The firm's co-founder David Rubenstein told the newspaper that he was working on ways to address clients' losses. His comments came after Carlyle Capital Corporation (CCC), a unit of Carlyle Group, said it was unable to pay back its debts and may be liquidated. Some $600m (£295m) of clients' money will be lost if the fund fails.

The fund is the latest casualty of the widening credit market crisis. CCC's problems emerged last week when it became apparent that the fund was not going to be able to service its debts. Some of the banks that had lent CCC money started liquidating assets, and the fund's shares, which are listed in Amsterdam, were suspended. On Wednesday, CCC said that it had not been able to refinance its business and it had so far defaulted on about $16.6bn (£8.1bn) of its debt.

CCC said that it would collapse if, as expected, its lenders seized the remaining assets. Other investment funds may now face similar problems, analysts fear.

Xinhua news agency said witnesses described shops being set on fire. Rallies by monks have continued through the week, in what campaign groups say are the largest protests against Beijing's rule in 20 years. An eyewitness told the BBC how security forces and monks clashed on Wednesday, with several monks being beaten. John, a US national who left Lhasa on Thursday, said that about 300 monks had tried to leave the Sera monastery to protest.

But security forces brandishing clubs stopped them and at least one monk was beaten to the ground, he said. The protests began earlier this week, when a number of monks were reportedly arrested after a march marking the 49th anniversary of a Tibetan uprising against Chinese rule. Hundreds of monks took to the streets to demand their release - and reports say tear gas was used to disperse them.

Correspondents say there is growing evidence that protests against Chinese rule are intensifying, despite assurances by Beijing on Thursday that the situation was under control. Beijing claims sovereignty over Tibet, but many Tibetans remain loyal to their spiritual leader, the Dalai Lama, who fled in 1959 and currently lives in exile in India.

Many students are ignoring career aspirations to pursue the chance of fame instead, the Association of Teachers and Lecturers (ATL) survey found. Almost two-thirds of teachers said sports stars were the type of celebrity most pupils wanted to emulate while more than half of students wanted to be pop stars. The celebrities students aspired to be most like, the survey said, were Los Angeles-based David and Victoria Beckham, arguably Britain's most famous couple.

Soccer player "Becks" topped the poll, with more than half the teachers saying their students modelled themselves on the 32 year-old. In second place, with almost a third of the poll's vote, was his 33 year-old wife and pop star "Posh". In an era of reality television "stars" and a media fixation with celebrities, a majority of teachers said celebrity culture negatively impacted the aspirations of their pupils. Many bemoaned students who "wanted to be famous for being famous".

Almost half of the 300 teachers polled said pupils tried to look like and/or behave like celebrities they most admired, fuelling fears that girls particularly dressed in "unsuitable", or provocative styles.

Blair has been working with climate change experts on a report which he will present to the G8 group of industrial countries, he told the Guardian newspaper in an interview published on Friday. "This is extremely urgent. A 50 percent cut by 2050 has to be a central component of this," Blair said. "We have to try this year to get that agreed, because the moment you do agree that then you have something for everyone to focus upon. We need a true and proper global deal and that needs to include America and China."

The Guardian said the United States and EU backed Blair's efforts, but did not make clear whether that meant they supported a 50 percent cut by 2050. He will unveil the initiative this weekend at a meeting in Japan of the G20, a group which includes the G8 and other big economies, the Guardian said. He will travel to China and India to discuss it. Blair said the world needed an agreement on curbing greenhouse gases that cause global warming within two years.

"The fact of the matter is that if we do not take substantial action over the next two years, then by 2020 we will be thinking about adaptation rather than prevention," he said.

In such circumstances, stricken whales are often humanely killed to end further suffering. But then up bobbed Moko the dolphin - a playful creature familiar to bathers off the east coast of New Zealand's North Island. In an astonishing display of communication between species, she and the whales were heard to call to one another before she led the 12ft pygmy sperm whale and her 4ft male calf out to open sea. "I never cease to be amazed by some wondrous events in the animal world, but this beats them all," said Malcolm Smith from the New Zealand Conservation Department.

"Moko is a real heroine because there is absolutely no doubt she learned of the whales' plight through some kind of telepathy and then got them out of trouble." Mr Smith and his team had raced to the beach at Mahia, near Gisborne, after receiving reports about the stranded whales. The group managed to get a sling under the distressed animals and haul them off the sand bar but they became disorientated and kept returning.

"It seems they were reluctant to move off shore, fearing they would become trapped on the sand bar, but they were in just as much danger being so close to the beach," said Mr Smith. "I was starting to get cold and wet and they were becoming tired. I was at the stage where I was thinking it was about time to give up - I'd done as much as I could."

To the disbelief of Mr Smith and his team, they then heard different sounds from beneath the water and suddenly realised it was the whales returning Moko's contact call. "There's no other explanation for it. Within no time, we could see Moko turning and then we watched open-mouthed as the whales began following her away from the beach.

"She escorted them for about 200 metres parallel with the beach to the edge of the sand bar. Then she did a right-angle turn through quite a narrow channel, which the whales would not have found on their own, and led them out to sea. We haven't seen the whales since. Just what that communication was between them I don't know. In fact I was not even aware that dolphins could communicate with pygmy sperm whales, but that is obviously what happened today."

"Today more than ever," the [Pope] told the participants, "reciprocal openness between cultures is an important field for dialogue between men and women committed to seeking authentic humanism, over and above the differences that separate them. Secularization," he said, "invades all aspects of daily life and causes the development of a mentality in which God is effectively absent, entirely or in part, from human life and conscience."

This "is not just an external threat to believers," added the Pontiff, "but has for some time been evident in the bosom of the Church herself." Benedict XVI said believers are being conditioned by a "culture of images that imposes contradictory models and impulses, with the effective negation of God."

Hence people come to believe "there is no longer any need for God, to think of him or to return to him," said the Pope. "Furthermore, the predominant hedonistic and consumer mentality favors, in the faithful as in pastors, a drift toward superficiality and selfishness, which damages ecclesiastical life. The phrase 'etsi Deus non daretur' [as if there were no God] is becoming a way of life which has its roots in a kind of 'arrogance' of reason," said Benedict XVI.

The FBI is investigating the grisly development, and the families of the five kidnapped contractors have been notified, American officials said on condition of anonymity because they weren't authorized to discuss the case publicly.

Authorities confirmed that the fingers belonged to hostages Jonathan Cote, of Gainesville, Fla.; Joshua Munns, of Redding, Calif.; Paul Johnson Reuben, of Buffalo, Minn.; Bert Nussbaumer of Vienna, Austria ; and Ronald J. Withrow, an American who was kidnapped separately from the others. No information was available on when or how the fingers were delivered to US authorities. Some relatives of the missing men said that they'd heard weeks ago that the DNA of the hostages had been obtained, but they'd been given no details.

No financial demand has been made public, and it's unclear what group is holding the men. All of the hostages were seized in southern Iraq, where powerful Shiite Muslim militias operate with relative freedom.

A reproduction of the minutes of trials against the Templars, 'Processus Contra Templarios -- Papal Inquiry into the Trial of the Templars' is a massive work and much more than a book -- with a 5,900 euros (4,125 pounds) price tag. "This is a milestone because it is the first time that these documents are being released by the Vatican, which gives a stamp of authority to the entire project," said Professor Barbara Frale, a medievalist at the Vatican's Secret Archives.

The epic comes in a soft leather case that includes a large-format book including scholarly commentary, reproductions of original parchments in Latin, and -- to tantalise Templar buffs -- replicas of the wax seals used by 14th-century inquisitors. Reuters was given an advance preview of the work, of which only 799 numbered copies have been made.

The Templars, whose full name was "Poor Fellow-Soldiers of Christ and of the Temple of Solomon", were founded in 1119 by knights sworn to protecting Christian pilgrims visiting the Holy Land after the Crusaders captured Jerusalem in 1099. They amassed enormous wealth and helped finance wars of some European monarchs. The Templars went into decline after Muslims re-conquered the Holy Land at the end of the 13th century and were accused of heresy by King Philip IV of France, their foremost persecutor. Their alleged offences included denying Christ and secretly worshipping idols.

The most titillating part of the documents is the so-called Chinon Parchment, which contains phrases in which Pope Clement V absolves the Templars of charges of heresy, which had been the backbone of King Philip's attempts to eliminate them. Their initiation ceremony is believed to have included spitting on the cross, but Frale said they justified this as a ritual of obedience in preparation for possible capture by Muslims. They were also said to have practised sodomy.

"Simply put, the pope recognised that they were not heretics but guilty of many other minor crimes -- such as abuses, violence and sinful acts within the order," she said. "But that is not the same as heresy."

Europe's third-biggest bank UniCredit fell 2 percent after posting slightly lower-than-expected 2007 profits. It said its exposure to U.S. subprime was a "negligible" 164 million euros in December.

The FTSEurofirst 300 index was down 1.5 percent at 1,266.25 having rallied for two days running after a coordinated central bank move on Tuesday to add billions of dollars of liquidity to struggling credit markets. Setting the tone, U.S. stocks fell overnight and Japan followed suit as a new record on oil prices, above $110 a barrel, raised fears of further strains on corporate profits.

Asked whether the United States could repair the damage it has suffered to its reputation during the Bush presidency and especially since the 2003 U.S.-led invasion of Iraq, Kouchner replied, "It will never be as it was before. I think the magic is over," he continued, in what amounted to a sober assessment from one of the strongest supporters in France of the United States.

U.S. military supremacy endures, Kouchner noted, and the new president "will decide what to do - there are many means to re-establish the image." But even that, he predicted, "will take time." Kouchner began the 90-minute event with a speech that emphasized that "there is not just a new diplomacy; there is a new world."

To those intimidated by or fearful of what seem to be the rising challenges of globalization, climate change, spreading disease or new technology, Kouchner had a simple message: "The great difficulty is to accept this new world."

Arye Eldad said he was furious Merkel has been allowed to address the Knesset at all because it is a privilege reserved for heads of state - presidents and monarchs. Allowing her to speak in German, instead of the more neutral English, makes it even more painful, he said. "German was the last language my grandmother and grandfather heard before they were murdered. The execution orders were given in German ... I plan to stand up and leave" before she speaks, he said.

Although the state of Israel was founded in 1948, it agreed to diplomatic ties with Germany only in 1965, after a fierce debate. Even today, many Israelis refuse to buy German-made goods or to visit Germany. The music of Richard Wagner, whose works were played in the Nazi death camps, is barred from broadcast on state-run Israel Radio and informally banned in Israeli concert halls.

Merkel is traveling to Israel with members of her Cabinet and German lawmakers to underscore the strength of the countries' relations. Germany is one of Israel's staunchest allies in Europe and a leading trade partner. It has paid an estimated $25 billion in reparations to Israeli Holocaust survivors, and provided more than $700 million in goods and services to the Israeli government.

The department's latest snapshot of the government's balance sheets, released Wednesday, shows that the deficit for the budget year that began Oct. 1 was up a whopping 62 percent from the red ink of $162.2 billion for the corresponding five-month period last year. The latest year-to-date budget deficit of $263.3 billion was an all-time high, the government said.

Spending totaled a record $1.23 trillion, while revenues totaled $967.2 billion, also an all-time high. For the month of February alone, the government ran a deficit of $175.6 billion, a record for any single month. That was larger than the shortfall of around $170 billion that economists were expecting. The White House predicts that the deficit this year will increase to $410 billion, as the economic slowdown cuts into tax revenues.

So far this budget year, the biggest spending categories are programs from the Health and Human Services Department, including Medicare and Medicaid, $292.9 billion; Social Security, $270.5 billion; military, $247.6 billion; and interest on the public debt, $198.5 billion.

The silent vigil in the huge, neo-classical Heldenplatz (Heroes' Square), climaxed a week of commemorations of the "Anschluss", or annexation, of Austria by Nazi Germany -- an early step towards World War Two and the Holocaust. "I think people here didn't want to passively let this anniversary go by, but rather send a signal countering the Nazi frenzy of 70 years ago in this very place," said Inge Langer, a middle-aged woman who came with her children.

The Anschluss anniversary revived debate about the extent to which Austrians were victims of Nazism or willing accomplices. Most Austrians now agree they were also deeply complicit in the Nazi machinery of war and genocide after decades of denial. Each candle symbolized one of the estimated 80,000 Austrians, including 65,000 Jews, killed by Nazis. Organisers planned to display the name of every known victim on a screen in the square that flanks the old Hofburg imperial palace.

Austrian Nazis grabbed power on March 12, 1938 as German columns began to cross the border and immediately began purging political foes and persecuting a long vibrant Jewish community. The Nazi dictator appeared on a Hofburg balcony three days later to formally proclaim the absorption of his homeland in his "Third Reich" before a rapturous crowd of hundreds of thousands.

LISBON TREATY WILL GIVE EUROPEANS "MILITARY MEANS COMMENSURATE WITH THEIR POLITICAL AMBITIONS."
French Foreign Minister Bernard Kouchner argues that "THE EUROPEANS NEEDED MILITARY MEANS COMMENSURATE WITH THEIR POLITICAL AMBITIONS. HOW COULD WE HOPE TO INFLUENCE A CRISIS OR NEGOTIATIONS WITHOUT THE MEANS TO BACK UP OUR WORDS?" He notes that the revised EU Constitution will allow the Union to assume this capability:

CONSTITUTIONAL LAWYER: LISBON TREATY WEAKENS NATIONAL PARLIAMENTS' POWERS. Euobserver reports that the pending case against the Lisbon Treaty in Germany's Constitutional Court may mean that the document cannot enter into force before 1 January 2009 - the agreed deadline - as the country's President, Horst Kohler, may choose to follow the tradition and wait for the Court's decision before signing off the document. The complaint was launched by Peter Gauweiler of the Christian Social Union, WHO CLAIMS THE TREATY IS INCOMPATIBLE WITH THE GERMAN CONSTITUTION. Peter Gauweiler's lawyer is quoted as saying, "THIS TREATY WEAKENS DEMOCRACY IN EUROPEAN POLITICS, especially national parliaments' right to have a say."

GOVERNMENT TACTICS "WILL COME BACK TO HAUNT THEM IN THE LORDS."
In an article in the Nottingham Evening Post, Chairman of the East Midlands for a Referendum campaign, Neville Baxter said "Pushing the Treaty through Parliament without a referendum lacks all legitimacy. The Government has not convinced people that the Treaty is different to the rejected EU Constitution - on which all three parties promised a referendum - WITH POMPOUS TALK ABOUT HOW MPS KNOW BEST AND THE VOTERS CANNOT BE TRUSTED, THE GOVERNMENT HAVE BLUDGEONED THE BILL THROUGH THE COMMONS WITH AS LITTLE DISCUSSION AS POSSIBLE. This shabby tactic will come back to haunt them in the Lords."

HOW THE EU AFFECTS EVERYDAY LIFE IN THE UK.
The Sunday Express had a double page spread based on Open Europe's recent report "The EU and You: How the EU affects everyday life in the UK", which shows that the EU is responsible for such diverse things as fortnightly bin collections, higher electricity bills, home information packs and rules on children of twelve having to sit in car booster seats. Lorraine Mullally is quoted as saying "The EU now has a powerful influence on our everyday lives. But as a result of the way EU legislation operates, IT IS OFTEN NOT CLEAR TO VOTERS WHEN A PARTICULAR DECISION OR POLICY ORIGINATES IN THE EU."

EUROPEAN PARLIAMENT EXPENSES THEFT ROW CONTINUE.
The News of the World had a full page article on the recent report on widespread corruption in the European Parliament. Open Europe's Neil O'Brien is quoted as saying, "These people should all be going to jail. They are criminals and it's a disgrace this corruption has been covered up."

FAZ: BROWN HAS "STRETCHED HIS ARGUMENT" BY CLAIMING THE LISBON TREATY IS DIFFERENT TO THE CONSTITUTION.
Frankfurter Allgemeine Zeitung notes that Gordon Brown may have circumvented a referendum in the House of Commons - to the relief of his European partners - but he has nonetheless "stretched his argument" by maintaining that the Lisbon Treaty differs from the original Constitution. IT IS NOTED THAT PARTICULARLY THE "FATHERS OF THE CONSTITUTION" INSIST THE TWO TREATIES ARE SUBSTANTIALLY THE SAME.

LISBON TREATY PASSED IN COMMONS.
The Lisbon Treaty bill last night cleared its final hurdle in the House of Commons. The bill now goes to the Lords where a successful referendum vote is much more likely. Speaking about the treaty, Foreign Secretary David Miliband said "the reforms allow us to move on to the agenda of prosperity and development and climate change that we all agree are the essence of the EU's role." Shadow Foreign Secretary William Hague argued that "EVERYTHING ABOUT THE RATIFICATION OF THIS RE-PACKAGED CONSTITUTION HAS BEEN MARKED BY CYNICISM AND CALCULATION."

REVIEW INTO 'WIDESPREAD FIDDLES' BY MEPS.
The Times reports that a review of expenses rules for MEPs was ordered yesterday after a secret report detailed widespread corruption in the European Parliament. MEPs may lose the right to manage their annual 190,000 euro (£145,000) staff budget after a number of scams were discovered, including paying large sums to political parties or to arm's-length companies with no employees.

Two sets of parents in Belgium were recently handed five month prison terms for failing to vaccinate their children against polio. Each parent was also fined 4,100 euros ($8,000). "It's a pretty extraordinary case," said Dr. Ross Upshur, director of the Joint Centre for Bioethics at the University of Toronto. "The Belgians have a right to take some action against the parents, given the seriousness of polio, but the question is, is a prison sentence disproportionate?"

The parents can still avoid prison - their sentences were delayed to give them a chance to vaccinate their children. But if that deadline also passes without their children receiving the injections, the parents could be put behind bars. Because of privacy laws, Belgian officials would not talk specifically about the case, such as why the parents refused the vaccine or how much longer they have to vaccinate their children.

The polio vaccine is the only one required by Belgian law. Exceptions are granted only if parents can prove their children might have a bad physical reaction to the vaccine.