The unprecedented rescue package paves the way for a takeover by Virgin tycoon Sir Richard Branson who said he is "ready and willing" to buy the ailing bank. Branson vows to net £5bn profit for taxpayers if Virgin plan is approved.

Critics point out that the scale of the rescue package is highly risky. In the event of a catastrophic downturn in the housing market, with Northern Rock mortgageholders defaulting on their debts, the taxpayer would be left seriously out of pocket.

Northern Rock was at the centre of the UK's first bank run in nearly 150 years last September after its borrowing costs soared in the credit crunch, forcing it into a Bank of England bail out.

Almost $31bn (£16bn) in write-downs, $9.2bn in charges, $22.6bn in quarterly losses. NUMBERS ALMOST TOO LARGE TO COMPREHEND but numbers which led, in part, to US stock markets experiencing their worst week's trading in five-and-a-half years. As Citigroup, Merrill Lynch and JP Morgan Chase, among others, informed the investment community just how badly they have been impacted by the US sub-prime mortgage crisis, they had little choice but to get their begging bowls out again. The result: tens of billions of dollars in investments from government-backed funds which in recent months have usurped the Wall Street banks as the kingpins of global finance.

The cash infusions were not, however, enough to stem losses in the equity markets, with the S&P500 index falling 2.9pc in the space of little more than two hours on Thursday afternoon, while the Dow Jones Industrial Average, now off 14.5pc from its peak, touched a base level not seen since October 2006. The scale of the collapse in equities stemmed not just from disappointment at the banks' fourth-quarter results, but also from fears that the US economy is now entering what could prove to be A PROLONGED PERIOD OF ECONOMIC RECESSION.

I was struck yesterday by an observation of the Foreign Secretary, David Miliband. He said: "The reform treaty gives Britain a bigger voice in Europe." That seems to me to be the opposite of the truth. The reform or Lisbon treaty GIVES EUROPE A MUCH BIGGER VOICE IN BRITAIN. It follows the original constitutional treaty in giving the EUROPEAN INSTITUTIONS THAT ARE NOT DEMOCRATICALLY ACCOUNTABLE important additional powers, while failing to repatriate any powers to the individual European nations. The people should be consulted when their powers of self-government are being given away.

The original constitutional convention was SUPPOSED TO REDUCE THE DEMOCRATIC DEFICIT OF EUROPE. The Lisbon treaty has done the opposite, taking powers away from the nations and their electorate. THE TREATY IS A DEFEAT FOR THE IDEA OF A LIBERAL DEMOCRATIC EUROPE. The Government's handling of the referendum issue has been shameful, because that, too, has been anti-democratic. They could not face any more referendums in Europe because they would lose them. In particular, they could not face a British referendum. THE BRITISH VOTERS DO NOT WANT TO HAND OVER MORE POWERS TO THE EUROPEAN FEDERALIST BUREAUCRACY; THEY WANT TO GET SOME OF THEM BACK.

There are many Eurosceptics who feel very angry, who feel betrayed. Voters would become more cynical about politicians, and might regard them all as untrustworthy. The young Eurosceptics are as angry as the older. In England there is a rising tide of nationalism responding in part to the success of the Scottish nationalists; Scotland, Wales and Northern Ireland have had their devolutions, IN EACH CASE RATIFIED BY A REFERENDUM. I think the English would claim their own devolution from Europe if they were forced into a centralising treaty and denied their promised referendum.

Promising a referendum and then refusing it is a most dangerous policy for Mr Brown and the Lib Dem leader, Nick Clegg. It is bad to break one's word - it is even worse to be found out.

Sentiment was undermined by sharp falls on Asian markets overnight as investors were left UNDERWHELMED by President Bush's package of measures aimed at stimulating the US economy. Hong Kong's Hang Seng index slumped 5.5 per cent and the Nikkei 225 in Japan fell 3.9 per cent. David Jones, chief market strategist at IG Index in London, said: "The lack of detail in Friday's proposals on how to provide stimulus for the US economy has done little to ease current negative sentiment for global financial markets."

UPDATE:- The stock market was in meltdown at lunchtime today as nearly £60 billion was wiped off London shares in THE BIGGEST CRASH SINCE 9/11. A combination of poor economic figures and the worsening global credit crunch sent the FTSE 100 plunging.

At one stage the drop was the biggest since 9/11 in 2001, although the index of Britain's biggest companies later clawed back some of the losses. The Footsie was down 250.1 points to 5647.8. That means the FTSE 100 has now FALLEN BY AROUND 10 PER CENT IN THE LAST 10 DAYS, by around 15 per cent over the last month and is well on the way to being off 20 per cent since its most recent high of 6754 in July - before the world's banking system was sent spiralling.

In early trade, the FTSE Eurofirst 300 was down 2.4 per cent to 1,325.13, Frankfurt's Xetra Dax shed 3.1 per cent to 7,087.93, the CAC 40 in Paris lost 3.1 per cent to 4,933.39, and London's FTSE 100 sagged 2.4 per cent to 5,761.8.

The latest losses in Europe followed heavy falls in Asia as INVESTORS GAVE PRESIDENT BUSH'S STIMULUS PACKAGE A LUKEWARM RESPONSE. In Japan, the benchmark Nikkei 225 slumped 3.9 per cent to a 27-month low of 13,325.94. The index has lost a quarter of its value in the past six months.

Financial shares bore the brunt of heavy losses with exporters also battered, while in Tokyo, stocks were also hit by a stronger yen. "NOBODY KNOWS WHAT'S GOING ON," said Kyoya Okazawa, head of research at Credit Suisse in Tokyo. "THIS IS THE POWER OF FEAR PUSHING DOWN THE EQUITY MARKET."

In Tokyo, THE NIKKEI 225 slumped 3.9 per cent to close near a 27-month low of 13,325.94. THE INDEX HAS LOST A QUARTER OF ITS VALUE IN THE PAST SIX MONTHS.

Hong Kong stocks dropped 5.5 per cent. Australian stocks extended their losing run to an 11th straight session, falling 2.9 per cent. South Korea's Kospi shed 3 per cent and Singapore was down over 5 per cent in late afternoon trading.

To many in the West, talk of sharia law conjures up images of the floggings, stonings, amputations and beheadings carried out in hardline Islamic states such as Saudi Arabia and Iran. However, the form practised in Britain is more mundane, focusing mainly on marriage, divorce and financial disputes.

The judgments of the courts have no basis in British law, and are therefore technically illegitimate - they are binding only in that those involved agree to comply. For British Muslims who are keen to follow Islam, this poses a dilemma. An Islamic marriage is not recognised by British law, and therefore many couples will have two ceremonies - civil for the state, and Islamic for their faith.

Dr Hasan is open in supporting the severe punishments meted out in countries where sharia law governs the country. "Even though cutting off the hands and feet, or flogging the drunkard and fornicator, seem to be very abhorrent, once they are implemented, they become a deterrent for the whole society. This is why in Saudi Arabia, for example, where these measures are implemented, the crime rate is very, very, low," he told The Sunday Telegraph.

In a documentary to be screened on Channel 4 next month, entitled 'Divorce: Sharia Style', Dr Hasan goes further, advocating a sharia system for Britain. "If sharia law is implemented, then you can turn this country into a haven of peace because once a thief's hand is cut off nobody is going to steal," he says. "Once, just only once, if an adulterer is stoned nobody is going to commit this crime at all. We want to offer it to the British society. If they accept it, it is for their good and if they don't accept it they'll need more and more prisons."

These sentiments, and the vast cultural gulf they expose, alarm many in the West and go to the heart of the debate about the level of integration among Muslims living in Britain and their acceptance of British values.

FOR MUCH OF THE WORLD, THE UNITED STATES IS NOW ON SALE AT DISCOUNT PRICES. With credit tight, unemployment growing and worries mounting about a potential recession, American business and government leaders are courting foreign money to keep the economy growing. Foreign investors are buying aggressively, taking advantage of American duress and a weak dollar to snap up what many see as bargains, while making inroads to the world's largest market. Last year, foreign investors poured a record $414 billion into securing stakes in American companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm.

During the first two weeks of this year, foreign businesses agreed to invest another $22.6 billion for stakes in American companies - more than half the value of all announced deals. If a recession now unfolds and the dollar drops further, THE PACE COULD ACCELERATE, economists say. The surge of foreign money has injected FRESH TENSION INTO A RUNNING DEBATE ABOUT AMERICA'S PLACE IN THE GLOBAL ECONOMY. It has supplied state governors with a new development strategy - attracting foreign money. AND IT HAS REINVIGORATED SOMETIMES JINGOISTIC WORRIES ABOUT FOREIGNERS SECURING CONTROL OF AMERICA'S FORTUNES, a narrative last heard in the 1980s as Americans bought up Hondas and Rockefeller Center landed in Japanese hands.

Some labor unions see the acceleration of foreign takeovers as the latest indignity wrought by globalization. "It's the culmination of a series of fool's errands," said Leo W. Gerard, international president of the United Steelworkers. "We've hollowed out our industrial base and run up this massive trade deficit, and now the countries that have built the deficits are coming back to buy up our assets. It's like spitting in your face."

But even if political tension increases, so will the flow of foreign money, some analysts say, for the simple reason that businesses need it. "The forces sucking in this capital are much bigger than the political forces," said Mr. Garten, the Yale trade expert. "IF THERE IS A BIG CONTROVERSY, IT WILL BE BETWEEN WASHINGTON ON THE ONE HAND AND CORPORATE AMERICA ON THE OTHER. IN THAT CONTEST, THE FINANCIERS AND THE BUSINESSMEN ARE GOING TO WIN, AS THEY ALWAYS DO.

Indeed, it is said that the rest of the Church never allowed a Jesuit to be elected to the real papacy for fear of concentrating too much power in the hands of the order. On Saturday, Jan. 19, the Society of Jesus - the order's formal name - elected a new "black pope." The gathering of 217 Jesuit leaders in Rome chose little-known Father Adolfo Nicolas, 71, as their new "Superior General", a position which has historically been a lifetime posting. THE LEADER OF THE JESUITS HAS SWAY OVER A NETWORK OF PRIESTS, UNIVERSITIES, HOSPITALS AND OTHER MISSIONARY INSTITUTIONS AROUND THE GLOBE.

Following four years of study at the Pontifical Gregorian University in Rome, he then returned to the Far East, with subsequent stints in the Philippines and Japan. Nicolas had spent the last three years running Jesuit operations in East Asia and Oceania, an administrative experience that will serve him in HIS NEW JOB OF MANAGING 20,000 PRIESTS ACROSS THE GLOBE.

But Nicolas' biography shares a striking parallel with another of his more recent predecessors. Pedro Arrupe, the charismatic and controversial Superior General from 1965 until 1983, was another Spaniard who rose up through the ranks in Japan before being chosen to lead the Jesuits. Arrupe's reign was marked by progressive challenges to the Church establishment, including clashes with both Pope Paul VI and Pope John Paul II. THE JESUITS WERE ECLIPSED BY THE STAUNCHLY TRADITIONALIST OPUS DEI.

His successor, a low-key Dutch priest named Peter-Hans Kolvenbach, was credited with re-establishing a serene rapport with top Vatican officials. Last year, Pope Benedict XVI accepted Kolvenbach's unprecedented request to retire from what had always been a lifetime posting. The new black pope may find himself clashing with the regular Pope, WHO HAS REAFFIRMED THAT ULTIMATE AUTHORITY LIES WITH THE VATICAN.

Benedict implored the order to hold firm in Catholic tradition on matters of morality and sexuality. "It could prove extremely useful that the general congregation reaffirm, in the spirit of St. Ignatius, ITS OWN TOTAL ADHESION TO CATHOLIC DOCTRINE, in particular on those neuralgic points which today are strongly attacked by secular culture," the Pope said.

Historically, the Jesuits were THE SHOCK-TROOPS OF THE CHURCH AS IT FOUGHT THE REFORMATION, TERRORIZING PROTESTANT REGIMES from England to the Netherlands to Sweden.

Zimbabwe has been in economic decline for the past eight years, with annual inflation widely thought to be in excess of 50,000%. The highest value note that will go into circulation on Friday is worth 10m Zimbabwean dollars. But that is worth less than US$3.90 (£2; 2.60 euros) on the black market. The introduction of the new banknotes, or "bearer cheques" as they are officially called, is a further attempt to stabilise the Zimbabwean economy.

There have been long queues every day at banks as people have struggled to withdraw cash. The government's only response is to print more money - and that is seen as the main reason for the hyperinflation. There have been no official inflation figures published for the past three or four months. Zimbabwe's Reserve Bank governor, Gideon Gono, has called on the business community not to increase prices every time new measures are taken to adjust the currency.

The new higher denomination bank notes are certain to cause more confusion and they may only bring short term relief. In the meantime, many people have become dependent upon imported goods, there are still severe shortages of fuel and power supplies remain erratic.

Spanish Interior Minister Alfredo Perez Rubalcaba said the suspects included 12 from Pakistan and two from India. Local media reports that the Spanish intelligence agency had warned France, the UK and Portugal that a terror cell was preparing an imminent attack. This coincides with a European tour by Pakistan's President Pervez Musharraf.

The Civil Guard detained the suspects in Barcelona as part of a joint operation with Spain's National Intelligence Centre (CNI). Several premises were searched and officers seized computers and materials to produce explosives. The operation is ongoing and more arrests have not been ruled out. Mr Rubalcaba said the evidence suggested that they were faced with "a radical Islamist group with a significant level of organisation which seems to have taken a step beyond ideological radicalisation".

The BBC's Steve Kingstone, in Madrid, says domestic security will be a key issue in the run-up to Spain's general election, in two months time. The governing Socialist Party says that, during its four-year term of office, 300 Islamist militants have been arrested.

"We have no plans to attack anyone, but we consider it necessary for all our partners in the world community to clearly understand - that to defend the sovereignty and territorial integrity of Russia and its allies, military forces will be used, including preventively, including with the use of nuclear weapons," Gen. Yuri Baluyevsky said. The comments from the hawkish Baluyevsky did not appear to mark a policy shift for Russia, whose leaders have stressed the need to maintain a powerful nuclear deterrent and reserved the right to carry out preventive strikes.

Moscow-based military analyst Alexander Golts said that when Russia broke with Soviet-era policy in 2000 and declared it could use nuclear weapons first against an aggressor, it reflected the decline of Russia's conventional forces in the decade following the 1991 Soviet collapse breakup. "Baluyevsky's statement means that, as before, we cannot count on our conventional forces to counter aggression," Golts told Ekho Moskvy radio. "It means that as before, the main factor in containing aggression against Russia is nuclear weapons."

A week of gut-wrenching losses in the stock market ended on Friday with the Dow Jones industrial average falling 59.91 points, to 12,099.30. That modest decline capped a four-day 678-point plunge that left Wall Street traders and everyday investors wondering if the worst was over - or yet to come.

David W. Tice, a renowned bear, said Friday that the Dow would sink to 6,000 by the end of the year as the country slides into a recession. But Abby Joseph Cohen, the superbull at Goldman Sachs, maintained that the Dow would roar back to finish 2008 at a level 22 percent higher - 14,750 is the number - as the economy perks up later in the year.

While their views diverge, both strategists agreed on one point: The wild ride is far from over. In whiplash trading, the Dow has fallen 14 percent from its peak in October. While the market has taken deeper dives in the past - it plummeted 37.8 percent from January 2000 to October 2002, for example - volatility is approaching its highest levels in several years.

Moves by Congress and the Federal Reserve over the next few weeks could very well determine whether the economy slides into a full-blown recession and the markets continue to be pummeled by bad news, said Mr. Davis of Vanguard. "There are a lot of wild cards out there right now, including rate cuts by the Federal Reserve and what a tax stimulus package could look like," Mr. Davis said. "I do not think it is too late to prevent a recession, but we are at a critical juncture."

There was also a marked increase in the number of floods in 2007, a trend the Centre for Research on Epidemiology of Disasters said reflected the threat posed by global warming. Eight of the worst 10 disasters last year struck Asia. Cyclone Sidr in Bangladesh in November claimed the highest toll of 4,234 lives, according to the Belgium-based centre. "There were no real mega-disasters in 2007, which is the good news, but economic losses were higher than the year before," Debarati Guha-Sapir, centre director, told a news conference in Geneva. "We see more extreme events overall, not geological ones like earthquakes and volcano eruptions, but very many more windstorms and floods," she said.

She said there was already a "significant increase" in floods in 2007, creating unsanitary conditions in which diseases such as malaria, dengue fever and cholera flourish. The 206 recorded floods last year accounted for more than half of the world's 399 natural disasters. This compared with an annual average of 172 floods between 2000-2006. Nearly 200 million people worldwide were affected by disasters last year, half of them in China, which suffered heavy floods last June-July, it said.

Losses from natural disasters amounted to $62.5 billion in 2007, up from $34 billion in 2006, Guha-Sapir said, partly due to rich countries suffering damage to costly insured structures. An earthquake in Japan last July cost $12.5 billion and Europe's winter storm Kyrill caused $10 billion in damage, it said. Summer floods in Britain caused $8 billion in damage, while huge wildfires in California cost $2.5 billion. In 2005, global economic losses from natural disasters soared to a record $225 billion, half of it stemming from damage from Hurricane Katrina in the United States.

During the flood all 5,000 residents were evacuated to the local airport, and about 30 homes and nearly 20 businesses were swamped with water, local media reported. Residents from the town's nursing home were evacuated by plane to the state capital Brisbane.