HemmersChess

Developers could find it easier to obtain permission to construct homes and schools on contaminated sites

Building on land contaminated by industrial pollution or even asbestos will be made easier after government regulations are published today, experts claim.

The environment department, Defra, is expected to publish fresh guidelines for building on contaminated land to make it easier for developers to get permission for putting up homes or schools on the sites.

But the Chartered Institute of Environmental Health, the professional body for the industry, has said the new regulations would lead to fewer sites having to be treated before they are built on. That will result in "reducing costs, in particular for developers, but at the same time reducing the level of health protection offered … to users of the land," says a briefing document from the institute.

The new rules would "water down" the current science-based risk assessments and rely on a new "qualitative" approach, despite Defra's own consultation admitting "it is inherently difficult to prove causality and there are good science-based reasons to be concerned that some sites pose significant risks from long-term exposures," it adds.

The institute estimates that as much as 300,000 hectares of land would be covered by the new rules – an area greater than the size of Greater London and Birmingham combined.

Mary Creagh, the shadow environment secretary, said: "I am horrified at these proposals which show, once again, how out-of-touch the Conservatives are on the environment. After the forests sell-off and planning fiascos, Ministers now want to make it easier for developers to build on contaminated land.

"Strong environmental protections are key to creating green jobs and healthy, sustainable homes yet the government seems hell bent on destroying them.The collapse in construction is caused by lack of bank lending, and companies hoarding cash and land as a buffer against economic uncertainty rather than these guidelines."

Defra, however, denied the new rules would weaken protection of public health. It said: "We have made clear all along that our intention is to reduce the burden of regulation rather than the environmental outcomes they are designed to achieve. The current system for identifying and decontaminating brownfield sites is currently unclear and difficult to put into practice. We are therefore looking to simplify the guidance available – so we are protecting the environment, ensuring land is safe to be built on and removing unnecessary bureaucracy."

The rules for building on contaminated land were introduced by the last Conservative government's environment minister John Gummer, though not brought into effect in England until 2000.

Since then, nearly 800 sites in England and Wales have been identified as contaminated, including some with homes built on them and one which is now an infant school.

Defra took action after concern rose about how many sites were being left in limbo because experts said there were not clear guidelines for local authorities to decide if the pollution was harmful on serious enough scale.

The Chartered Institute of Environmental Health, CIEH, argues that what is needed is more detailed rulings by the Environment Agency on "how nasty the stuff is and how much of it people especially are likely to come into contact with", especially the Soil Guideline Values which would state how much of a pollutant would pose "significant possibility of significant harm" and so trigger a site to be judged contaminated land.

Its briefing, which claims many local authorities and other professional bodies have also criticised the proposed guidelines, accuses the government of "legislating by the backdoor", and urges MPs to stop them, adding: "it is important that MPs are not seduced by the label 'Guidance' into thinking that this is trivial and that its laying before Parliament is a mere formality, and allow it to be adopted without comment."

The contaminated land guidelines were identified by Defra as part of last year's Red Tape Challenge to all government departments to reduce unnecessary regulations. At that time, Defra said: "the guidance is overly complicated which means businesses and developers face expensive clean-ups that create a burden for the housing industry, put extra costs on homebuyers and fail to achieve the intended environmental benefit. We plan to simplify the guidance to clarify when remediation is needed and how to ensure land is decontaminated to a high standard."Last month the Guardian reported that the cabinet office minister Oliver Letwin, usually a strong supporter of the environment, had proposed that nearly 300 environmental regulations be reduced to 50 pages. Defra and the Cabinet Office would not comment on the claims, but an Environment Agency spokesman said: "The meeting was about simplifying advice to business about environmental regulation and was positive."

Mogul's former deputy tells how bankers planned real estate transactions to revalue $64m in property at $3.2bn

Allen Stanford used fake accounting to prop up his offshore bank in its waning days as withdrawal requests from investors poured in, Stanford's former top deputy has said.

Faced with a worrying number of withdrawals in 2008, Stanford came up with a plan to make a $600m capital infusion into the bank, said James Davis, Stanford's former chief financial officer and the US government's top witness.

Stanford is on trial in federal court in Houston charged with running a $7bn Ponzi scheme from his bank in Antigua. Prosecutors allege Stanford, who has pleaded not guilty, sold fraudulent certificates of deposit and used the proceeds to buy jets, luxury homes and Caribbean real estate.

In the spring of 2008 Stanford's accountants inflated the value of about 1,500 undeveloped acres in Antigua that Stanford had bought for $64m. The accountants planned a series of property transfers to put the real estate back on the bank's books with a value of more then $3.2bn, Davis told the court.
"No actual cash or assets were going into the bank?" William Stellmach, a federal prosecutor, asked Davis. "No, sir," Davis replied.

The transaction was meant to fill a hole left by Stanford's spending, which became apparent as investors took their money out of the bank, Davis said.
But by the end of December 2008 Stanford International Bank had only $88m in cash, far less than the $1bn it claimed to hold, according to documents Stellmach showed to jurors. The US Securities and Exchange Commission seized Stanford's businesses and assets in February 2009.

Davis, 63, said stress related to keeping the scheme going eventually took a toll on his health, causing him both physical and mental problems. "The fraud that I was participating in was killing me," Davis told the jury.

Stanford, the largest private landowner in Antigua and a onetime 20-20 cricket mogul, was known as "Sir Allen" after being knighted by the island's former prime minister.

Stanford was once considered one of the United States' wealthiest people, with an estimated net worth of more than $2 billion. He's been jailed without bond since being indicted in 2009.

He is on trial for 14 counts, including mail and wire fraud, and faces up to 20 years in prison if convicted.

Stellmach asked Davis why, after realizing there was fraud, he continued working for the financier.

"I wanted to please Mr. Stanford. I was a coward. I was embarrassed and he signed my paycheck," said Davis, who told jurors he made $14m in salary and bonuses during his employment.

Davis pleaded guilty in 2009 to three counts: conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a Securities and Exchange Commission investigation. The plea is part of a deal Davis made with the US justice department in exchange for a possible reduced sentence.

Emil Boc says he is quitting to 'release tension' after weeks of protests over austerity measures and alleged corruption

The Romanian prime minister and his cabinet have resigned after weeks of sometimes violent protests over widespread corruption and austerity measures.

Emil Boc said on Monday he was quitting "to release the tension in the country's political and social situation".

During his three-year rule, salaries of state employees were cut by a quarter and VAT increased by five percentage points, while the European debt crisis hit Romania's exports hard.

It was a toxic combination in a country that was already the second poorest in the EU, better off only than Bulgaria, which also joined the union in 2007.

The collapse of Boc's cabinet marks the fall of yet another EU government since the euro crisis started to bite. Since 2009, governments in Slovakia, Slovenia, Greece, Italy, Latvia, Ireland and the Czech Republic have imploded before scheduled elections, with economic woes playing a significant role in each demise. Voters in Hungary, Spain and Portugal also signalled their unhappiness with the fiscal policies of their governments, plumping for new leaders at the ballot box.

President Traian Basescu asked foreign intelligence service head Mihai-Razvan Ungureanu to form a new cabinet. Ungureanu quickly pledged to continue the unpopular economic reforms and his appointment may do little to assuage popular anger.

Basescu named justice minister Catalin Predoiu as interim prime minister until Ungureanu puts his team and plans up for parliament's approval, a vote that will probably come next week.

He will be in charge until the new government is formed over the coming weeks and could potentially hold on to the position until the next general election, in November.

Opposition politicians celebrated Boc's departure and called for early parliamentary elections. "This is a victory for those that demonstrated on the streets," said Crin Antonescu, who heads the opposition Liberal party. The "most corrupt, incompetent and lying government" since the 1989 fall of Ceausescu had gone, he said.

Shortly before his resignation, Boc's approval ratings had dipped below 20%, with thousands of Romanians braving freezing temperatures and heavy snow to protest in towns around the country.

They are angry about low living standards and what they say is widespread corruption in a country where the average wage is less than €350 (£290) a month and some villages and even parts of Bucharest have no running water or electricity.

Septimius Parvu, deputy director of the Pro Democracy Association, an NGO based in Bucharest, said Boc's resignation showed a "slow evolution" in Romanian politics. "The change in government shows that politicians are starting to realise they cannot govern without the people," he said. "They were taken by surprise by the protests, which, even if they were not on the scale of those in Russia, for example, took place all over the country and were the biggest seen in Romania for perhaps 20 years."

But one protester, PhD student Stefan Guga, 26, said it was wrong to characterise Boc's departure simply as a victory for the demonstrators. It also showed very pragmatic political and electoral calculations on the part of both governing and opposition parties, he said.

"Boc has been made a scapegoat," he said in a phone interview from Bucharest. "It's not that his party, the Democrat Liberals [PDL], wanted to get rid of him – but they found it very convenient to push for the prime minister's resignation and attribute much of the government's failures over the past years to his personal incompetence."

Guga, who attended many of the protests in Bucharest's University Square, said Boc's leaving was a distraction from the key demands of protesters, which, as well as a respite from painful austerity measures, were for real democracy and an end to corruption. "For the Democrat Liberals Boc's resignation can be seen as a last-minute solution to save a bit of face before the upcoming local and parliamentary elections," he said.

The reality, he said, was that the PDL will now regroup and hope that they can avoid early elections so that come November, they have a better chance of winning back the electorate. The PDL and its allies currently have a slim parliamentary majority.Guga said that if the protesters wanted to see any politician fall on his sword, it was Basescu, the president, a gruff former sea captain who despite holding a position that is theoretically ceremonial has made many policy announcements himself. "He is seen as the man who really pulls the strings in Romania," said Guga. "The image of Boc was just as Basescu's puppet."

Boc, who became prime minister in 2008, urged Romania's feuding politicians to be mature and rapidly vote for a new government. He defended his record, saying he had taken "difficult decisions thinking about the future of Romania, not because I wanted to, but because I had to".

Explaining his resignation in a televised speech, Boc said: "I took this decision to release the tension in the country's political and social situation, but also in order not to lose what Romanians have won.

"I know that I made difficult decisions, but the fruits have begun to appear. The most important thing is the economic stability of the country. In times of crisis, the government is not in a popularity contest, but is saving the country."

He added that the International Monetary Fund (IMF) has forecast growth of up to 2% this year lower than expected, but higher than the EU average.

Committed at some stage to adopting the euro under the terms of its accession to the EU in 2007, Romania is still struggling with the economic legacy of communist state control.

While not suffering the difficulties that the euro created for leaders in the likes of neighbouring Greece, Romania's government also struggled to finance itself without external support and found itself forced to make brutal cuts that enraged ordinary citizens.

In 2009 it was forced to sign up for a €20bn (£16.6bn) loan with the IMF, the EU and the World Bank to help pay salaries and pensions after the economy shrank by more than 7%. The aid was seen as essential to maintain investor confidence, prevent a run on the currency and keep borrowing costs at sustainable levels, even though its public debt to GDP ratio was the fourth lowest in the EU.

In 2010, the government increased sales tax from 19% to 24% and cut public workers' salaries by a quarter.

The IMF mission chief in Bucharest, Jeffrey Franks, told Reuters: "I see no reason necessarily for this to have a material effect on the aid agreement. We have every expectation the agreement will continue."

Paul Ivan, research assistant at the Centre for European Policy Studies, said the resignation was not a surprise. "There had been repeated calls for this," he said in a phone interview from Brussels. "The population had become increasingly unhappy with the austerity policies of the government."

But Ivan said Romania's economic problems were not just caused by domestic policies but external ones too. "Romania's economy is very reliant on the fortunes of the rest of the European Union. So when growth in other countries practically stopped, exports decreased and firms here started to lay off staff," he said.

Romania's textile and car industries have been particularly hard-hit, he said. French carmaker Renault has a big Romanian plant which produces the Logan under the badge of its Romanian subsidiary, Dacia.

Most of Romania's banks are also foreign-owned, said Ivan, meaning that when the debt crisis dug in, they were ever more reluctant to issue loans and mortgages.

Study of 700 town centres showed more than 30% of shops in Stockport lie empty against 6% in Cambridge

A stark north-south divide is laid bare by a study published on Tuesday of shop vacancy rates which shows towns and cities in the Midlands and the north are being hardest hit by the high street downturn.

The highest number of shuttered shops was counted in Stockport where more than 30% are now empty, according to a report by the Local Data Company (LDC). The picture is also grim in Nottingham, Grimsby, Wolverhampton and Blackburn, where the vacancy rates increased and at least one in four stores are closed, according to the study of 700 British town centres.

The LDC director, Matthew Hopkinson, said that although the number of empty shops had "stabilised" at a national level in the last six months of 2011 the outlook was bleak: "The stable top line rate hides the significant breadth of town centre vacancy rates up and down the country. The odds are stacked against a positive take-up of shops and as such the new reality of 48,000 empty shops is here to stay unless an alternative use or purpose can be found."

The national vacancy rate edged down slightly from the 14.5% recorded in the first six months of 2011 to 14.3% in the second half. When broken down the headline figure is worse for Scotland and Wales, at 15.4% and 17.3% respectively, than England, where it is 14.2%. The shopping parades of the south and west fared best with Taunton, Salisbury and St Albans enjoying a vacancy rate of less than 9%. The most vibrant centre was Cambridge with a rate of 6.4%, although that masked a near 4% deterioration in the second half. There were also "extremes" of performance, with Swansea suffering a 15% jump in vacancies whereas Slough saw a 12% decline.

Last year the government asked TV presenter Mary Portas to come up with plan to save the high street and her subsequent report made 28 recommendations including "town teams" to lead community regeneration projects and the relaxation of planning laws to allow defunct stores to be turned into gyms, creches and bingo halls. The first step to implementing her ideas came last week when Grant Shapps, the local government minister, launched a competition for a dozen towns to become "Portas pilots" with the chance to share in a £1m pot to revitalise their "unloved and unused" high streets.

The traditional high-street store model is unravelling as the growth of the internet and huge out-of-town supermarkets selling everything from groceries to sofas, clothing, and CDs, suck sales out of town centres.

Official data shows that the proportion of retail spending captured by the high street has fallen from nearly 50% in 2000 to 42.5% and is expected to drop below 40% by 2014. At the same time online sales have doubled over the last decade to make up 10% of retail sales. "Is it any wonder that vacancy rates are rising?" said Hopkinson. "Technology is driving consumer behaviour to a world of engagement, entertainment and the ability to shop where, how and when we like."

Some senior industry figures believe the government is wasting its time trying to resuscitate high streets and should consider radicalalternatives such as redeveloping shops as houses. Last week Phil Wrigley, a veteran retailer who has held directorships at New Look, Debenhams and BHS, said many shopping streets were "in a death spiral" and "irrelevant to the needs of shopping today", and likened their fate to the shipbuilding industry.

The pace of high street closures is expected to accelerate as it is estimated that about 50% of the country's shop leases expire over the next seven years, giving struggling chains the opportunity to retrench from the weakest trading locations.

The British Council of Shopping Centres estimates that a fifth of UK shopping malls are in difficulties with about 20 smaller centres up for sale.

Greece has stalled on meeting terms for a €130bn rescue package, we look at what the problem is and what can be done

Why have talks stalled?

The Greek government has failed to agree on a package of spending cuts and tax rises that representatives of the EU, IMF and the European Central Bank (ECB), known as the troika, insist must go ahead before they sanction €130bn of rescue funds.

Why does Greece need the money?

Greece has borrowed around €350bn from private sources to keep its public finances afloat. Some is from its own banks, some from Greek savers, but the bulk is from overseas banks and the ECB. In a few weeks' time loans worth €14.5bn face renewal. The troika is prepared to lend the cash if a deal is in place.

Who in Athens is blocking a deal?

Greece is under a coalition of one social democratic party (Pasok) and two rightwing parties (New Democracy and Laos) led by a team of technocrats, with Lucas Papademos as prime minister and chief technocrat. The two rightwing parties are credited with preventing further cuts in wages.

Is the troika giving ground?

There is some pressure from the IMF to ease up on calls for spending cuts and to emphasise more long-term structural reforms. However, Brussels, with the support of the ECB and Germans, is sticking to its hard line.

And private banks?

Parallel talks with private creditors have centred on the bulk of outstanding loans. A group representing banks with €205bn of Greek debt is prepared to write off 70% of their value, but only if the troika package of cuts is in place.

What if Greece goes bust?

Papademos is examining the fallout from a default. It would wipe out its debts, but almost certainly lead to its ejection from the euro. Advisers in Brussels have warned that such a nuclear explosion in Athens cannot be contained. They say contagion will spread to Portugal, Spain and Italy.

Why would other states be affected?

If Greece is cut loose then US, Chinese and EU banks will withdraw their funds immediately from other vulnerable countries The solidarity expected of the eurozone will be undermined. Portugal is running out of money faster than expected and will probably need a bailout too. If Greece goes under, it could precipitate a run on Portuguese financial institutions. Italy and Spain are vulnerable, as is Ireland.

The EU needs a growth compact, not a fiscal one. Swift action on tax and jobs is the way out of the crisis

Overspending by governments, we have been told, triggered this crisis. The cure thus lies in immediate austerity, hence last month's German-led push for a eurozone fiscal compact and the UK's pursuit of similar policies.

But, as demonstrated by the experiences of Greece, Portugal and Spain, this course leads to biting, deep recessions and worsens public indebtedness. The IMF acknowledged as much last week. A focus on growth, not austerity, is the correct answer for Europe's ills.

The case for "growth-friendly austerity" relies on the argument that public cuts are compensated for by consumers and businesses spending more, and with greater efficiency. However, the collapse of confidence wherein everyone expects the economy to worsen before (if) it gets better, along with excessive levels of private indebtedness, means that consumers and firms are busy repaying debt or building rainy-day funds, not spending and investing.

When EU leaders next meet on 1 March, they must adopt a binding pledge to increase growth-enhancing public investments in the EU, outlining a firm strategy for funding these – in effect, a growth compact.

The axe of austerity falls first and foremost on public investment, as it is easier to cut than other forms of public expenditure. This undermines current growth by shrinking the level of economic activity, and also jeopardises the potential for future growth. Every euro of cuts today could result in many euros of lost growth.

Most important, the focus of efforts to reduce public indebtedness should be on raising tax revenue, not cutting spending. Increasing consumption or employment taxes may be counterproductive when consumer spending is depressed and unemployment high, but other taxes have a less negative effect on growth, even in the short term. The taxation of property, land, wealth, carbon emissions and the under-taxed financial sector needs to be increased across the EU. Dividing this revenue between public investment, deficit reduction and cutting income tax for low earners would boost both growth and employment.

EU states also need to redouble efforts to crack down on tax evasion and avoidance. Greece and Italy (which have large "black" economies) as well as France, Germany and the UK have enacted recent measures to increase compliance. The results are mixed, since domestic measures that have squeezed the tax avoidance balloon at one end have inflated it at the other. London, a haven for the rich rascals, is now adding southern Europeans to its mob, but Greek and Italian money is also flooding into Germany.

Sharing and implementing the most effective anti-tax avoidance/evasion strategies across all EU countries and an agreement to help other members enforce their domestic measures would multiply the revenue from such crackdowns. Urgently renegotiating the EU savings tax directive, that at present captures less than 1% in annual tax revenue on untaxed wealth transferred to other EU members, would also provide a big boost to revenues to fund public investments.

EU member states must use its status as the largest economic area in the world to aggressively negotiate under the banner of the EU and strike much better deals with tax havens so tax losses can be minimised and past, unpaid taxes clawed back.

The UK-Liechtenstein and German-Swiss bilateral deals, on the fate of untaxed UK and German money in these tax havens, have been rightly criticised as being very weak. The US has used its weight as the largest economy in the world to negotiate a much better deal for its tax collectors. This is what the EU must do. Also, the US, under its foreign account tax compliance act, obliges EU banks to share data on accounts held by US citizens. The EU must immediately push for reciprocal arrangements.

Doubling the capacity of the European Investment Bank, which has an excellent record of providing credit to the employment-intensive smaller business sector, would need less than €40bn of up-front cash, and generate investments of 10 times that amount.

Finally, the structural reforms in crisis countries must continue and the liberalisation of services in the single market must be accelerated. These policies will help boost future growth but work best in a growing, not shrinking, economy. Without a growth compact, the social and employment crises in Europe will only get worse. With it, we have a fighting chance to emerge stronger.

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• Exasperated Angela Merkel warns 'time is of the essence'
• Portugal's PM says 'we will not allow it to happen here'

Greece appeared intent on taking make-or-break talks over a €130bn (£108bn) rescue programme for the debt-choked country down to the wire tonight as officials announced that the discussions would be delayed.

Confounding market expectation and European hopes, the government said agreement over the conditions attached to further aid could not be reached as a meeting between political chiefs and the prime minister, Lucas Papademos, had been deferred until today.

"All parties have basically accepted the deal," said a well-briefed source, referring to the three elements in Papademos's national unity coalition. "But it is felt that the details have to be fine-tuned. The leaders want to know what they are signing up to."

With Greece staring at the spectre of bankruptcy – barely six weeks before it has to make bond repayments worth €14.5bn – EU officials expressed disbelief that politicians could not finally put their name to an accord.

Unable to conceal her own exasperation, the German chancellor, Angela Merkel, said: "I honestly can't understand how additional days will help.

"Time is of the essence. A lot is at stake for the entire eurozone," she said after holding debt crisis talks in Paris with the French president, Nicolas Sarkozy.

Papademos, a technocrat who was appointed to the post with the express purpose of passing the measures to secure the bailout deal, originally told the leaders to conclude talks by midday.

But the deadline came and went. Infuriated, Amadeu Altafaj-Tardio, a spokesman for the European economic affairs commissioner Olli Rehn, said: "The truth is we are already beyond deadline … the ball is in the court of the Greek authorities."

Hours later, the prime minister's office announced that the meeting would take place in the "late afternoon". Rumours swirled that a deal was near, with headway made on the highly contentious issues of wage cuts in the private sector. In anticipation, the Athens stock market rallied.

By mid-afternoon, however, the meeting had been cancelled with officials saying Papademos would instead hold talks with visiting inspectors from the European Union, European Central Bank and International Monetary Fund, the "troika" propping up the insolvent Greek economy.

The postponement confirmed that ahead of general elections in April the high-stake talks have also been turned into a high-stakes game of brinkmanship.

Acutely aware of the uproar that further austerity is bound to ignite among a populace that has endured unprecedented belt-tightening but seen little in return as Athens repeatedly misses fiscal targets, Greece's political class has worked furiously to disassociate itself from reforms increasingly seen as counter-productive.

Emerging from a marathon session of similar talks on Sunday, Giorgos Karatzaferis, the media-savvy leader of the populist Laos party, said: "I'm not going to contribute to the explosion of a revolution [by backing] a wretchedness that will then spread across Europe."

Racheting up the pressure on politicians, powerful unionists in both the public and private sector warned that the reaction to any agreement entailing further austerity would be "ferocious and possibly uncontrollable". A general strike was called for Tuesday with civil servants and workers saying they would step up action later in the week.

Ilias Iliopoulos, at the civil servants' union ADEDY, said: "We don't care if they feel forced to accept such measures. The fact is 500,000 families are not even earning a euro a week and another million only have work sporadically."

"Greek people can't take the burden of any more measures. If our politicians are foolish enough to agree to what our so-called saviours say, if they go ahead with yet more cuts and job losses, there will be an explosion. The reaction will be uncontrollable."

The deadlock immediately raised fears that three years into the crisis, Greece might finally be heading for the disorderly default international creditors, lead by Germany in the EU, have tried to avert.

But in Athens analysts insisted that the real threat to keeping bankruptcy at bay lay not so much in the negotiating arena as in a society seething with anger over the prospect of more austerity.

"The Greek side has no cards in its hand," said Theodore Pelagidis, professor of economics at Piraeus University. "This is not about not accepting the bailout but about politicians wanting to convince Greeks that they have not just submitted to the demands of foreign lenders but done their utmost to get the best deal. Yes, there are a lot of painful details that have to be discussed but all these delays are actually part of a show."

Eurozone finance ministers have told Greece that they want a blueprint of a basic deal to be approved by Wednesday's meeting in Brussels.

No longer willing to take any chances, Papademos on Monday ordered the finance ministry to outline what consequences bankruptcy might have on society and the economy. One Greek official said it would make Argentina "look like a picnic".

Papademos's plan is to present the findings to Greece's squabbling political leaders on Tuesday to ensure they sign off on the deal immediately.

As Greece failed to resolve its crisis, the Portuguese prime minister attempted to stave off speculation that his country would be the next to find itself in talks over a rescue package. Pedro Passos Coelho said Portugal's debts were under control and could be contained without the need of a fresh injection from the EU.

"We will not allow what happened in Greece to happen here," he said. "We hope that there will be the will to reach a new aid programme for Greece."

Coelho likened Portugal to Ireland, which he said had a debt structure that would delay the need for loan repayments until next year. "Our debt profile is very similar to Ireland's, both in absolute value and in debt to GDP terms," he said.

£50bn merger with Xstrata will be latest City coup for billionaires behind commodities trader

More than £50m of World Food Programme aid to feed the starving has ended up in the hands of a London-listed commodities trader run by billionaires, despite a pledge by the United Nations agency to buy food from "very poor farmers".

Glencore International, which buys up supplies from farmers and sells them on at a profit, was the biggest single supplier of wheat to the WFP over the last eight months, the Guardian can reveal.

Glencore, which was able to operate with secrecy from its base in Baar, Switzerland, until it floated on the London stock exchange last May, is expected on Tuesday to announce a merger with mining group Xstrata to become one of the 10 biggest FTSE 100 companies with a market value of more than £50bn.

Details of the dealings with Glencore, which controls 8% of the global wheat market, emerged a year after the head of the WFP committed to buying food from local farmers.

"Our new motto is to help people feed themselves," Josette Sheeran, the executive director of the WFP, told China's state news agency. "When we can, we purchase our food from the very poor farmers who suffer because they are not connected to local markets."

Raj Patel, an economist expert in the global food trade and former UN employee, said it was shocking how much food aid money was "funnelling to one of the largest commodity traders".

The rising price of wheat has squeezed the incomes of millions of the world's poorest people. Many have been forced to turn to the WFP, which last year fed more than 90 million people in 73 countries.

Over the last eight months Glencore has sold wheat worth $78m (£50m) to the WFP, according to details of contracts published on the agency's website.

In the biggest single deal, the WFP bought $22.5m of Glencore wheat in July last year to feed Ethiopians in one the worst famines in recent memory. The WFP also bought Glencore wheat, sorghum and yellow split peas for Kenya, Djibouti, Bangladesh, Sudan, North Korea and Palestine. Last month the WFP spent $10.8m on wheat for drought-stricken Djibouti.

In its latest half-year financial results Glencore, which previously attracted controversy for environmental breaches and accusations of dealing with rogue states, including Iraq under Saddam Hussein, reported that revenue from agricultural products doubled to $8.8bn. The company said its performance had been "driven by stronger profits in grains and oil seeds" for which "prices were substantially higher in H1 [the first half of] 2011 compared to H1 2010".

The company said: "There were increased geographic arbitrage opportunities [buying commodities cheaper in order to sell them on later at a higher price] available in wheat and edible oils." It said the average wheat price of a bushel [8 gallons] of wheat increased by 60% over the previous year to $778.

A spokeswoman for the WFP said: "As a humanitarian agency that depends entirely on voluntary donations we always aim to get the most competitive price when purchasing food on the open markets. Rising food prices do have an impact on our budget and they can be driven up by any number of factors, including speculation."

Glencore said it won the WFP tenders because "we were able to offer the commodities needed at the lowest possible price".

Rob Bailey, a senior research fellow in food security at Chatham House in London, said the WFP often buys from traders such as Glencore, Cargill and Viterra, because food donations are not available and local farmers cannot provide the quantities needed. "It is concerning that the World Food Programme is left at the whim of international markets precisely when prices are high," he said.

"Such crisis periods of high volatility are also when the big traders make the most money, because they have the best information on likely supply and demand and how markets are going to evolve, allowing them to take positions in the market to turn profits."

John Hilary, the executive director of the War on Want, said: "Glencore's self-confessed speculation on grain markets last year forced up prices at a time of world shortage, driving more people into extreme hunger. The WFP needs to rethink its priorities and support local markets rather than corporate giants such as Glencore."

Patel, the author of Stuffed and Starved: Markets, Power and the Hidden Battle for the World's Food System, said: "It's a shocking amount of money to be funnelling to one of the largest commodity traders. That financial entities are now making their presence felt – and Glencore is among the most powerful of these new corporations – points to the increasing financialisation of food in the 21st century."

Glencore admitted that it bet on a rising wheat price after drought in Russia, according to investment bank UBS. "[Glencore's] agricultural team received very timely reports from Russia farm assets that growing conditions were deteriorating aggressively in the spring and summer of 2010, as the Russian drought set in … This put it in a position to make proprietary trades going long on wheat and corn," UBS said in a report to potential investors, disclosed by the Financial Times.

On 3 August 2010 the head of Glencore's Russian grain business, Yury Ognev, urged Moscow to ban grain exports, according to the UBS report. Two days later Russian authorities banned wheat exports, which forced prices up by 15% in two days.

On Monday Glencore said UBS's account of its role in the Russian grain crisis was "simply untrue. In any case, the export ban did not help our business".

A spokesman said: "We share the view that financial speculation in agricultural products markets can be harmful. Our business is physical – we produce, buy, store and blend agricultural commodities.

"We bridge the gap between harvests that last for a couple of weeks and demand which is fairly constant throughout the year.

"Because we are physical holders, we are always net sellers in the agricultural products futures markets which actually has a downward effect on the prices of agricultural products futures."

Glencore's chief executive, Ivan Glasenberg, earned the moniker "the $10 billion man" when his stake was valued at £5.76bn at last May's flotation. Four other partners – Daniel Maté, Telis Mistakidis, Tor Peterson and Alex Beard – were also made paper billionaires. More than $3.6bn was given to the WFP last year, with the US contributing $1.2bn and the UK £144m.

Merger deal anticipated

Glencore is on Tuesday expected to announce plans to merge with mining group Xstrata to become one of the 10 biggest companies listed on the London stock market. It will be the latest move in Glencore's journey from secretive trading house founded by Marc Rich, a commodities traderwho was charged by US authorities with selling oil to Iran during the 1979-81 hostage crisis, to global powerhouse in the sale of commodities from copper and coal to sugar and wheat.

The largest shareholder in the combined company – dubbed Glenstrata – will be Ivan Glasenberg, Glencore's multibillionaire chief executive. But Glasenberg, who makes so much money he indirectly funded a generous Christmas tax break for the other residents of the Swiss village where he lives, is understood to be planning to step aside to become deputy to Mick "the miner" Davis, the head of Xstrata.

Davis, already one the highest paid executives in the FTSE 100, is likely to be offered a "golden handcuffs" deal to stay at the company. A change of control clause could also see Davis collect an additional £10.7m in long-term shares.

The deal is likely to see Glencore pay about an 8% premium to buy up the Xstrata shares it does not already own.

Sir John Bond, Xstrata's chairman and a former chair of HSBC and Vodafone, will lead the Glenstrata board, while Glencore's chairman Simon Murray, who has been attacked for his "unbelievably primitive" views on women in business, is likely to step aside.

Tony Hayward, the former boss of BP, is likely to be appointed the senior independent director of the combined company, which will have more than 120,000 staff across five continents.

When the moment of maximum danger came, Brown had the right diagnosis and did largely the right things

It must be the most famous slip of the tongue in Westminster's recent history. Just before Christmas in 2008, Gordon Brown stood up at prime minister's questions and stumbled through a defence of his rescue of the banks that came out as "We not only saved the world …", before being drowned out by derision from the MPs opposite.

Cue Lord of the Flies-style baiting from David Cameron's Tories. Cue insta-comment from the pundits who, just three months after Lehman's collapse, were already ravenous for normal Commons fare. Yet Brown's mis-statement wasn't so wide of the mark. Despite the mocking, and the political obituaries that marked his historic defeat at the general election, the evidence suggests that the last Labour prime minister is in with at least half a shout of keeping the world economy afloat in 2008-2009, and an excellent claim of having saved the UK.

Not that you'll get to hear much about the actual evidence elsewhere.

Commentators routinely wrap up the son of the manse's entire record in government as "the Brown Terror" (Jeff Randall); write him off as "unreliable and dishonest" (the economist Tim Congdon); or simply "a terrible prime minister" (Andrew Rawnsley). Some of these criticisms are justified; others are just barking, like that bloke who still yawps away on the Spectator website about the sale of the gold reserves in 1999.

Out of power, Brown doesn't have many public defenders left. The careerists have scarpered, and the man himself is almost invisible. Not for him the usual New Labour afterlife: Blair's mysterious Faith Foundation or David Miliband's habit of writing articles for the New Statesman so banally opaque that the only question they prompt is "what did he think he meant by that?"

But if we correct the account of those two years, it not only makes for fairer history; it recasts some of the biggest current political controversies. Labour politicians might at last be able to qualify the story that all their government did was leave the country a massive overdraft – that amid the biggest crisis since the 30s, they made largely the right calls while the Tories got it largely wrong. Even more important, it could open up the stiflingly narrow debate over how Britain should respond to a looming second recession.

So cast your mind back to the weeks and months after Lehman went down. Financial markets were freezing up. The world economy was going into cardiac arrest. In Britain, there was a very real prospect on some nights that cash machines wouldn't open in the morning.

What sticks out about that period is how Brown and Alistair Darling were not only acting without a roadmap, they were driving with Cameron and Osborne right on their bumper telling them to do a U-turn. The diagnosis that British banks were dangerously low on capital was correct – but it was the opposite of what most bankers were saying.

The decision to put government money into stricken banks was exactly the policy that Bush and his treasury secretary Hank Paulson had pooh-poohed. In the end, however, the US and others copied the British plans. As Nobel laureate Paul Krugman remarked: "Brown and Alistair Darling have defined the character of the worldwide rescue effort, with other wealthy nations playing catch-up." And how Brown was sneered at for cajoling other governments to pump money into the world economy. How the Tories leapt upon Germany's denunciation of his policies as "crass Keynesianism" – then kept mum when Angela Merkel launched her own massive budget stimulus. The $1tn deal brokered by the British government at the G20 summit in 2009 was described by the World Bank as "having broken the fall" of the global economy.

None of this is to deny Brown's own role in presiding over the boom that led to a bust. Or to forget his relative slowness to tumble to the seriousness of the crisis in the summer of 2008 (then again, so was Mervyn King – and he still got a knighthood). It is simply to observe that when the moment of maximum danger came, Brown had the right diagnosis and did largely the right things. This is as close as contemporary, otherwise Lilliputian, politics comes to heroism.

The same goes for that most controversial of Brown's policies as prime minister – to offset a global recession by cutting taxes and creating jobs for young people. That decision has never got the credit it deserves. As the former Bank of England policy-maker Danny Blanchflower notes in the most recent New Statesman, the budget stimulus led to Britain's economy actually growing 3.1% between the autumns of 2009 and 2010. Under the coalition in the year afterwards, it grew 0.3%.

We can argue over the details of the Brown bailout, but the big lesson is: governments can stem mass joblessness and banking crises. It's a lesson the Tory anti-statists just don't want to learn, and that Labour is now too diffident to make. Economists widely expect a double-dip recession this year, and yet Osborne and Cameron prefer to tinker with red tape. It's safe to say that this prime minister would never make the mistake of claiming to save the world; but he's already made the much bigger error of sitting on his hands.

The market ideology of the health and social care bill shows that the pragmatic prime minister is on another planet

Andrew Lansley's last refuge is his most disreputable argument so far: his health and social care bill must pass as so much has already been implemented without waiting for royal assent. None can recall such flagrant flouting of parliament.

All but abolished are 151 primary care trusts – replaced by 279 clinical commissioning groups – while strategic health authorities are to become four hubs. The new national commissioning board already has a chief executive and finance director with seven board members recruited on salaries of up to £170,000 before the bill is passed. Brass plate shifting has squandered £2bn, while the NHS suffers cuts of £20bn. McKinsey and KPMG already have fat contracts to take over much commissioning supposed to be done by GPs. Which sector will they instinctively favour for contracts? Yet none of it has yet passed into law. The health economist Professor Kieran Walshe says £1bn could still be saved by stopping it now.

"Too late," the health secretary says with grim glee, and Lansley's alarmed party believes it's so. Of course it's not and the bill could be withdrawn. A U-turn would be greeted with guffaws by the opposition, but that would be less politically dangerous than the cataclysm likely to engulf the NHS shortly. Andrew George, the Lib Dem MP and member of the health select committee, puts it like this: "It will now cause havoc either way, but going ahead is even more catastrophic".

The government has gone to the extreme remedy of the law to resist the information commissioner's instruction that the risk register on the bill should be published. If leaks to Dr Eoin Clarke's website prove correct, the main risk is of costs becoming unaffordable as private companies siphon off profits and GP commissioners lack the expertise to control costs. The risk for David Cameron is that this will finish him. Those great big posters declaring his devotion to the NHS will be reprised over and over as the health service becomes his nemesis. Anyone who thinks Cameron is a pragmatist need only look at how he risked all on the marketisation of the NHS: ideology came first.

Opposition is unprecedented as the government scrapes around for support from insignificant medical groups, most with commercial links. The BMA tends to oppose change, from Nye Bevan to Ken Clarke and Blair. But it's remarkable that so many royal colleges are opposed, even the Royal College of GPs, supposed to be a beneficiary. Editors of the three medical journals object. The health select committee, dominated by coalition MPs, issues dire warnings.

In the Lords this week, Lansley is set to concede an important change to his own powers: he wanted devolution and no responsibility, so he need not answer in the Commons to any of the closures and crises about to crash in on him, handing all to the NCB. But Shirley Williams has won the case for the secretary of state to stay fully accountable for providing a universal service, with local commissioners accountable to him.

Joining Williams and the Labour peers is a formidable phalanx of ex-Tory ministers. Crossbencher and doctor Lord Owen has marshalled a powerful case against it for fellow medics. Can they knock out the most pernicious elements? For Lansley will get his bill.

Most toxic is the role of commercial competition, with Monitor acting as enforcer. By opening every NHS corner to "any qualified provider", the whole service can be taken over by private companies, with a few token charities and mutuals. NHS hospitals, cherry-picked of lucrative work, risk bankruptcy when left with only complex cases. Stroke care surged ahead by creating pathways so ambulances take patients to designated units, open on rota, working together. Cancer and heart results improved dramatically, due to collaboration. Commercial competition prevents that – and drains away cash.

Dr Clare Gerada, of the Royal College of GPs, points to Nottingham, where 30 physiotherapy practices are now licensed to trade, breaking the close working with surgeons after operations. "How are patients to choose? By colour of the wallpaper?" she asks. "And how can the Care Quality Commission possibly check the competence of every provider?" The CQC, with a 30% cut, has just 900 inspectors to check 8,000 GP practices, 400 NHS trusts, 9,000 dental practices and 18,000 care homes. NHS instructions say: "Commissioners cannot refuse to accept providers once they have qualified." So the bill opens the NHS to EU competition law. The GP Sarah Wollaston – a Tory MP – rightly calls the bill "a hand grenade thrown into the NHS".

Nothing stops GPs setting up their own private clinics and referring patients to themselves. Sharp practices are already doing it. The Royal College warns that patients will no longer trust GPs, not knowing who has a commercial interest, or a financial incentive to cut costs by denying referrals. Here's a good acronym: GP commissioners must select the Meat – the Most Economically Advantageous Tender. Big companies will cut prices, drive others out and, once dominant, raise prices later. David Owen reveals that private equity investors received a personal presentation on profit opportunities when the NHS is no longer "a state deliverer".

Money will be the immediate crisis. The health economist Professor Alan Maynard heard what others missed: David Nicholson, the NHS chief executive, no longer says £20bn must be cut: now he talks of "up to £20bn". No one thinks it remotely achievable. Stephen Dorrell, head of the Commons health select committee, always said so. The bill is so contradictory that it will end up challenged in the courts. Cameron seems to be on some other planet when he sends out orders to his devolved and fragmented system instructing nurses to check every patient every hour, or calling suddenly for "integration" between NHS and social care, when his bill prevents it.

Will the voters understand? They know one big thing: Cameron promised to protect the NHS, yet hundreds of units will go bust as waiting times soar. Ed Miliband put it crisply: the money wasted could pay for the 6,000 nurses the NHS is cutting. On the NHS Labour did well, eliminating long waits, with its highest ever public approval; the OECD named it the one of the best performers in the world. This is Labour turf. Cameron will regret digging it up.

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Profits before tax slumped to £1.8m in the year to 30 April 2011 from £4.1m year before. Turnover fell to £43m from £44m

Profits at Zaha Hadid Architects more than halved last year as the Arab spring brought several major projects to a halt. A conference centre and a complex of offices and shops in Cairo were put on hold, as was a conference hall in the Libyan capital, Tripoli.

The fall in turnover and profits came during an otherwise highly successful period for the Baghdad-born architect, who has won the Stirling prize for two years running. In 2010 she was awarded the prestigious architecture prize for the MAXXI National Museum of 21st Century Arts in Rome, and last October she won it for the Evelyn Grace Academy school in Brixton, south London, notable for the bright red sprint track that runs through the site.

However, Hadid, whose Aquatics Centre at the Olympic Park in London has attracted controversy after costing three times the original budget, also announced last week she would build the new Central Bank of Iraq headquarters in Baghdad – her first project back in her home country.

Hadid attended the opening of her glittering opera house in Guangzhou, China, with its grotto-like auditorium, last February, and completed the Riverside Museum, Glasgow's new transport museum on the banks of the Clyde – pictured – which opened in June.

However, the series of revolts that swept across north Africa and the Middle East last year took a toll on the financial position of her firm. Profits before tax slumped to £1.8m in the year to 30 April 2011 from £4.1m the year before. Turnover declined to £43m from £44m. Projects completed during that year include the 842m Sheikh Zayed bridge, the fourth bridge that links Abuh Dhabi to the mainland after nearly eight years of construction.

Initially, the firm took on more staff to work on projects in the Middle East and Asia, but when the Arab spring led to a number of projects being stopped it was forced to lay off 76 people. The company now has 288 employees.

The planned 85,000 square metre conference hall in Tripoli is on hold, as are the Stone Towers in Cairo – more than 600,000 sq metres of office, retail and hospitality space. The latter is under review and the firm said it looked forward to restarting the project "in the near future".

The Cairo Expo City project, a 193,000 sq metre development with a large exhibition hall and a conference centre, was also put on hold last spring but will now be going ahead.

One of Hadid's architects who was laid off last year said: "There are amazing amounts of energy. There is chaos, but something comes out of that chaos. When [the firm] does something, it does it well."

TalkTalk customers will be unable to activate broadband until they specify which categories of website children can access

Parents purchasing a new broadband service will have to say if they want their children to have access to porn, gambling, self-harm and other controversial websites.

TalkTalk will provide the service to each new customer from the end of the month, in an industry first praised by ministers determined to slow the sexualisation and commercialisation of childhood.

Under the scheme, new TalkTalk customers will be unable to activate their broadband until they tick a box saying whether they are willing to allow children access to nine sensitive categories of websites, including porn, dating, gambling, gaming, suicide, social networking and weapons and violence. They will be alerted automatically either by email or text if the controls are changed.

Some Christian groups called for regulation of the internet industry forcing rivals to follow TalkTalk's lead. Peter Kerridge, of Premier Christian Media Trust, said: "Our kids are a vital target for those who deal in the world of online pornography."

He claimed that one in three 10-year-olds had stumbled across and viewed pornography online, and 81% of 14-16-year-olds regularly accessed explicit photographs and footage on their home computers and mobile phones.

TalkTalk has already provided parents with the opportunity to block access to websites through its HomeSafe service, but the parent had to choose to impose the controls. So far 240,000 parents have done so.

Under the new scheme, the parent will be unable to access TalkTalk broadband without making a conscious choice on the controls. A spokesman said the service needed as few as five clicks from parents but had required a great deal of technical work to set up.

The children's minister, Tim Loughton, praised TalkTalk and said he hoped other internet service providers would offer similar services shortly. "Through the UK Council for Child Internet Safety we are working with industry and charities to provide tools and information to inform parents and help keep children safe online," he said.

David Cameron has made active parental controls on access to websites one of the top four priorities to emerge from the Bailey review into the sexualisation of childhood. Cameron had been due to meet Reg Bailey last week to discuss progress on the review, now rebranded as part of his responsibile capitalism agenda, but the prime minister was forced to delay due to other commitments.

Research by TalkTalk found that 60% of parents worried that their child might accidentally look at inappropriate content online, and nearly 40% of seven-year-olds and 60% of nine-year-olds had used the internet alone. Fewer than a third of parents (31%) said they were very confident that their child was protected from online threats, and 10% said they relied solely on their own vigilance rather than using security software.

Greek politicians locked in talks with an eye on upcoming elections

Tory party funders are worried David Cameron is running scared or feeding the anti-business mood

No 10 and the Department of Transport will be breathing a sigh of relief that the bosses at Network Rail have decided to forgo their bonuses this year, instead handing the cash to badly needed rail safety improvements – even if in doing so they eloquently demonstrate the trade-off between private affluence and public squalor.

But David Cameron will be worrying that the mob of vengeful public opinion will now race through boardroom after boardroom demanding restraint each time the media or an Opposition politician alights on a juicy pay package.

Stephen Hester, the RBS chief executive, gave in last week, admitting he had misjudged the public mood. In the weeks ahead a host of bankers and semi-public sector executives in the regulated industries will face the court of public opinion as their pay packages are publicised, and scrutinised. Royal Mail, bankers, energy bosses, local authority chief executives, train operating companies, broadcasting organisations, airport chief executives, health trust chairmen, water bosses will all be anxiously talking to their human resources and PR departments to ask what pay levels will be acceptable.

Right-of-centre commentators detect an anti-profit mood. Tory funders are also anxious that Cameron is running scared, or even worse feeding the populist anti-business mood, coming perilously close to a national high incomes policy of the kind Labour governments used to impose on unions in the late 1970s. Michael Spencer, one of the top fundraisers for the Tories and chairman of Icap, the City broker, told the Sunday Times that the row that forced Hester to give up his £1m bonus sent a negative message to the business community. "I think the way Hester was effectively bullied out of his bonus was very negative indeed for the message it sends to the business community at large."

It seems a long time since Britain's executives, with some covert support in the Treasury were openly agitating for an end to the 50p top rate of tax. No 10 seemed to acknowledge its dilemma, stressing it was not going to comment on individual pay packages in the weeks ahead. At the same time, it sent out a message of general restraint, indicating very few generous pay packages are going to receive government support. Transport department officials were also anxious to underline how tough Justine Greening, the transport secretary, had been with Network Rail.

The prime minister's spokesman said: "As a general rule clearly the prime minister is keen to see responsibility and restraint exercised by boards of companies whether they are in the private or public sector. All bits of the public sector should be reflecting on the financial environment and taking responsible decisions."

The spokesman added the government did not want to see rewards for failure, and wanted to see shareholders take greater initiative. Yet in many cases the government is either the shareholder, the provider of subsidy or the author of the regulatory structure. In the case of Network Rail, since 2005 the government has not taken up the option of a seat on the remuneration committee, hardly an example of shareholder activism.

In some of its responses so far it is not clear if the government is opposed to large pay packages per se, or only large pay packages not justified by performance.

In a debate on Tuesday in the Commons called by Labour on banker's bonuses, do not expect Labour to probe too deeply into the criteria that should apply to executive pay.

It will make a general point about the need to stop rewards for failure, call for greater transparency on pay and then propose workers on remuneration committees. Labour knows it scored points on Hester last week, but cannot afford to be seen as anti-business. But it will be a brave Conservative politician in the current climate that gets up to defend business.

The Romanian prime minister, Emil Boc, and his cabinet have resigned after weeks of protests over austerity measures and alleged corruption. Bloc said he was quitting 'to release the tension in the country's political and social situation'. He named the justice minister, Catalin Predoiu, as interim prime minister

A group representing the UK's offshore wind industry plans to ensure more than half the supply chain is UK-sourced

British industries from boat-building to concrete, and electric cabling to gearbox manufacturing are in the line-up to benefit from the construction of thousands of offshore wind turbines, if new plans go ahead.

A group representing the UK's offshore wind industry on Monday adopted a target of ensuring that more than half of the supply chain for offshore windfarms is sourced from the UK. At present, less than a third of the value of the goods and services needed to construct offshore wind farms actually originates in the UK.

The adoption of the new target came as the UK's wind industry faced its fiercest ever assault, from a group of more than 100 Tory MPs calling on the government to cut subsidies for onshore windfarms. Their campaign, in the form of a letter to the prime minister, marked the first crisis for the incoming energy and climate change secretary, Ed Davey, after taking over from Chris Huhne on Friday. Huhne resigned when it was announced he would face criminal charges over an alleged driving offence.

"The UK has created the world's biggest offshore wind market and that should be attracting manufacturers and support companies," said Keith Anderson, chief corporate officer at Scottish Power and co-chair with the energy minister, Charles Hendry, of the Offshore Wind Developers' Forum. "This is a massive opportunity. There has been a lot of investment in offshore wind in the UK, but very little in UK suppliers."

The size of the potential market runs to many billions – the government estimates that at least £200bn in investment will be needed in the whole energy sector by 2020, to overhaul the UK's creaking grid infrastructure, bring power stations up to European standards and meet renewable energy and emissions targets.

Outlining the wider benefits of offshore wind, Anderson pointed to Belfast, where the harbour is being redeveloped as a hub for offshore windfarm construction, at a cost of about £50m. The work will create 150 jobs in construction, as well as requiring about 1m tonnes of stone from local quarries, which will create hundreds more jobs. "It is the first dedicated harbour upgrade for offshore wind," Anderson said.

Under European Union laws, the government would not be allowed to specify that a certain amount of the supplies for offshore wind should be homegrown. However, this initiative is technically one that has come from the industry itself, so it is permissible for the government to endorse it.

But critics pointed out that the target of sourcing more than half of supplies from the UK had no deadline attached, and represented "more of a vague aspiration" than a concrete plan. "It's a nod in the right direction of a strategy, but what is the strategy?" asked one person involved with the industry, who could not be named.

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Chief executive Sir David Higgins says six senior managers will forgo payouts this year and money will be used to improve safety

The head of Network Rail has become the latest taxpayer-funded executive to be forced to waive a bonus after his company announced that he and five fellow senior managers would not be seeking a payout this year.

Sir David Higgins, the chief executive of the state-backed company, was one of six Network Rail bosses who were due to discuss a possible "incentive scheme" at an annual general meeting on Friday. Higgins was expected to collect a £340,000 bonus in addition to his £560,000 basic salary.

The announcement on Monday followed immense pressure from Labour and ministers for executives in publicly owned companies to waive bonuses, following a public backlash over large payments made at a time of stringent government cuts.

Justine Greening, the transport secretary, had taken the unprecedented step of saying she would attend the meeting to oppose the plans. She also planned to tackle the company's "corporate governance" by appointing a special director from the department.

The transport secretary said the firm's decision to rethink a future remuneration scheme was "sensible and welcome".

"I have made it clear to Network Rail at every stage that this proposed package did not go far enough in reflecting the need for restraint," said Greening.

DTI insiders claim that she first told Network Rail's senior figures that they should not expect bonuses in November this year.

"The fact that its executive directors have also chosen to forfeit their annual bonuses to charity is a sign that they have recognised the strength of public opinion," she added.

Labour had accused Greening of failing to use her powers to halt the bonuses altogether. The shadow transport secretary, Maria Eagle said: "It took Labour's intervention to force ministers to take this issue seriously. Justine Greening was still refusing to stand up for the British public and veto this proposed bonus plan when Network Rail managers took the decision for her."

Eagle said the government should now sit down with Network Rail to agree whether a bonus scheme of this scale was appropriate in a company funded by the taxpayer.

"At a time when so many families and rail commuters are being squeezed financially, when fares are rising by up to 13% and the rail network is performing inadequately, it was completely wrong for bonuses of this scale to have been even considered, let alone agreed," she said.

In a statement released by Network Rail, Higgins said the decision to waive this year's bonuses was made last week and that the meeting had been suspended. Instead, future bonus schemes will be discussed at a meeting yet to be scheduled.

The company could not say, however, if Higgins and fellow executives will continue to share in a long-term bonus scheme that could be worth up to £15.6m over the next three years for the rail group's six executive directors. The six will also earn £2.3m a year in salaries plus a maximum of £4.2m in bonuses.

This year's money will instead be diverted to a safety improvement fund for level crossings, Higgins said.

"I and my directors decided last week that we would forgo any entitlement and instead allocate the money to the safety improvement fund for level crossings. I can confirm that remains our intention," he said.

The statement said that the board of Network Rail had decided to recommend to its members that Friday's meeting be adjourned. "The board will take the opportunity to reflect further on how to incentivise performance in the company against the backdrop of the current context. It will continue to consult the secretary of state on wider issues of governance in advance of the government's command paper," it reads.

Network Rail's chairman, Rick Haythornthwaite, said in the statement that Friday's meeting was not to approve a specific annual bonus payment for executive directors, but was supposed to amend a previously approved long-term incentive scheme to ensure additional external scrutiny of performance.

"The issue of annual performance payments would only arise if Network Rail surpassed stretching performance thresholds and would only be decided in May after the end of the financial year."

The development comes a week after Stephen Hester, the chief executive of the Royal Bank of Scotland, which is 83% state-owned, waived a bonus package of almost £1m after a public backlash.

More than 20 MPs have signed a Commons motion saying Network Rail had been "found by the Office of Rail Regulation to be in breach of its licence" and had been responsible for "major asset failures, congested routes and poor management of track condition".

Last week, the company admitted health and safety breaches over the deaths of two teenagers killed at a level crossing in Essex in 2005.

Downing Street said ministers were not permitted to interfere in the "day-to-day running" of the firm, which receives £4bn of taxpayer funding a year and is guaranteed by the government.

But it said it would be looking at its corporate governance in the light of "problems" that had arisen.

Industry sources have accused politicians of using the issue of bonuses as a political football. "It is ridiculous. We are at risk of losing some our best brains because of a political witchhunt," the source said.

Top banks had pledged to lend £190bn in 2011 with £76bn earmarked for funding small businesses

On 9 February last year, Project Merlin was finally agreed between the banks and the government. It was intended to cool the political temperature in the banking industry but instantly led to a high profile resignation – Lord Oakeshott, the Liberal Democrat peer who spoke for his party in the Lords on Treasury matters. At the time, Oakeshott said, with reference to the chief executive of Barclays: "If this is robust action on bank bonuses, my name's Bob Diamond."

With the 2011 bonus season now underway and the banks all preparing to report results for 2011, how does the Merlin report card stack up for Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group?

• Lending: The banks pledged to lend £190bn in 2011 – up from £179bn in 2010 – some £76bn of this was to go to small businesses. The Bank of England will publish the official verdict on Monday but Royal Bank of Scotland, bailed out by the taxpayer, admitted last Friday that it had not met all its targets. Data from the Bank of England showed that up to the end of September banks were £1bn behind.

Lending was also supposed to have an influence on bosses' bonuses – whether this has been the case might become more apparent in the coming weeks when the banks publish the annual reports which contain details of directors' pay.

• Pay and disclosure

The banks promised their 2010 bonus pools would be lower than 2009. They also promised to publish the pay of the five highest "senior executive officers". This description proved controversial. HSBC illustrates this. For 2010, under Hong Kong listing rules HSBC's five "highest paid individuals globally" received a combined £34.3m. But, under the Project Merlin disclosure the "five highest paid senior executives" took home just over £12m. The biggest earners are not necessarily executives.

The government also promised to consult to introduce similar mandatory disclosures for all large banks from 2012 onwards and for the pay of the eight highest paid "senior executive officers" to be published. This is underway, although the necessary legislation will not be passed until the summer, which means the high street banks may not need to comply until later in the year even though their annual remuneration reports are published in the next few weeks.

• Tax

The four leading banks promised to abide by the UK code of practice, a document originally drawn up by Labour but implemented by the coalition. They promised to contribute a cumulative £8bn of total tax take (covering direct and indirect sources, including the bank levy and VAT) in 2010 and £10bn in 2011. The Treasury said it had not published this data. For the financial year 2010, Barclays paid £2.8bn of UK tax, HSBC £1.2bn, while bailed out Lloyds and RBS paid £2.9bn and £4bn respectively. The numbers are not a direct comparison with the £8bn covered by the agreement, as tax can be owed in one year and paid in another and the tax year does not correspond to the financial year.

• "Societal contributions"

Banks promised to put another £1bn into the UK business growth fund, which was launched in May and has invested just £12.5m so far in three companies. The banks were also to support the Big Society Bank, contributing £200m of capital over two years. Since renamed Big Society Capital, the banks have agreed to make their contribution although the venture is yet to fund its first deal.

It may be a coincidence, but in the weeks after Project Merlin was signed, bank bosses were able to take their bonuses for the first time since the banking crisis. This year the picture is different. RBS chief executive Stephen Hester and António Horta-Osório at Lloyds have waived bonuses. On Friday, Barclays – whose former chief executive John Varley was the architect of Merlin – reports 2011 profits. It could be the next test of political sentiment towards the banking sector.

• Greek government insists talk of a noon deadline was wrong
•Greek politicians locked in talks with an eye on upcoming elections
•Merkel keeps heat on Greeks: 'time is of the essence'
•Credibility of eurozone banks capital boosting plans questioned

5.30pm: So as another deadline for the Greek crisis whizzed by with nothing resolved, it's time to call a halt to proceedings.

There was much rhetoric from the likes of Angela Merkel and Nicolas Sarkozy, trying to push Greece into agreeing cutbacks, and growing concerns about Portugal, prompting a response from the country's prime minister.

But Greece was again centre stage, as the resumption of key talks between prime minister Lucas Papademos and other party leaders was pushed back to tomorrow. Papademos is meant to be meeting the troika later today to discuss proposed austerity measures, but don't hold your breath.

The markets have taken all this remarkably calmly, with the FTSE 100 down just 8.87 points at 5892.20, Germany's Dax virtually unchanged and France's Cac off 0.66%. Across the Atlantic the Dow Jones Industrial Average is currently 44 points lower. The euro fell to around $1.302 before recovering to 1.314.

We'll be back tomorrow to cover all the latest developments, and in the meantime, good bye and thanks as usual for all the comments.

5.13pm: Maybe Papademos wasted his time getting that report on what would happen if Greece goes bust.

German chancellor Angela Merkel has just said in a TV interview - alongside her chum Nicholas Sarkozy:

We refuse to [accept] a Greek bankruptcy. We can't accept that.

But she also said there would only be a second Greek bailout if the country got its public finances in order, which pretty much echoes what the twosome said earlier at their joint press conference.

4.37pm: What would actually happen to the country if Greece does go bust?

That's what the country's technocrat prime minister Lucas Papademos is finding out, as the various meetings about its debt and austerity measures drag on. Papademos has asked experts at Athens' finance ministry to compile a detailed analysis of what bankruptcy would entail. Our correspondent Helena Smith says:

The verdict, according to Greek officials, is that it will make Argentina "look like a picnic in comparision." What we are experiencing now with all the austerity is actually a form of paradise. Bankruptcy for Greece would be hell."

Papademos, a macro-economist, intends to present the report at the meeting (we all hope) he will finally hold tomorrow with the three party chiefs backing his coalition.

Presumably to push them into finally backing the proposals.

But the protests against austerity continue. Greece's two major unions - representing 2m people or around half the workforce - have called a 24 hour strike tomorrow, the latest in a series of walkouts since the first bailouts in 2010. Ilias Iliopoulos, secretary general of public sector union Adedy, told Reuters:

Despite our sacrifices and despite admitting that the policy mix is wrong, they still ask for more austerity.

4.13pm: Portugal seems determined to have its place in the sun today, despite most eyes still being on the interminable Greek talks.

After a spokesman denied a report the country was sounding out advisers about restructuring its debt, the Portuguese prime minister Passos Coelho has come out fighting.

He told journalists that Portugal's debt load was sustainable, its borrowing profile was closer to Ireland - the current EU austerity poster child - and its situation was fundamentally different from Greece. According to Reuters he said:

We will not allow what happened in Greece to happen here.

Let's hope he is not protesting too much.....

3.51pm: A quick run around the markets. In early trading Wall Street has following other global markets lower, as the lack of progress in Greece encourages a spot of profit-taking after last week's rises.

The Dow Jones Industrial Average is down just over 50 points, or 0.4%, while the FTSE 100 is off 16.47 points at 5884.6. Germany, France and Italy have edged marginally lower, while the euro has slipped to $1.3066, but is off its worst levels.

3.44pm: Readers may recall that on Friday we linked to a report suggesting Portugal was sounding out advisers about restructuring its debts, in a similar way to Greece.

In a move entirely in keeping with the seeming lack of urgency surrounding much of this crisis, Portugal has now finally responded. A spokesman told Reuters:

This story is not true, it is groundless.

The report, coincidentally, is from IFR, a news service run by... Thomson Reuters. Strangely it now has today's date, but it was definitely around on Friday.

3.16pm: Speaking of Portugal, the European Central Bank was widely believed to be buying the country's bonds last week.

Although it does not break down its data, the bank has announced it spent €124m on eurozone sovereign debt last week, compared to €63m the previous week. This is basically just keeping things ticking along, a position backed by Germany while others - France, Italy, Britain, the US etc - want it to take a more aggressive stance in its buying.

The bank's latest policy meeting comes later this week, with uncertainty about whether - like Greece's private bondholders - it will be taking a haircut on the €40bn or so of the country's bonds it owns.

2.46pm: Gavan Nolan, credit analyst at Markit, notes the markets appear to be increasingly fearful about Portugal being the next in the firing line as debt and austerity talks in Athens run down to the wire. The cost of insuring five-year Portuguese government bonds has risen 38% in the last month.

[Portugal] is now being compared to Greece on a regular basis, and the comparison doesn't look as frivolous as it did a year ago. Portugal's economy is in a slump, and its growth prospects look grim for the foreseeable future. Debt sustainability then comes into question, as it did with Greece. On the plus side, Portugal is funded through the rest of this year due to the bailout it received from the EU/IMF. But its chances of returning to the capital markets in 2013 look slim at this moment in time, and another bailout is not a remote possibility.

My colleague Phillip Inman suggests Portuguese politicians will be watching the endgame in Athens with great interest. Any concessions won from Brussels may soon be mirrored in political calls from Lisbon.

The likelihood is that Brussels will sue for peace [with Greek political leaders] and stitch a compromise deal together, probably tomorrow, ahead of a eurozone ministers meeting on Wednesday. Everyone will declare it a victory.

Lisbon will look for something similar. Maybe this will be the true battleground, as the Germans renew their objections to a bailout without tough medicine. It could be that Portugal must capitulate or fight and this time, there will be blood.

My colleague Nick Fletcher takes over the Eurozone Crisis blog from here.

2.25pm: The saga of the missing meeting continues. Now Reuters is reporting that Greek political leaders have delayed until tomorrow a critical meeting, which had been eagerly anticipated today — first this morning, then in the early evening. Despite claims that progress is being made in talks over fresh austerity measures between coalition politicians, repeated delays are adding to concerns in the wider markets.

Meanwhile, the cost of insuring Greek sovereign debt against default has been creeping back upwards in recent weeks. For five-year bonds, credit default swaps - a measure of the cost of insurance - have climbed from 5200 basis points to 6542 in the last ten days.

1.35pm: Data released by the European Union this morning showed that the combined debt of the 27 members of the EU has now hit €10,320,106,100,000, or €10.3 trillion.

The new statistics, published by Eurostat, showed that the EU collective debt now equals 82.2% of GDP. France and the UK both owe 85.2% of their national output, with Germany in slightly better shape with a national debt worth 81.8% of GDP.

The data also shows how national debts have swelled over the last few years (see above).

You can see all the information on the Datablog.

1.04pm: Debt talks delays in Athens continues to hit the currency markets, as traders fear the spectre of a chaotic default and contagion. Euro now down 0.6% at $1.3064.

After gaining strength since mid-January on optimism about a deal, the euro is now dipping again.

12.55pm: A meeting between Greek prime minister Lucas Papademos and coalition party leaders is likely to take place early this evening, says Helena Smith in Athens.

Senior officials are confirming that there is concensus among Greece's politicial party chiefs to accept the conditions and terms attached to Athens' next bailout program. "They have accepted the basic principles ... there are outstanding issues and they will take it as far as they can but they are not going to press the nuclear button," one well-placed source said. "The meeting should take place around 6pm, a little earlier or a little later, and we hope that everything willl be finalised at it."

Negotiations between troika representatives and the Greek finance minister Evangelos Venizelos are currently taking place to discuss "technical" issues.

"The troika has relented," said another official. "The biggest obstacle now is the minimum wage. What can you do in Greece with €550 [a month]? It's very difficult for anyone to accept that it be reduced to such levels but my sense tis that this will be solved as well. We are getting closer to an agreement."

12.20pm: Nicolas Sarkozy and Angela Merkel have also waded into the situation, at a joint news conference in Paris this lunchtime.

Sarkozy claimed – with just a hint of optimism – that an agreement over Greece's second bailout has "never been closer". The French president also urged Greece's political leaders to follow through on their commitments.

As Sarkozy put it:

Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded. It needs to be signed.

Chancellor Merkel told the press conference that it was important to see "some progress" in "the next few days", and also insisted that Greece must decide whether it remains in the euro. She said:

We want Greece to stay in the euro. To say it clearly, this is the opinion of both of us. But I also say – there can be no new Greece programme if agreement is not reached with the Troika

All those who bear responsibility in Greece must know – we will not deviate
from this position.

And without a new programme of aid, Greece would head to default next month.

12.06pm: The European commission has blasted Greece for its failure to reach an agreement, and insisted that time has run out.

EC spokesman Amadeu Altafaj told journalists in Brussels that "the ball was in the court of the Greek authorities", insisting that they must now decide whether it would accept the terms of its proposed second bailout.

Altafaj said:

We have gone beyond the deadline already.

Altafaj added that EU finance ministers would meet as soon as Greece has said it will make its commitments.

In other words – don't wait for us to hold our next meeting. We're waiting for you.

11.48am: Frustrations at the missed-deadline-that-never-was over fresh Greek austerity measures are brilliantly articulated by Louise Cooper, of BGC Partners, who gives us an etymology lesson. "Deadline", she reminds us, was originally a Civil War term for a line that marked the boundary beyond which a prisoner could not go without being shot.

Yet again a euro crisis deadline has been proved to be not as its definition would suggest - I think the Oxford English Dictionary needs to update its meaning of deadline to include a eurozone version – likely to be missed, more of an optimistic hoped-for time frame rather than an actual reflection of the days and weeks needed to get something achieved.

We've been messed around a good deal on Greek deadlines in recent days (see below). Meanwhile, eurozone heavyweights are piling on the pressure. Eurogroup president Jean-Claude Juncker, of Luxembourg, said: "If we were to determine that everything has gone wrong with Greece, then there would be no new programme, then this would mean that in March they would have to declare bankruptcy."

The latest hint as to when we might learn more came from one Greek MP, a member of the ruling Pasok party, who has told Bloomberg TV that agreement among coalition politicians must be reached by tomorrow afternoon. Should we hold our breath on that promise? Perhaps not.

11.46am: Germany's December factory orders were up 1.7% on the previous month, well ahead of expectations and boosting the impression that the eurozone's largest economy continues to power ahead, boosted by demand from further afield.

11.10am: A curious historical echo: Today is the anniversary of the 1832 crowning of Otto, King of Greece, an occasion that saw the birth of a (highly indebted) modern state – albeit under the protection of the UK, France and Russia. As FT Alphaville notes Otto was really quite Bavarian. In fact, he was the son of King Ludwig I. His rule saw massive tax hikes and led to widespread discontent – even an assassination attempt on his wife. Eventually, he was ousted in a coup and retreated to Bavaria in 1862. A lesson for our times?

10.33am: Should Scotland vote for independence, it could emerge with something less than a triple A credit rating, according to a mischievous article in the FT this morning. Taking unofficial soundings from the big three credit rating agencies – Standard & Poor's, Moody's and Fitch – the report suggests Scotland might scrape in with an investment-grade rating, but some notches short of the UK's triple A. SNP describes such reports as "inaccurate".

9.31am: The pound has strengthened this morning against the euro as concerns about Greece continue to build. The euro was down about 0.4% against the pound at 82.87 pence. Sterling is now close to its highest level since September 2010 – despite the prospect of the Bank of England opting for another dose of quantitative easing shortly.

9.29am: Hmmm. Greek government officials are now telling Reuters there is no deadline at noon today (10am GMT). They say the only commitment is to reach agreement before the next meeting of the Eurogroup of eurozone finance ministers. A meeting had been in the diary for 4pm today – but appears to have been cancelled over the weekend. On Friday a spokesman for the German finance ministry told Reuters:

A meeting of this kind only makes sense – if it is to be about Greece – if we have all the elements sorted... All of those elements have not been met, so it's speculative to talk about such a meeting.

So the deadline for Greek political agreement is a meeting, invitations to which will only be sent out once Greek political agreement has been reached.

9.10am: European prime minister resigns months ahead of elections and after weeks of nationwide protest against tough austerity measures... Not Greece's Lucas Papademos (yet). In fact it's Emil Boc of Romania.

8.43am: Helena Smith, in Athens, confirms the prospect of April elections is looming large over intense negotiations among coalition parties about Greek austerity proposals.

Their deliberations will be followed by a brief meeting with prime minister Lucas Papademos. He, in turn, will deliver Greece's position to the "troika" of visiting debt auditors from the EU, ECB and IMF. It's likely, however, that word will leak out before then. Even if further cost-cutting measures are accepted, says Helena, it is far from sure that recalcitrant MPs will also endorse them.

Emerging from the talks last night, Giorgos Karatzaferis, the media-savvy leader of the populist Laos, one of the three parties backing Papademos' national unity government, railed: "I'm not going to contribute to the explosion of a revolution [by supporting] a wretchedness that will then spread across Europe."
Antonis Samaras, who heads the main conservative New Democracy party, also emphasised that the boxing gloves were on. "They are asking for more recession than the country can take," he said in a statement, referring to creditors' demands that Greece accept further wage and pension cuts. "I am fighting against them. This is the first time there has been real negotiations."
Papademos in a statement said progress of a kind had been made. The three party leaders had agreed to further spending cuts amounting to €1.5bn.
"These leaders were not given a mandate to allow the country to go bankrupt," Babis Papadimitriou, a prominent commentator on economic affairs, told Skai news. "Bankruptcy will mean years of isolation. If they allow this to happen they will have betrayed Greeks."

8.30am: The FT has a story this morning suggesting as many as half of the capital-boosting proposals put forward by 30 European banks may be rejected as not sufficiently credible. Remember these banks were forced to come up with plans to increase their capital cushions after the European Banking Authority in December found that together they needed to raise €115bn to meet their regulatory targets.

The EBA board are due to discuss submitted plans at a meeting next week. Some experts have pointed a finger at Commerzbank as one bank likely to find filling its capital shortfall a big ask. Since then the German bank has generated €3bn of capital toward its €5.3bn stress test shortfall and local regulators have played down concerns.

Spanish bank Santander was found to have the largest shortfall - of €15bn - but has insisted it has found ways of filling the gap. Only Italy's Unicredit opted for a rights issue to raise capital - and look how well that went.

Update: The European Banking Authority says it will provide an update on bank recapitalisation plans after its board meeting on February 8-9, according to Reuters. Playing down concerns that a large number of proposals were likely to be rejected, the regulator said: "The overwhelming majority of measures outlined in the plans appear to be, in aggregate, in line with the spirit and the letter of the EBA's recommendation."

8.16am: There's not much in the diary today (other than Greece). Here's the agenda:

•10am deadline for Greek politicians to reach agreement on austerity measures
•11am German factory orders for December (Consensus forecast: 1% rise)
•2pm Klaas Knot, governing council member of the ECB speaking at an event in Amsterdam

8.05am: As time ticks on there is increasing concern that a lack of agreement among Greek politicians will overshadow the day. The Asian markets were up overnight on the back of Friday's strong jobs figures from the US. (Japan's Nikkei average rose 1.1% to a three-month high of 8,925 points, the Hang Seng was up 0.51% at 20,862.) Back in Europe the mood is more sombre.

Greek coalition parties are supposed to be working to a deadline of midday - 10am GMT. That might get pushed back, of course, but if it passes without agreement it will do nothing to calm the mood.

Here is the view from analysts at Investec:

Greek politicians face a general election soon after the second bailout has been agreed (or not as it may be). The prospect of an election campaign is certain to influence bailout negotiations. The extra austerity measures may well be counterproductive, but a messy default and uncertainty over Greece's position in the euro will not do much good either, so it is a bit of a lose-lose situation for Greek politicians. Public opinion seems to put greater trust in outsiders than in domestic politicians though, so putting up with EU/IMF conditions may still have the upper hand with the electorate, but remains to be seen if politicians can agree. With no agreement later today, expect markets to become increasingly concerned and a lack of flexibility from the EU may cause some contagion…

7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis.

Today is deadline day for Greece, which must tell the European Union whether it accepts the terms of its second bailout, worth €130bn. The heads of its three largest political parties spent the weekend locked in talks, but are still divided.

One leader – Laos's Giorgos Karatzaferis - has already refused to endorse the painful package of spending cuts and tax rises. Can PM Lucas Papademos pull a deal out of the fire?

Athens is also still struggling to reach a deal with its private creditors over its debt restructuring package – adding to fears that Greece might fall into bankruptcy.

On the economic front, the latest German factory order data should be released this morning, showing how its manufacturers fared at the end of 2011.

Wetherby Whalers' family-owned business will spend £500,000 doing up the grand old place - including Harry's original shed and those jaw-dropping chandeliers

Good news for those fond of northern traditions and sad to see an old one die: Harry Ramsden's original chip shop at Guiseley has been rescued.

Mourning was a bit muted when its closure was announced last year – see the Northerner's report here - because in food terms, it had seen so much better days.

But closure and demolition of a site with such a history, over 83 years, would still have been a wrench; so it's a relief that it isn't going to happen after all. The Wetherby Whaler fish and chip group is taking over the place and plans to spend £500,000 on getting it back to its former splendour.

News is awaited over whether all 24 jobs at the closed restaurant will be replaced; but it could be more. Meanwhile the group's co-founder Phillip Murphy, who launched Wetherby Whaler with his wife Janine in 1989, says:

The famous fish and chip restaurant in Guiseley is the spiritual home of fish and chips in England. It would be a national scandal if it were to close at this time of economic uncertainty.

Our investment has saved a Yorkshire landmark and will ensure the tradition of fine fish and chips continues at this important location.

The new Wetherby Whaler in Guiseley will be our flagship restaurant. We expect it to recapture the atmosphere and flavours of Harry Ramsden's best years.

We are confident that with the right investment, careful attention to detail, great-tasting fish and chips and excellent value for money, we will make a lasting success of this new venture and return the restaurant to its glory days.
Our family-owned business is built on solid foundations and this has given us the confidence to invest. It fits perfectly with our business strategy of controlled growth and accentuates our belief that Yorkshire is a great place to do business.

Harry's at Guiseley was never the same after the brand was franchised, with branches bobbing up in unlikely places worldwide, and in November its latest owners, the Birmingham company Boparan Ventures headed by businessman Ranjit Boparan, announced its closure. The Harry Ramsden brand continues elsewhere and Boparan forecast expansion of the UK's 35 other outlets.

Wetherby Whaler plan to keep Harry's original shed, which is tucked round the back of the glitzy 1931 restaurant which defied the Depression by forming an unprecedented palace for the 'people's food'. The chandeliers made a particularly strong impression, and their cleaning and restoration is one of Mr and Mrs Murph'y first ambitions.

The Northerner is getting in touch with local poet and musician Eddie Lawler to see if he can right an ode - maybe on lines - to replace his recent requiem, which we described a month ago.