Nato defence ministers meeting in the Netherlands last night were discussing the plan after several European members refused to meet a shortfall in transport helicopters. Although not named, Germany, France, Turkey, Spain and Greece were reportedly the target of Robert Gates, the United States defence secretary, when he reminded member states of "their moral responsibility and collective commitments" to support their allies by responding to requests for reinforcements and materiel.

Military sources in southern Afghanistan questioned whether helicopters rented from private security companies would meet the standards required to transport British forces. Britain and other European countries fly helicopters that are equipped with complex defensive equipment to detect and defeat heat-seeking missiles. Pilots are also trained to perform difficult low-level evasive flying to throw the aim of Taliban ground fire.

Nonetheless 18 military helicopters have been lost in Afghanistan since 2001 with the loss of 110 soldiers and airmen. The last was a US Chinook transport helicopter in May. Seven people died, including a British soldier.
The need for helicopters has become more acute in response to the growing threat from roadside bombs, increasingly acquired via Iran.

The former United Nations High Representative for Bosnia and Herzegovina delivered his dire prediction after being proposed as a new "super envoy" role in Afghanistan. Lord Ashdown said: "We have lost, I think, and success is now unlikely." The assessment will be considered extreme by some diplomats but timely by those pressing for more resources for Nato operations.

Lord Ashdown added: "I believe losing in Afghanistan is worse than losing in Iraq. It will mean that Pakistan will fall and it will have serious implications internally for the security of our own countries and will instigate a wider Shiite [Shia], Sunni regional war on a grand scale.

"Some people refer to the First and Second World Wars as European civil wars and I think a similar regional civil war could be initiated by this [failure] to match this magnitude." Lord Ashdown, 66, the former leader of the Liberal Democrats, was speaking in advance of a Nato summit in the Dutch town of Noordwijk yesterday.

In its first detailed analysis of the squeeze that has engulfed credit markets since the summer, the Bank says that financial institutions have become more fragile and that the availability of credit may tighten. In turn, it sounds a warning that tighter lending conditions could spell serious fallout for the economy, with sub-prime borrowers and highly-leveraged companies particularly exposed.

The Bank's unexpectedly gloomy report goes on to warn investors that share prices in Britain and the US could prove "vulnerable to any further revision in growth prospects". A further danger is that the dollar could fall sharply if adverse sentiment towards US securities persists, it says.

Sir John Gieve, the Bank Deputy Governor, admitted that although it had expected some of the problems, "the speed and ferocity" of the global disruptions "had not been anticipated by firms or authorities".

Mr Rogers, who ranks among the world's best-known investment figures, said he was putting his faith in China's politically-sensitive currency alongside the Japanese yen and the Swiss franc.

Mr Rogers' comments are followed slavishly by many members of the international investment communities, and his view that the US economy is in a worse state than that suggested by most economic commentators is likely to add to pessimism in some quarters about its health.

The Dow, which tumbled almost 370 points in the final hours of trading last Friday, fell almost 200 points in early trading today as investors digested another swathe of worrying news about the American economy. Sales of previously owned homes tumbled 8pc in September to an annual rate of 5.04m, suggesting that the current achilles heel of the economy is getting worse.

Jonathan Basile, an economist at Credit Suisse, said: "The worst isn't behind us, the worst is here right now."

Traders had already been unnerved after Merrill Lynch chief executive Stan O'Neal refused to rule out further writedowns from the credit crisis after the investment bank shocked Wall Street by disclosing an extra $3.3bn hit today. The revelation leaves Merrill with a total hit of $8.4bn from the credit crunch that paralysed financial markets over the summer and pushed the prestigious Wall Street name to its worst quarterly loss since it was founded 93 years ago.

Less than a month ago, Merrill was predicting a hit of $5bn. Acknowledging the gulf between the two figures, Mr O'Neal said: "In light of difficult credit markets and additional analysis by management during our quarter-end closing process, we re-examined our remaining CDO positions with more conservative assumptions."

Data from the World Trade Organization show that the country vaulted past the US at the beginning of this year and has since moved at lightning speed to eclipse Germany's once indomitable export machine. It shipped $111bn (£54bn) worth of goods in August, up 55pc from a year earlier.

Now boasting 8pc of global exports - three times Britain's dwindling share - China has jumped up the technology ladder. Machinery, equipment and cars now make up 46pc of total exports, while textiles are fading from the picture. Beijing let the yuan break through the key barrier of 7.5 to the dollar yesterday, but seems determined to resist Western pressure for faster appreciation.

The fires, in their fourth day, had destroyed 1,500 homes and caused at least a half-million people to flee - the largest evacuation in state history. At least 1,200 of the damaged homes were in San Diego County, and officials believe that number will rise. "Clearly, this is going to be a $1 billion or more disaster," Ron Lane, San Diego County's director of emergency services, told reporters during a news conference.

So far, the fires have inflicted the worst damage in San Diego County, where five blazes continued to burn. The largest fire had charred 196,420 acres - about 300 square miles - from Witch Creek to Rancho Santa Fe, destroying 650 homes, businesses and other buildings. Other hard-hit areas included San Bernardino County, where hundreds of homes burned in the mountain resort communities near Lake Arrowhead.

The satellite, named Chang'e 1, took off from the Xichang Centre in south-west China's Sichuan province at 1800 local time (1000 GMT). Analysts say it is a key step towards China's aim of putting a man on the Moon by 2020, in the latest stage of an Asian space race with Japan and India

Earlier this month, a Japanese lunar probe entered orbit around the Moon. India is planning a lunar mission for April next year. The satellite is expected to enter lunar orbit in early November and start sending back pictures of the Moon's surface later that month. Efforts by Asian nations to advance their space programmes have gathered pace in recent years.

In 2003, China became the first Asian nation to use its own rocket to put an astronaut in space. Four years later, Beijing triggered international concern by destroying a weather satellite as part of a weapons test.

1.-There is A RAMPANT, SERIOUS FINANCIAL PROBLEM WITH TERMINAL POTENTIAL - AND NO PRACTICAL SOLUTION hidden just outside of the public's view (OTC Derivatives).

2.-Because central banks have gotten so out of hand and political which cannot be controlled by investors or the man in the street, we need to adjust our actions so that each person takes on the responsibilities normal to central banks for their own finances.

3.-Everything we buy is getting more expensive and many assets people have, other than gold, are losing value. Because of this credit is not a proper idea regardless of the weak dollar for the majority of people reading this.

4.-Major financial institutions, Internet financial entities and banks operate without transparency where their derivative holdings are concerned. Losses the financial institutions are publishing are considered by media as having extinguished all the risk. I do not believe this. I believe they are still marked to model, only the model is moving slowly towards reality of worthlessness.

5.-There is an acceleration of bankruptcy among financial institutions. This translates to the individual needing to act as their own financial institution by having their share investments in paper form, gold in their close possession with no one in-between and available cash. The individual must be their own bank and central bank as one has failed us and both may.

6.-The savings rate in the US is negative while the expansion of credit is totally over the top.

7.-Business is turning south so the US Federal Budget Deficit will move up exponentially.

8.-The US dollar has become a bombed out and lost battle zone. There is nothing good anyone can say fundamentally about the US dollar.

9.-Non US entities are fed up with financing the US consumer and US Federal activities. This is clear from the recent TIC report, which is now down trending.

10.-Financial privacy is non-existent.

11.-THERE IS A MODEL FOR EXACTLY WHAT IS HAPPENING NOW AND THAT IS THE WEIMAR REPUBLIC. Name war retributions as OTC derivatives and you begin to see the picture.

12.-The US dollar has now made a clear indication of the final head and shoulders; the massive formation from the absolute top is breaking down.

Number 12 is the item that impacts all of the above because of the dollar's technical position now beginning to reflect the dire fundamentals. THIS IS IT!

This is it because you now have to perform not only as your own bank but also as your own central bank. This is it because the US dollar has completed a major head and shoulders bear formation, pulled back to the underside of the neckline and thereafter declining below the major support line drawn from the beginning of the big dollar bull under Chairman Paul Volcker. Volcker made the dollar and Greenspan gave it all back to Asia.

The dollar break below the recent and most important major, major support line drawn from 1980 to now is the fundamental basis which will push Gold to $1650. The US dollar is, without any doubt in my mind, going to .7200, followed by .6200. Ladies and gentlemen, prepare to defend yourselves.

Indonesian workers around the rumbling Mount Kelud volcano in East Java are unable to harvest cloves and coffee because they are being evacuated from plantations, a plantation firm official said on Wednesday.

Ade Prasetyo, a manager at state-owned PTPN XII which has plantations of coffee, cacao, clove and various woods, said the company had evacuated more than 200 workers from three of its seven plantations to safer areas. "If the eruption is the same as it was in 1990, we expect a loss of 7 billion rupiah (more than $750,000)," Prasetyo told Reuters.

Authorities were evacuating residents living within a 10-km (6-mile) zone around the 1,731-metre (5,712-ft) volcano to safer areas after experts said Mount Kelud was liable to erupt.

Police fired tear gas at students angry at plans to let President Hugo Chavez stand for indefinite re-election as bottles and stones were thrown. Mr Chavez would also be allowed to bypass legal controls on the executive during a state of emergency. Parliament, composed of Chavez allies, is now debating the changes.

Among the students' concerns about the erosion of civil liberties is the fear that the authorities will be allowed to detain citizens without charge during a state of emergency. Mr Chavez has dismissed criticism of the constitutional changes saying they are needed to accelerate Venezuela's transition to socialism.

Merrill reports its third-quarter earnings this morning. The bank announced earlier this month that it expected to write down $5 billion because of losses in its fixed-income unit. Most of the losses, the bank said, were tied to the decline in value of complex debt instruments called collateralized debt obligations, whose value has diminished in recent months as credit markets have been hit by a collapse in the subprime mortgage market.

A Merrill spokesman declined to comment. The additional write-down, coming so soon after the company's $5 billion charge, may raise more questions about the leadership of E. Stanley O'Neal, Merrill's chief executive, and the ability of his top executives to assess the firm's risk exposure.

Since he took over in December 2002, O'Neal has pushed Merrill into riskier businesses - which, if managed well, tend to produce higher returns. That strategy has taken Merrill Lynch deeper into fixed-income markets like commodities and mortgages, areas outside of its traditional strengths of wealth management and equities.

Tuesday, Brad Hintz, an analyst with Sanford C. Bernstein & Company, said he expected Merrill to pull back in fixed income, even though some of the markets were improving. "After this publicly embarrassing write-down, we would expect senior management to sharply tighten its risk management limits to reduce trading volatility," Hintz wrote, referring to Merrill.

He predicted that a "'back to basics' retrenchment of the business will cost approximately $1.0 billion in net income," or about $1.10 in earnings per share for 2008.

Panels of four children, under only minimal adult supervision, are to have the power to require delinquents to repair the damage they've caused and compensate their victims. Others will mimic roles played in the courts with child 'prosecutors', child 'defence lawyers', child 'administrators' and even child 'ushers'.

Alas, this is not a script from Playschool, but an official scheme involving real offenders, which began this week in Preston, Lancashire, and which could be extended to the whole country. Giving youths power to mete out justice is a sign our criminal justice system has failed.

A concept which might seem to many to be beyond satire is being backed in all seriousness by the police and the Ministry of Justice and funded by the taxpayer to the tune of £500,000. Apparently, the idea is that young delinquents will take more notice of their peer group than they do of adults. What an admission of total defeat by those in charge of our failing criminal justice system.

One reason for this catastrophic failure to protect the public is the refusal by many probation officers and others involved in the criminal justice world to accept that punishment is an appropriate and effective response to crime. They believe it is no more than a primitive lust for revenge which serves no useful purpose. And they also tend to see criminals as the victims of society.

But without punishment there can be no justice. The connection between behaving badly and suffering a painful experience as a consequence is a vital part of training children to be socialised and civilised. And treating criminals as victims means, of course, that true victims fail to receive either justice or protection.

This travesty of morality embedded in our criminal justice system has caused its progressive breakdown. And the latest response to this debacle is to tell children to be their own judge and jury. This is clearly farcical since children are by definition immature. As the Magistrates Association has said, the proper place to consider wrongdoing is the courts; children do not have the competence to take judicial decisions.

Indeed, the irony is that the same kind of people who are behind this daft scheme are the first to complain when children of 11 or 12 are tried in the courts, because they say they are not yet mature enough to be considered responsible for their actions. Too immature to be held to account for their crimes, it seems - and yet mature enough to sit in judgment upon others. This is simply an extraordinary abdication of responsibility, and not just towards the victims of crime.

This abandonment of our children is by no means confined to the criminal justice system. Everywhere one looks, the adult world has abandoned its assumption of authority over children and instead is expecting them to adopt wholly inappropriate adult roles. Instead of being taught that under-age sex or drug-taking are wrong, children are presented with information and invited to make adult 'choices'. And they are expected to respond 'maturely' when their parents abandon them in broken families. What we are seeing is simply the adultification of children and the infantilising of adults.

After child judges, whatever next? Child police officers? Prisons run by teenagers? A 15-year-old Justice Secretary? Come to think of it, maybe that would be an improvement.

There is no evidence that the annual campaign, which costs the NHS £115million, saves people from developing more serious illnesses. The study, following others which have cast doubt on the campaign's effectiveness, led to calls for it to be scrapped. The researchers said flu was an 'important-contributor' to acute infections including bronchitis and emphysema. But these were no less frequent in people who had been vaccinated than in those who had not.

More than 15million people - including three-quarters of over-65s - will receive flu jabs this winter. Last month a review in the Lancet medical journal said there were no figures to back claims that the jab saves lives. It said few vaccine trials had actually included elderly people and there is evidence that the clinical benefits of vaccination decline with advancing years, especially after 70.

Researchers from George Washington University, Washington DC, said recently that no study had found a decline in flu deaths since 1980, even though vaccination coverage had increased from 15 to 65 per cent. Last year experts at the independent Cochrane Library, which examines the effectiveness of treatments, found jabs had little or no effect on deaths, the length of hospital stays or time off work.