The Group of Seven industrialised countries, meeting on the Japanese island of Okinawa, will today deflect Russian calls for a reduction in $42 billion (€45.46 billion) of Sovietera debt owed to the Paris Club of government creditors.

A statement issued as the meeting starts today will instead indicate that the Paris Club should hold a special meeting this autumn to arrange rescheduling of Russian debts due in January.

Russia had hoped to use the Okinawa meeting to press for some debt forgiveness, since it will attend the latter part of the meeting with the rest of the G7, turning it into a G8 gathering on Saturday. However, the G7 countries are understood to have agreed that debt forgiveness is unnecessary since Russia's economy has been improving and the country has benefited from the recent rise in the oil price. Instead, the G7 will call on the Paris Club to start discussions on the rescheduling of the portion of the debt due in January.

However, the G7 is likely to indicate to Russia that this rescheduling will partly depend on Russia agreeing on a programme of structural reform with the International Monetary Fund.

Russia has about $150 billion of external debts about two-thirds of which were inherited from the Soviet era. Earlier this year Russia reached an agreement with the London Club of private creditors that the $32 billion debt inherited from the former Soviet Union should be reduced by 37 per cent.

Meanwhile, the British Prime Minister, Mr Tony Blair, is to underline his relationship with Mr Vladimir Putin at a private meeting with the Russian President today at the G8 summit.

The meeting will be the third between the two leaders, and Mr Blair made it clear yesterday that a fourth was likely before the end of the year.

Other leaders such as President Clinton are more guarded about Mr Putin.

However, Mr Blair said: "As far as I am concerned he is doing a good job and has got exactly the right programme for Russia. I think the strength of our relationship between Britain and Russia at the moment is very important.

"It is fair to say the Russian economy is now growing again and I think the most important thing will be to discuss with him the economic reform programme in Russia, how it is going and how we can help them."

Mr Blair was the first world leader to meet Mr Putin, then president-elect, on a private visit to St Petersburg.