Gordon Brown is to fly to Washington tomorrow for emergency talks on the international financial crisis with his US counterpart, George Bush, at the White House.
The unscheduled talks follow the British prime minister's announcement today that he is publicly backing the controversial US $700bn plan to bail out Wall Street, saying action was required to "get these bad assets out of the system as quickly as possible".
Speaking in New York, where he is meeting a series of world leaders
to discuss both the credit crunch and efforts to meet the UN's millennium development goals, Brown said the financial package, set to be considered by Congress, was vital to restore stability.
The prime minister is finding his trip to the UN general assembly increasingly diverted towards the financial crisis, although he is also trying to make sure his original agenda of extra cash for Africa from both public and private sector is not squeezed out altogether. Brown is hoping to hear an extra £7bn in commitments.
He held a breakfast today with 19 big asset fund managers from Wall Street at the Waldorf Hotel, including chief executives from Goldman Sachs and George Soros, head of Soros Fund Management. Unlike Brown, Soros is opposed to the bail-out plan proposed by the US treasury secretary, Henry Paulson.
But Brown said: "It is necessary to get these bad assets out of the system as quickly as possible. We need to make sure we stabilise the financial system immediately.
"We support and welcome the American Resolution Trust Corps. Let us make sure this never happen again. It is important that we support the American action."
Brown said he was not going to discuss Congressional opposition to aspects of the plan, including the limit on salaries earned by executives whose companies benefit from it. "It is a matter of detail to be worked out by the authorities," he said.
He also claimed that many world leaders at informal meetings with him yesterday supported his plan for greater international supervision, largely based on proposals being mapped out by the financial stability forum, a group of bankers, regulators and treasury officials from more than 30 countries.
Brown discussed the plan last night with leaders, including
Spanish prime minister Jose Zapatero, European commission president Jose Barrroso, Australian prime minister Kevin Rudd, Brazilian president Luiz Inacio Lula da Silva and Danish prime minister Anders Fogh Rasmussen.
The prime minister is fighting for a multi-part package but has no meeting scheduled with senior US Treasury figures as they battle in Washington over the bail-out package.
Brown has called for international regulation, greater transparency and responsibility in executive bonuses to encourage longer-term decision making. He believes the IMF, working with the Financial Stability Forum - a group of central banks, regulators and international bodies - "should be at the heart of an early warning system for financial turbulence affecting the global economy". The forum is due to report on a proposal in autumn.
He has also been privately testing the water to see whether there are grounds for restarting world trade talks in the near future.
Initial polls suggest Brown's standing in the polls has been boosted by his promise in his Labour party conference speech this week to be a rock of stability in the credit crisis.
He will, however, be aware that the economy can swing votes massively, and will have witnessed the Democratic presidential candidate, Barack Obama, enjoying a poll surge as the Republicans suffer from the incumbency factor.
Brown insists he has done everything he needed to increase liquidity in UK markets, and privately complains the crisis could have been minimised had his proposals on international regulation been implemented earlier.
He says his form of risk-based regulation has worked, but the scale of the new financial instruments outwitted the regulators.
Brown is concerned the costs of the credit crisis, as well as the economic down turn, will mean the developed world turns off the tap on funding to alleviate poverty. He has been working on ambitious packages on education, health and eradicating deaths from malaria by 2015.
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