Iraq goes nuclear with plans for new reactor programme

Iraq has started lobbying for approval to again become a nuclear player, almost 19 years after British and American war planes destroyed Saddam Hussein's last two reactors, the Guardian has learned.

The Iraqi government has approached the French nuclear industry about rebuilding at least one of the reactors that was bombed at the start of the first Gulf war. The government has also contacted the International Atomic Energy Agency (IAEA) and United Nations to seek ways around resolutions that ban Iraq's re-entry into the nuclear field.

Iraq says it envisages that a reactor would be used initially for research purposes. "We are co-operating with the IAEA and expanding and defining areas of research where we can implement nuclear technology for peaceful means," the science and technology minister, Raid Fahmi, told the Guardian.

"After the dissolution [of the regime] we did not have an industry, but we have become more and more conscious of the need for nuclear technology. This was raised several months ago with the relevant bodies."

Iraq's renewed dalliance with the science that was partly responsible for its international isolation, and two devastating invasions, comes at an extremely sensitive juncture in regional politics, with its near neighbour Iran accused of diverting its growing nuclear capacity to develop a weapons programme.

Fahmi insists Iraq has "only peaceful applications" in mind for a nuclear programme, "including the health sector, agriculture ? and water treatment".

The Iraqi government cannot meet the needs of residents served by antiquated electricity networks and water distribution that need an overhaul. Most other service sectors, including science and technology, are also unable to satisfy need, making relatively cheap and efficient nuclear energy an attractive alternative.

However, the fresh talk of a nuclear Iraq also comes amid a security environment that is yet to inspire confidence. Two government buildings were destroyed on Sunday by suicide bombers driving trucks through the heart of Baghdad, less than three months after an almost identical attack crippled two other ministries. Almost 300 people died in the attacks and more than 1,000 were maimed.

Fears also remain that radioactive material generated in Iraq, including yellowcake, a powder formed in the processing of uranium, is still unaccounted for six years after widespread looting at the site of the Tuwaitha nuclear research centre on the southern outskirts of Baghdad.

A research centre, a nuclear waste management facility and all three of Iraq's reactors, known as Tamuz 1, Tamuz 2 and Tamuz 14, were located on the site. One of these, a French-made reactor, was destroyed in a 1981 Israeli bombing raid .

The area was crucial to Saddam's bid over three decades bid to exert leverage over Iran and the US and fuelled the belief in the international community that the executed dictator intended to weaponise Iraq's nuclear capacity.

Since 2003, relics and contaminants have been gradually decommissioned in a programme sponsored by international backers, including the IAEA, and run by Iraqi scientists.

"We lost some control and there was a lot of looting," said a nuclear engineer, Adnan Jarjies, standing near one of the ruined reactor cores this week. Pointing to the nearby research plant, which is still partially standing, he said: "Some of the equipment was looted from this facility and we have to [rehabilitate] it again."

Jarjies said the main phase of the four-part decommissioning program, which he supervises, started in 2007 and should be finished by the middle of next year.

Two ruined reactors remain largely as they were left after the 1991 bombing, with their contaminated cores now filled with concrete and water.

A third site that was once used as a storage centre for spent reactor fuel is now a brick-strewn wasteland. The whole nuclear site remains surrounded by almost seven kilometres of 50-metre high sand berms.

"After 1991, UN Inspectors have been coming to this site four to five times per year," said Jarjies. "They have had access whenever they wanted."

Fahmi admitted there were "some impediments" to the plan. "At the moment, UN resolutions, including 707, don't allow us to enter this field, so we are lobbying for the resolutions to be lifted," he said.

No 10 tug-of-war over Northern Rock

A tug of war has begun at the top of the government over the future of Northern Rock as senior figures argue that the Treasury's planned sell-off should be stopped so that the ailing bank can instead be turned into a building society owned by its customers.

The move would mean forgoing a potential £11bn windfall for taxpayers but some cabinet ministers and No 10 officials believe this option is preferable to selling the bank to a rival or refloating on the stock market since it would leave the bank less prone to instability and financial risk.

However, there are concerns within the Treasury, which needs to reduce public debt and claw back some of the £25bn of taxpayer money which was used to bail out the bank in 2008.

The final decision will be taken by ministers but they want to win the support of UKFI, the company set up to run the nationalised banks after last year's crash. Senior government sources believe there is a convincing case that taxpayers would benefit in the long term if a remutualised Northern Rock were able to help less well-off customers get low-interest loans.

The plans are meeting resistance from those who want the bank sold off by a Labour government to prove the rescue of Northern Rock was the right thing to do.

However the policy is appealing to Labour strategists beginning to coalesce around the rolling out of mutuals, and cooperatives across other areas of the public services as a policy platform for Labour's future; and politically appealing, as they think it will test David Cameron's reforming credentials for banking .

The lobbying comes as the European commission is expected to rule on whether EU rules allow the government to break the bank's assets down, ringfencing its toxic debt within a bad bank and creating a good bank out of the existing savings and high-quality mortgages.

It has been thought the government would time the sale of the good bank to a newcomer to the industry, such as Richard Branson's Virgin Money, ahead of the general election so as to raise funds and gain a political bounce. But yesterday a senior government source said that, should the EU allow the break up, it was still possible the good part of the bank would never reach the market. Though UKFI's remit is to sell the bank on at value to the taxpayer, those seeking remutualisation think they can make "the case for a different long-term approach to consumer finance".

A number of senior ministers and party figures are lobbying for the bank to be kept public and made a mutual organisation.

A source said: "The issue here is whether we want some short-term financial gain to the taxpayer or [we] restructure the banking system over the long term for the better. We think we want to do the latter. The key point is ? for the bank to be owned by account holders not shareholders. This kind of bank would be less prone to instability and financial risk. It would reflect the ethos of traditional building societies."

Brussels' sanction for the break-up of Northern Rock into a "good" and "bad" bank is likely to herald a transformation of high-street banking that could lead to three new players emerging in the UK. Royal Bank of Scotland and Lloyds Banking Group are expected to be told in the coming weeks to sell off hundreds of bank branches to new players in the market.

Should Northern Rock become a mutual, ministers would want one of the building society's founding principles to involve delivering services across the community with direction towards the least well-off. This might include the bank being encouraged to offer high-quality low-interest loans to low earners who find it difficult to secure capital.

A government source said: "We would want to see how a remutualised Northern Rock could be used to boost savings."

The move would be welcomed by a broad coalition of senior MPs, academics and thinktanks.

Over the summer the respected Treasury select committee chairman, John McFall, backed a report written by the Oxford professor Jonathan Michie and commissioned by the Building Societies Association, which urged the government to shelve plans to sell Northern Rock and instead become a mutual again.

Treasury ministers not only want the return of the money currently loaned to Northern Rock, but are anxious to secure a fresh injection of funds into a market which still has very little lending.

Richard Branson's finance arm, Virgin Money, applied two weeks ago to the City regulator for a banking licence to sell current accounts and mortgages on the high street, a move interpreted as a takeover bid on Northern Rock.

However though the Treasury is expected to rule the mutualisation of Northern Rock unaffordable, the Treasury minister Sarah McCarthy-Fry told a Labour party conference event that nobody had "ruled out the remutualisation of Northern Rock".

Brown reverses MoD's £20m TA cut

Gordon Brown bowed to intense pressure from MPs of all parties yesterday and personally intervened to cancel a proposal by the cash-strapped Ministry of Defence to impose a planned £20m cut in the Territorial Army's training budget, following representations by the former defence secretary John Reid and other senior Labour backbenchers such as Lindsay Hoyle.

The U-turn came in advance of an opposition-led Commons debate today that threatened to see a backbench revolt reminiscent of the government's defeat over the rights of former Gurkhas to remain in Britain.

Brown will tell the Commons today that the cuts, which provoked outrage from reservists as well as MPs, would be restored allowing TA soldiers to continue routine training one night a week, as well as one weekend a month.

The prime minister ordered the changes to reverse the proposed TA budget cuts after discussions with Bob Ainsworth, the defence secretary, and the chief of the defence staff, General Sir David Richards.

David Cameron, the Conservative leader, raised the issue at last Wednesday's prime minister's questions.

On Monday Bill Rammell, the armed forces minister, told MPs that the government had compromised by agreeing that monthly drill hall training for TA reservists would be restored.

That measure reduced the proposed cuts from £20m to £17.5m.

The cuts were required to focus resources on Afghanistan, but Reid led the Labour backbench opposition to the move during the statement on Monday saying he feared the cuts might reduce the number of people capable or willing to come forward to serve in the army in Afghanistan.

Last night, Reid praised Brown for listening to the objections, saying he had taken time out from the recession and pressing European issues to listen to his concerns.

"I very much welcome the fact that the prime minister has been prepared to listen to the issues and personally intervene to make sure that the Territorial Army training budget is retained," Reid said.

Defence officials last night confirmed that the cuts would be restored but were at pains to point out that training for the growing number of reservists deployed to Afghanistan would not have been affected.

Nevertheless, the move was just the latest indication of the pressures on the defence budget and of growing tensions between the MoD and No 10 Downing Street.

The prime minister's recent U-turn allowing Gurkha veterans to settle in the UK was just one example of how Brown does not understand the ethos and concerns of the military, defence officials say.

A dispute over Gurkha pension rights is currently being heard in the high court.

The furore over £20m public spending cut also underlines how difficult it is for weakened ministers to push through even the smallest public spending reductions.

Reid said that he welcomed the "reaffirmation of training" for the TA and said it would reassure its members. "Gordon Brown and Bob Ainsworth have always said that those who are taking the risks and making sacrifices would receive the back-up that they needed and I am delighted that they have confirmed that by their willingness to intervene in this," Reid said.

Reid and Eric Joyce, the former parliamentary aide to Ainsworth who resigned last month in protest against the government's handling of military issues, are understood to be among many expressing concern about the possible impact on recruitment and retention of territorials.

Hoyle, another Labour critic of the cuts, said that he had directly asked Brown to intervene in the dispute.

Gerald Howarth, shadow defence minister, said that the government's climbdown was a victory for Cameron. "David Cameron raised this issue at PMQs two weeks ago and we welcome this climbdown from Gordon Brown," he said.

"It is a shame that he and his ministers caused so much dismay to those loyal members of the TA training at home and putting their lives on the line in Afghanistan."

Nick Harvey, the Liberal Democrat defence spokesman, said: "The state of the TA is much too important to be used as a political football in this way.

"It was a shocking error of judgment for the government to have contemplated this cut in the first place."

Pirate investigation sights a yacht

? No contact since distress beacon activated on Friday
? Naval helicopter reports sighting of yacht and skiff

Search and rescue teams hunting for a retired British couple feared kidnapped by pirates in the Indian Ocean have spotted a yacht towing a pirates' skiff towards the Somalian coast.

Nothing has been heard of Paul and Rachel Chandler, from Tunbridge Wells, Kent, since the distress beacon aboard their 38ft vessel, Lynn Rival, was activated on Friday night.

The Foreign and Commonwealth Office is "urgently investigating" reports that the couple, on a round-the-world dream voyage, are being held for ransom after being boarded as they headed through dangerous waters towards Tanzania from the Seychelles.

Tonight the European Union Naval Force Somalia reported a helicopter from a ship involved in the search had spotted a yacht towing a skiff, or small pirate boat, 200 miles south-east of the Somalian port of Harardhere, a pirate haven.

"The helicopter went up to look at some skiff activity in the area. The light was just fading. As he was heading across the horizon he saw the yacht," said EU naval force spokesman, Commander John Harbour.

"He closed in as far as he could and saw the yacht towing a small skiff, then he had to return to ship. We have no confirmation it is the Lynn Rival. But we are treating the sighting very seriously. It was the first yacht we've seen. It's in the area where we've been looking for this yacht," he added. The search was continuing throughout the night.

Pirates were suspected after a man, calling himself Hassan, contacted Reuters news agency and said: "The British couple are in our hands now. We captured them as they were touring the Indian Ocean." He added they were healthy and ransom demands would follow.

Mr Chandler, 58, a former engineer, and his wife, 55, a retired economist, sailed from the Seychelles on Thursday bound for Tanzania via the Amirante islands.

A cryptic last message on their blog (http://blog.mailasail.com/lynnrival), posted at 0641 on Friday read: "PLEASE RING SARAH". It is thought to refer to Mrs Chandler's sister, and the capital letters distinguish it from other blog entries.

The couple's Emergency Position Indicating Radio Beacon (Epirb) was activated at 2300BST on Friday and picked up by Falmouth coastguard, the marine rescue command centre.

A search, covering 1,000 square miles, was launched involving the Combined Taskforce 151, an international naval response set up to combat Somali pirate attacks, along with Nato and EU counterpiracy teams. HMS Cumberland and HMS Cornwall Royal, both on anti-piracy patrols, are involved.

The couple, married for 25 years and who have no children, retired early to pursue their dream of sailing the world and had been living on their boat for three years, said their distressed relatives.

Immediately before leaving the Seychelles, where they had been based for seven months, they wrote on their blog: "We'll be at sea for 8-12 days, maybe 14 ?We probably won't have satellite phone coverage until we're fairly close to the African coast, so we may be out of touch for some time."

Mr Chandler's sister, Jill Marshment, from Tewkesbury, Gloucestershire, said the couple had no means to pay a ransom. "It's a very basic yacht and they don't have the money to pay a ransom. They were doing it all on a shoestring budget after their early retirement," she said.

"My last contact with them was on Wednesday when they were looking forward to going and said they would be in contact in two weeks' time."

Mrs Chandler's brother, Stephen Collett, told ITV news: "I think everything they've got is invested in their boat, so if they have been captured then the pirates have got the boat, which is as much as they're going to find really."

Mr Chandler's widower father, Alfred, 98, who was being cared for by neighbours in Dartmouth, Devon, was said to be "shocked and stressed".

Leah Mickleborough, a niece whose wedding the couple attended in Norfolk in September, said they were experienced sailors who had lived on their yacht for years.

The family had been told on Friday that the distress signal had been activated, but then switched off again, so had been "fairly confident" it was just an accident.

"We were just waiting for them to come into docks because it tended to be the case that, out in the middle of the Indian Ocean, it was quite difficult to get hold of them and it was expected that they would dock at a little island," she told BBC Radio 5 Live.

The Chandlers spent most of their time abroad after leaving Tunbridge Wells to embark on their adventure more than three years ago, renting out their ground floor flat on a hill overlooking the town.

Their extensive blog shows they were enjoying life to the full.

The Seychelles, where they described swimming with turtles and dining on fresh local fruits and fish, was "paradise", so much so they stayed for seven months, apart from a visit to the UK in September to see Mr Chandler's frail father and to attend the family wedding.

Their adventures had included travelling from Turkey through the Suez Canal, past Saudi Arabia, around to Mumbai then to the Seychelles.

They were well aware of the threat of piracy. Two of their sailing friends had been delayed heading to Tanzania in May "because of the Somali pirate problem", according to their blog. In another post, in June, they commented: "The seas around the Seychelles are now too rough for the pirates to operate in."

Nick Davis, from the Merchant Maritime Warfare Centre, said waters around the Seychelles had become one of the most dangerous areas for piracy since warships had moved into the Gulf of Aden to protect merchant ships.

In the last few weeks pirates have taken a fishing boat, a container ship and a dry bulk carrier. Pirate activity had been reported in the area the couple were sailing earlier on the day their Epirb went off. Pirates typically use "mother ships" to sail hundreds of miles to sea and then launch attacks in small skiffs, armed with assault rifles and rocket-propelled grenade launchers.

A surge in global piracy incidents off the coast of Somalia has seen attacks this year triple to 47 compared to last, according to the International Maritime Bureau.

Andrew Mwangura, head of the East African Seafarers' Assistance Programme in Mombasa, said that while the Chandlers' route from the Seychelles to Tanzania was not usually used by cargo ships, the most common target for pirates, it was well within attacking range.

"With sea conditions so good the area is very favourable to pirates right now. Nowhere off the coast of east Africa is safe," he said.

US suffers deadliest Afghan month

Deaths come as newspaper reports senior diplomat's resignation over growing conflict

The US has suffered its deadliest month in eight years of fighting in Afghanistan with the deaths of eight American soldiers today in bomb attacks in the south of the country.

A total of 55 American soldiers have been killed in Afghanistan this month, nearly half of them in recent days.

The surge in deaths comes as President Barack Obama considers a request from the Nato commander in Afghanistan, General Stanley McChrystal, for tens of thousands more troops. It was also revealed that a senior American diplomat in Afghanistan has become the first US official to resign over a war he says is only being perpetuated by the presence of foreign troops and international support for a corrupt, unpopular government.

In one attack, seven Americans were killed in what the military called "multiple, complex" bomb attacks on their armoured vehicle in Kandahar province. An Afghan civilian also died. An eighth soldier was killed elsewhere in Kandahar.

Yesterday, a US military helicopter crashed while flying back from a raid on Taliban drug traffickers in western Afghanistan, killing 10 Americans including three Drug Enforcement Agency agents. In a second crash on the same day, four soldiers were killed when their helicopters collided. The military said that neither crash was the result of an enemy attack.

The rising death toll is likely to further undermine diminishing public confidence in the conduct and purpose of the war. A former senior official has joined the questioning after resigning as a top diplomat in Afghanistan.

Matthew Hoh, a former marine captain who fought in Iraq and was posted to Afghanistan's Zabul province where the Taliban is strong, questioned the purpose of the war and said that many Afghans were fighting only because foreign troops are in their country.

"I have lost understanding of and confidence in the strategic purposes of the United States' presence in Afghanistan," he wrote in a four-page resignation letter last month, obtained by the Washington Post. "I have doubts and reservations about our current strategy and planned future strategy, but my resignation is based not upon how we are pursuing this war, but why and to what end."

Hoh said that while he regards the Taliban as a malign presence and that al-Qaida in Pakistan needs to be confronted, the US is now involved in what is essentially a civil war. He concluded that the US is not facing a coordinated insurgency but a series of local warlords and fighters.

"I didn't realise that a group in this valley here has no connection with an insurgent group two kilometres away," Hoh told the Washington Post.

He said there were hundreds, perhaps, thousands of such groups across Afghanistan, most with few ideological ties to the Taliban but resistant to foreign troops. "That's really what kind of shook me," he said. "I thought it was more nationalistic. But it's localism. I would call it valley-ism."

The Washington Post reported that Hoh is highly valued and senior US officials attempted to persuade him to stay. The US ambassador in Kabul, Karl Eikenberry, offered him a senior post at the embassy but Hoh declined. The American special representative for Afghanistan and Pakistan, Richard Holbrooke, said that he agreed with much of Hoh's analysis although not his conclusion that the war "wasn't worth the fight".

Holbrook invited Hoh to join his office by arguing that if he really wanted to affect policy then why not be "inside the building, rather than outside, where you can get a lot of attention but you won't have the same political impact?"

Hoh was initially persuaded and accepted the post but backed out a week later. He said he decided to speak out publicly because "I want people in Iowa, people in Arkansas, people in Arizona, to call their congressman and say, 'Listen, I don't think this is right.' "

Karadzic 'predicted bloodbath'

Prosecution reveals transcripts of phone intercepts at opening of trial as ex-Bosnian Serb leader boycotts second day

Radovan Karadzic threatened months before the start of the Bosnian war that 300,000 Muslims would die while the forces under his command turned Sarajevo, into a "black cauldron".

He told colleagues that Bosnia's Muslims would "disappear from the face of the Earth" and said he had up to 400,000 Serbs under arms awaiting his orders and 20,000 men ready to besiege Sarajevo.

The warnings from the Bosnian Serb leader were heard at the Yugoslav war crimes tribunal in The Hague today as Karadzic went on trial for genocide and war crimes 14 years after the end of the conflict.

For a second day running, the accused shunned the proceedings on the grounds that he was not yet fit to conduct his own defence. The presiding judge, O-Gon Kwon, of South Korea, ordered the case to proceed despite the boycott.

The US lawyer Alan Tieger, leading the prosecution, delivered several hours of graphic evidence against Karadzic, including transcripts of telephone intercepts in which the warlord threatened the Muslim community with extermination should Bosnia declare independence from Yugoslavia.

"There are 3-400,000 armed Serbs in Bosnia-Herzegovina ? It will be a real bloodbath," Karadzic predicted.

The warnings came as the war between Serbs and Croats raged in Croatia in the autumn of 1991, well before the outbreak of war in Bosnia in April 1992.

Tieger painted a picture of a "supreme commander", Karadzic, who enjoyed total control of Bosnian Serb politics, parliament, police, paramilitary forces and the army for the duration of the 44-month war. He sought to portray Karadzic as a cold-blooded monster who systematically and methodically planned the war well in advance and then conducted it to the letter.

At the end of the war, in the summer of 1995, the accused boasted he had ordered the mass murder of more than 7,000 Muslim males at Srebrenica, Tieger said. Karadzic told a closed session of the Bosnian Serb parliament a few weeks after the massacre that he had signed "directive number 7" authorising it, the court was told.

"I was in favour of all decisions made and I support them. The time had come," Karadzic told the assembly, according to Tieger.

The presentation of the prosecution case came amid a test of strength between the judges and Karadzic. Although he spurns defence lawyers, Karadzic has a team of around 40 legal experts and lawyers assisting him behind the scenes and has filed some 400 motions on various issues to the court since being detained.

O-Gon said Karadzic was entitled to defend himself but that this right was "not absolute" and he may have forfeited that right by his boycott. The judge said he may impose defence lawyers on Karadzic next week if the accused persisted in the boycott.

The Karadzic trial is arguably the most important of the tribunal's 15-year existence and may also be its swansong. He faces 11 counts of genocide, war crimes, and crimes against humanity for the Srebrenica massacre, the siege of Sarajevo, the ethnic cleansing of hundreds of thousands of non-Serbs and the seizure of more than 200 UN peacekeepers as hostages.

The aim of Karadzic's campaign, said Tieger, was "to carve out a mono-ethnic state from a multi-ethnic country".

"In July 1990 Karadzic was simply a psychiatrist in Sarajevo," Tieger said, tracing the career of the 64-year-old. "Two years later he was the leader [of the Bosnian Serbs] and controlled 70% of Bosnia's territory."

The prosecutor cited a UN report from 1992 noting that in Karadzic's strategy "ethnic cleansing does not appear to be the consequence of the war, rather its goal". The prosecution repeatedly adduced evidence of extreme Serbian prejudice against the indigenous Slav Muslim population, the biggest community in Bosnia.

Biljana Plavsic, the biologist and Karadzic accomplice who walked free from a Swedish jail today after six years in prison, described the Muslims as "genetically tainted Serbian material who converted to Islam". Ratko Mladic, Karadzic's military chief and fellow genocide suspect, described the conquest of Srebrenica as an opportunity for "the Serbs to avenge themselves on the Turks".

Karadzic was quoted as observing: "Muslims can't live with others. They will overwhelm you with their birthrate and other tricks. We cannot allow that to happen."

Around 50 Bosnian Muslims, mainly elderly women, sat transfixed in the gallery of the court listening to the evidence in translation through headphones. Several wept. Most stared silently into space.

"Our lives are finished anyway," said Munira Subasic, the leader of the women. "This is for the politicians and the leaders who gave the green light. Shame on them."

Michael Jackson's This Is It

Images from the first screening of backstage footage of Michael Jackson's rehearsals for his planned O2 dates earlier this year

'Protesters' on card not all threat

Martin Hogbin, listed as target X on spotter card, was accused of supplying information to firm linked to BAE security department

? Interactive: a spotter card revealed

He was listed as target X, a so-called domestic extremist included on a secret police spotter card as a regular attender at anti-arms demonstrations.

But today it emerged that X was not quite the threat police took him for ? at least to the arms industry. In fact he was an alleged infiltrator from the arms company BAE.

The 2005 spotter card, published by the Guardian this week, contains a photograph of Martin Hogbin, who was national co-ordinator for the Campaign against the Arms Trade. He was later accused of supplying information to a company linked to BAE's security department, but denied the allegation.

When asked about his past today, Hogbin said: "I couldn't possibly comment." He added that he had attended demonstrations because he thought the arms trade was "wrong".

Hogbin is the most unusual of almost a dozen people who have come forward after identifying themselves on the spotter card. The others are a medley of environmental and anti-war activists including an ecologist, an artist, a carpenter, an anti-roads demonstrator and a camerawoman who has challenged her detention by police all the way to the European court of human rights at Strasbourg.

The photos include the Fairford Two, who won an acquittal for breaking into an airbase on the grounds that they were preventing war crimes.

Subject A on the spotter card is Emily Apple, whose apparent mistreatment by police caused concern when the Guardian published a video this year showing her being held by the neck and forced in front of a police camera.

Apple, whose FITwatch group have retaliated by filming and recording pictures of police intelligence gatherers, said today that she was harassed and followed while travelling with her 18-month-old son. "I am not an extremist. I care deeply about an illegal and immoral [arms] trade."

Several of those who have come forward describe being targeted for extensive pursuit around London, sometimes by police making "sarky remarks".

Hogbin was apparently a close friend at the time of the campaigning comedian Mark Thomas, whose face also appears on the card.

Thomas said: "He seemed to be everywhere: getting kicked out of a company annual general meeting, helping to run a mock fire sale of the Iraqi national bank in the City, dressed as a devil on May Day or organising press conferences at the start of the London arms fair. We were friends, I knew his family. He became an integral part of my life."

Democrats push for climate bill

? Obama administration warns of cost of inaction
? Move met with opposition from Baucus and Inhofe

The epic confrontation about how America will power the economy of the future formally got underway today amid stark warnings from the Obama administration of the costs of inaction on energy reform.

Today's hearing, the first of three blockbuster sessions in the Senate, marks a last heave by administration officials and Democratic leaders to advance a bill to reduce America's greenhouse gas emissions before an international climate change meeting at Copenhagen, now just six weeks away.

They were met with strong opposition from a powerful Democrat as well as Republicans on the environment and public works committee.

With the clock running down to Copenhagen, the administration wheeled out four top officials to make the case that failure to act now on climate change would relegate America to lower tier status in the global economy. "When the starting gun sounded on the clean energy race, the United States stumbled," Steven Chu, the energy secretary, told the environment and public works committee. "If we don't choose to begin the development of this new technology, China and other countries will."

American legislation on climate change is seen as essential to reaching a meaningful deal at Copenhagen. But the White House held up action in the Senate on a climate change bill to focus on healthcare reform. The proposed law, which now stretches for more than 900 pages, would cut America's greenhouse gas emissions by 20% over 2005 levels by 2020 and encourage the development of renewable energy sources like wind and solar power. Democratic leaders in the Senate are now struggling to advance a bill - which does not have solid support even among their own party - before the meeting in Copenhagen.

In an ominous sign for those prospects, Max Baucus, who ranks second on the environment committee and chairs the finance committee which will also review the bill, said the proposed 20% reduction target was too steep. "I have some concerns about the overall direction of the bill," he said. "We cannot afford the unmitigated impacts of climate change but we also cannot afford the unmitigated effects of legislation."

For weeks, the White House, Democrats, and environmental organisations have lobbied hard to frame the bill as an economic opportunity.

Obama picked up the theme again in a visit to a solar plant in Florida where he announced $3.48bn in government grants to projects modernising America's electrical grid. In introducing the bill today, Barbara Boxer leaned heavily on an analysis by the Environmental Protection Agency that showed the shift away from oil and coal would cost just 22 to 30 cents a day.

Global warming isn't waiting for who is a Democrat or who is a Republican. Either we are going to deal with this problem or we are not," she said.

John Kerry, who co-wrote the bill with Boxer, said it would usher in a technological revolution akin to the rapid growth of the internet in the 1990s. "We are going to create the equivalent of five or 10 Googles and that is going to drive the economy of our country," said John Kerry, the former presidential candidate who is the other co-author of the bill.

But their arguments appeared to make little headway with Republicans
on the committee. James Inhofe, the Okalahoma Republican who notoriously declared global warming a hoax, called the bill a "temple of doom" which would cost Americans up to $400bn a year.

Some Republicans pressed for investment to build 100 new nuclear plants over the next decade, or to expand offshore oil drilling to meet America's future energy needs. Others argued that America would be damaging its own interests if it embarked on costly energy reforms - while emerging powers like India and China did not.

Footballer spit sparks swine flu fear

? Health Protection Agency say spitting is 'disgusting'
? Carlo Ancelotti not worried about facing flu-hit Bolton

First footballers were told to tuck in their shirts, then to cut out swearing, and now comes their greatest challenge: to stop spitting. While players have carried on spewing obscenities regardless of all official cautions, health officials have warned that failure to stem their streams of saliva will accelerate the spread of swine flu.

The message comes days after revelations of outbreaks of the virus at two Premier League clubs ? Bolton Wanderers and Blackburn Rovers ? and Sam Allardyce's warning that Chelsea could face their own outbreak. "Spitting is disgusting at all times," a spokesperson from the Health Protection Agency said. "It's unhygienic and unhealthy, particularly if you spit close to other people. Footballers, like the rest of us, wouldn't spit indoors so they shouldn't do it on the football pitch.

"If they are spitting near other people it could certainly increase the risk of passing on infections. Certainly, spitting is a nasty habit that should be discouraged ? and it should be discouraged by the clubs."

The HPA official suggested that just as youngsters seek to emulate professionals' dribbles, so too may they copy players' sputters. "It's about setting examples for young people who idolise them," said the spokesperson, who added that footballers should follow the same guidelines as other members of the public by washing their hands, covering their mouth when sneezing and disposing of used tissues: "The advice is catch it, bin it, kill it."

Carlo Ancelotti, meanwhile, said he has no concerns about any potential outbreak of swine flu at Chelsea following their match against Blackburn on Saturday and ahead of their Carling Cup tie against Bolton tomorrow. The Chelsea manager said he swore by a very traditional remedy.

"It is my grandmother's prescription," Ancelotti said. "It's hot milk with red wine. Fantastic. I'm not worried [about swine flu]. My players will shake hands and swap shirts with their opponents as normal, absolutely. The flu is not only on the pitch. It's everywhere. We take all the precautions we need and we think only about playing."

Four Bolton players have so far contracted and recovered from the illness but their manager, Gary Megson, does not believe there is any particular risk in pressing ahead with tomorrow night's tie at Stamford Bridge. That belief appears rooted in opinions at odds with the HPA's warning.

"I've heard varying opinions," Megson said. "I think the one we all need to listen to is that from the medical people, who are saying that it is very difficult, if not impossible, to contract it in that way. They are all OK at the moment but it wouldn't be right to start giving you names."

Robin Budenberg to become UKFI chief

City minister pressures investment banks to reduce underwriting fees as Lloyds looks to raise £11bn in rights issue

One of the most crucial jobs in shaping the future of British banking is to be handed to the wealthy investment banker Robin Budenberg.

An important adviser to the government in last year's bank bailout, Budenberg's appointment as chief executive of UK Financial Investments, the body that looks after taxpayers' stakes in Lloyds Banking Group, Royal Bank of Scotland, Bradford & Bingley and Northern Rock, has still to be cleared by Alistair Darling, the chancellor, who is concerned about the political fallout from appointing a City figure to the role.

Budenberg, a senior banker at UBS, is regarded as the frontrunner to replace John Kingman, the civil servant thought to be on the brink of joining investment bank Rothschild.

His appointment could be confirmed within days. John Crompton, the former Merrill Lynch banker who has joined UKFI in a senior role, is also thought to have been considered for the top job at UKFI, which recently recruited Sir David Cooksey as chairman.

Budenberg is poised to join UKFI at a crucial point. While Northern Rock is expected to be split in two following an announcementtomorrow by the European Union, Lloyds Banking Group is trying to embark on a £25bn fundraising exercise to extricate itself from the government's asset protection scheme.

Fees charged by investment banks for underwriting a proposed multibillion pound cash call by Lloyds have been reduced by £100m after lobbying by the Treasury. Six investment banks lined up to help Lloyds stood to share some £300m fees for supporting the fundraising.

But Lord Myners, the City minister, has put pressure on the big banks to reduce their fees.

He told the Guardian this week that institutional investors and company directors were no longer prepared to pay high underwriting fees.

As owner of 43% of Lloyds, the Treasury would have been determined to secure the best possible terms from the investment banks being lined up by the bank, which was itself trying to cut its advisers' fees.

The City expects Lloyds to embark on an £11bn rights issue ? some £5bn of which will be bought by the taxpayer, which holds shares through UKFI.

. This means investment banks would underwrite the £6bn of Lloyds shares not being bought by the taxpayer.

Lloyds is hoping to secure a final agreement from the chancellor for taxpayer support for the rights issue, which would also be accompanied by sales of certain assets in an effort to raise £25bn.

This is thought to be a large enough sum to convince the Financial Services Authority that Lloyds would have enough capital to survive the recession without the asset protection scheme.

The bank is also awaiting approval from the EU for the state aid that has been poured into the bank.

While it is expected that Lloyds will need to sell off hundreds of branches, a formal decision from the EU is still some weeks off.

UKFI was created in November 2008 by Darling to manage, according to its website, "the government's investments in financial institutions at arm's length and on a commercial basis".

MP appeals against ruling to repay £63,000

Bernard Jenkin, the Conservative MP for North Essex, has appealed against a ruling by independent auditor Sir Thomas Legg that he must repay a £63,000 expenses claim, the largest known demand for repayment made to an MP.

Jenkin, a senior member of the defence select committee, has promised to find the money over time if Legg rejects his appeal. He is believed to have the sympathy of David Cameron on the matter.

Legg ruled that Jenkin must repay the cost of renting a property in his constituency from his sister-in-law. The payments go back to 2004.

Legg has decided that any rental agreements with family members are "tainted" and should not have been allowed.

However, Jenkin had explicitly cleared the rental agreement with the parliamentary fees office director of resources Archie Cameron in a meeting in 2004. He was twice told that the arrangement was acceptable. Archie Cameron had both verbally and in writing told Jenkin to claim against the rented home and was fully aware that the property was owned by his sister-in-law.

Jenkin also wrote to the parliamentary fees office to check what conditions should be attached to the rental arrangement to ensure it was above reproach.

Jenkin has said that he was not aware of the introduction of a family member rule in July 2006, which says "you must avoid any arrangement which may give rise to an accusation that you ? or someone close to you ? is obtaining an element of profit from public funds".

The MP said he first became aware of the rule in 2009 and then contacted the parliamentary fees office, at which point it apologised to him for failing to raise the new rule in their correspondence.

Jenkin's sister-in-law is understood to have given him a discount, reducing the cost to him and, arguably, the taxpayer.

It is still possible that the members estimate committee will consider setting up an independent appeals process to look at Legg's rulings.