G20 NATIONS Washington Summit:British PM stakes claim to global leadership role ahead of US summit, writes Frank Millar, London Editor

BRITISH PRIME minister Gordon Brown has again claimed a global leadership role in urging a worldwide fiscal stimulus package and a new world trade deal to tackle the international economic crisis.

Locked in an undeclared race to be the first European leader to meet US president-elect Barack Obama, Mr Brown also expressed confidence in their shared approach to the reform of international financial systems and a common belief that a retreat to protectionism "can be avoided".

Speaking ahead of the G20 summit starting in Washington on Friday, Mr Brown told a Downing Street press conference only "small differences" were now preventing the successful conclusion of the Doha round negotiations.

"If over the coming days countries can resolve what I now regard as small differences, it would send a huge signal to the whole world that the answer to 2008's crisis is not the beggar thy neighbour protectionism of past crises but stimulating a world trade agreement," he said.

Downing Street had appeared to encourage comparisons with Winston Churchill last month as Mr Brown basked in international acclaim for his plan to rescue the British banking system. In his Guildhall speech to the Lord Mayor's banquet on Monday night, Mr Brown likewise appeared to assume the mantle of Franklin D Roosevelt, when telling his audience the only thing they had to fear was fear itself.

There were references again to "the new deal" yesterday, following Mr Brown's challenge to fellow world leader's to seize the moment and lay the basis for a new global order.

Mr Brown's remarks followed an initial response to Senator Obama's election victory suggesting that the "progressive" parties on both sides of the Atlantic could work together to defy the downturn and build "the fair society".

But the prime minister appeared somewhat short on answers yesterday when pressed about what practical outcomes could be expected from the Washington summit, given that president-elect Obama will not be there and while the world awaits the transition of power from the Bush to an Obama White House. Mr Brown also declined to "get into figures" when asked how big a fiscal stimulus he wanted to see.

On the domestic front, meanwhile, Mr Brown stood accused of abandoning prudence in favour of "unfunded" tax cuts. But he insisted that it was premature to conclude tax cuts now to fight recession would have to be paid for by tax rises at a later date.

Mr Brown agreed with Chancellor Alistair Darling that the British government would have to "balance the books" and sustain public finances "over the longer term".

Amid intense speculation that the imminent pre-budget report will confirm plans to further increase borrowing to allow tax cuts, however, Mr Brown urged people against "rushing to premature conclusions" about the likely consequences when they could not know the impact of government actions on restoring growth.

The Tories reacted sharply after Mr Brown had dismissed Conservative leader David Cameron's proposal for tax breaks for businesses taking on new workers from the dole queue. Mr Cameron proposed a £2,500 (€3,100) National Insurance break for companies for every job given to someone unemployed for three months, saying this "fiscally responsible" scheme would fund itself by saving £8,000 in benefits for every new worker.

Mr Brown suggested the Tory proposal was "not serious", describing the scheme as "an expensive one that doesn't necessarily guarantee that more jobs will be created overall".

Moreover the prime minister opened a significant political divide by embracing "unfunded" tax cuts - that is cuts paid for by borrowing and not as a result of savings - having previously warned against such a departure.

Asked if he was now in favour of unfunded tax cuts, Mr Brown replied: "I define a fiscal stimulus as one where you have to take action that is initially unfunded . . . the aim is to get the economy moving through higher economic activity and that is exactly what I am doing."