the tournament. But African Nazareth Democratic Movement (ANDM) president Thokozani Hlatshwayo said the proposal was "against the word of God". Opposition parties fear that, if introduced, it could become permanent.

The main opposition Democratic Alliance and the youth wing of the Inkatha Freedom Party (IFP) have condemned the suggestion. "Plans to legalise Durban's red-light districts before the 2010 World Cup should be condemned in the strongest possible manner," said Pat Lebenya-Ntanzi of the IFP youth brigade. She said the South African government was sending out mixed messages to young people.

"On the one hand it preaches strong family values and moral regeneration, but on the other hand they want to legalise prostitution on Durban's streets. It doesn't make sense," she said. An additional concern is Aids - some five million people in South Africa are HIV-positive - making it one of the world's worst-hit countries.

Speaking at his first public appearance in Sydney, he said it was a courageous move that had offered hope to other disadvantaged people around the world. PM Kevin Rudd formally apologised to Australian Aborigines early this year. During the course of the visit - his ninth outside Italy - he is also expected to apologise for decades of sexual abuse of children by priests.

He made his remarks at a short welcome ceremony led by Mr Rudd. The prime minister said the pontiff was "truly among friends" in Australia and that the country was honoured to have him there. The pontiff said: "Thanks to the Australian government's courageous decision to acknowledge the injustices committed against the indigenous peoples in the past, concrete steps are now being taken to achieve reconciliation based on mutual respect."

Australia's Aborigines make up about 2% of the population. They have consistently higher rates of ill-health, unemployment and imprisonment than other Australians and a life expectancy 17 years lower. The Pope is in Sydney for the Catholic Church's World Youth Day, expected to attract some 200,000 young Catholics.

The Israelis handed over the prisoners, along with the remains of 200 Lebanese and Palestinian fighters, in exchange for the remains of two soldiers. The soldiers' capture in 2006 sparked a brief war between Israel and Hezbollah. Greeting the returnees at a huge rally in Beirut, Sheikh Nasrallah said THE "AGE OF DEFEATS" WAS OVER.

The most prominent of the ex-prisoners is gunman Samir Qantar, jailed in 1979 for killing a four-year-old Israeli girl and two other people. It is clear Hezbollah means to extract the maximum possible publicity from this event, the BBC's Crispin Thorold reports from the rally. The release, which has caused so much pain in Israel, is being treated as a triumph in Lebanon, by supporters and opponents of Hezbollah alike, he adds.

Under the exchange - the fruit of two years of delicate German mediation - Hezbollah is also to return the remains of Israeli soldiers killed in south Lebanon in 2006. The agreement has caused controversy in Israel, with some ministers opposed to exchanging live Hezbollah prisoners for dead bodies.

The Israeli soldiers, Eldad Regev and Ehud Goldwasser, were seized in 2006 but until now there had been no confirmation of their deaths until Wednesday. They are due to be given military funerals on Thursday. Correspondents say the mood in Israel over the exchange of prisoners for the remains of dead soldiers is grim. "Woe betide the people who celebrate the release of a beastly man who bludgeoned the skull of a four-year-old toddler," Israeli Prime Minister Ehud Olmert said in a statement before he was due to meet the soldiers' families.

Widespread unlawful job practices, squalid housing, and a thriving trade in fake documents were uncovered. More than 40 houses packed with illegal immigrants were identified in one square mile of Southall, west London.

The young, MOSTLY MALE PUNJABIS are not here lawfully and, although most know the risks, they have few legal rights. They are surrounded by forgers, criminals and ruthless employers. Among them, the team of undercover reporters met and filmed a man who called himself Vicki. He was careful about his security - moving the car in which they talked away from CCTV cameras - but open about the fake documents he could obtain, and boasted about customers as far afield as Sheffield, Bradford and Coventry.

Vicki said he could get people into the country on lorries, known as donkeys, organised by what he called his "man in Paris", and told how he could provide a fake "original" passport that had been "checked" to beat security at a UK airport. The undercover team found there was no shortage of job offers, including at a Southall chip shop where a fauji told of being EMPLOYED FOR 12-HOUR DAYS, SIX DAYS A WEEK AT £150 - ABOUT £2 AN HOUR. Another man, Mohammed, was taken to a building site and, without being asked whether he had any experience, was put to work on a roof parapet with no training, safety advice or kit. He was paid £35 for 12 hours' labour.

This hidden community is an open secret - landlords take on tenants, employers want cheap and uncomplaining labour, while the criminals trade in people's lives. Once the undercover reporters infiltrated this closed community, it was clear how easy it is to remain invisible. One clear fact remains: the scale. In just one square mile, hundreds of illegal immigrants, scores of multiple-occupancy houses, and people dealing in fake identities, employment and fraud. A criminal network that is out of sight.

The wide-ranging letter, which covers difficult issues including religious freedom and religiously-inspired violence is in response to a document written last year by Muslim scholars from 43 countries. Discussing differences between the religions, Dr Williams acknowledges THAT CHRISTIAN BELIEF IN THE TRINITY IS "DIFFICULT, SOMETIMES OFFENSIVE, TO MUSLIMS". The Trinity is the Christian doctrine stating God exists as the Father, the Son and the Holy Spirit and conflicts with Islamic teaching that there is one all-powerful God.

Speaking about the history of the two religions, Dr Williams said they had been too often confused with Empire and control. He said: "Despite Jesus' words in John's gospel, Christianity has been promoted at the point of the sword and legally supported by extreme sanctions; despite the Qur'anic axiom, Islam has been supported in the same way, with extreme penalties for abandoning it, and civil disabilities for those outside the faith. "There is no religious tradition whose history is exempt from such temptation and such failure."

The 17-page letter, called A Common Word for the Common Good, is in response to a letter from Muslim leaders written last September. That letter, A Common Word Between Us and You, was signed by 138 Muslim scholars to declare the common ground between the two religions.

Dr Williams described the Muslim document as hospitable and friendly and added: "Your letter could hardly be more timely, given the growing awareness THAT PEACE THROUGHOUT THE WORLD IS DEEPLY ENTWINED WITH THE ABILITY OF ALL PEOPLE OF FAITH EVERYWHERE TO LIVE IN PEACE, JUSTICE, MUTUAL RESPECT AND LOVE.

The cost of conventional fertiliser - which is closely linked to the price of oil - has shot up over the past year. But many landowners are turning to a ready supply of treated human sewage from water companies who are no longer allowed to dump it at sea. And it seems farmers are taking as much as they can get - supply is up by as much as 25% in the past few months. Severn Trent Water, which supplies sewage to farmers, reports that it is unable to keep up with demand.

Human sewage is allowed to be spread on grassland and crops - it cannot be used on salads, fruit and root crops. Tony Martindale, recycling manager at Seven Trent Water, which supplies 600,000 tonnes of sludge to farmers every year, says there has been a 25% increase in demand over previous years.

He says every effort is made to ensure there is no danger to human health, insisting that 99% of the pathogens are killed in the treatment process. The sludge is also tested in laboratories to make sure there are no heavy metals in it and there are no cases of people being affected by the practice, Mr Martindale adds. He adds that they do their best to address concerns about the smell. "There are a few problems with odour but we do try to minimise that," he says. "We always take the wind direction into account."

"UN Security Council Resolution 1701 is being violated. Hizbullah continues to get stronger with the ongoing and intimate assistance of the Syrians," according to Defence Minister Barak. Speaking at a meeting of the Labour party's Knesset representatives on Monday, Barak said, "The delicate balance that exists on the northern border should not be violated on the two-year anniversary of the Second Lebanon War. We should make an explicit statement: Resolution 1701 did not work, it is not working, and all indications are that it will not work in the future. It is a failure."

Adding further weight to Defence Minister Barak's declaration is an article in the Kuwaiti daily Al-Siyasa, which reported Monday that Hizbullah has acquired chemicals needed to make weapons such as nerve gas or mustard gas from North Korean suppliers. The Lebanese terrorist organization is allegedly preparing to arm its Katyusha rockets with such chemical warheads. Echoing Barak's claims, the Kuwaiti paper also stated that the assistance of Syria and Iran has been crucial in Hizbullah's efforts to acquire chemical weapons capabilities. The Al-Siyasa report was based on intelligence provided to the Kuwaiti paper by Syrian opposition figures in the United States.

Other Arab sources also indicate Hizbullah is entrenching itself for another attack on Israel. The organization is reportedly stockpiling "truckloads" of building materials, such as steel and concrete, in order to restore and expand the terrorists' network of fortifications in southern Lebanon.

Ahead of the talks, Peter Mandelson has urged EU countries to make a "SHOW OF UNITY" adding that France is "very mindful of its responsibilities as the presidency of the EU." In an open letter in yesterday's IHT, the trade ministers of Britain, Sweden, the Czech Republic, Estonia, Latvia and Slovenia also urged the EU to keep a united front, arguing "We cannot afford to miss the chance to counterbalance the present negative trends in world economic affairs. THE CREDIBILITY AND RESPECT OF THE WHOLE MULTILATERAL TRADING SYSTEM MUST BE MAINTAINED."