Brown: London can lead the new order

Writing exclusively in the Evening Standard, the Prime Minister called on the City to adopt his agenda of better regulation and closer supervision, setting new standards for the world to follow.

"It is fitting that we are seeking to agree new rules for global financial markets here in London," he wrote.

"Getting this right can provide a platform for a reformed City to secure its place as the world's leading financial centre in a more responsible, better supervised global system that our economies so urgently need."

Mr Brown is urging a stronger role for the Financial Services Authority, an end to the short-term bonus culture, a crackdown on tax havens and greater clarity of the risks taken by banks. His comments gave a strong hint that a reformed City would enjoy greater Government support.

Expressing sympathy for City workers, in contrast with his condemnations of greedy bank bosses, Mr Brown said: "I know that ordinary City workers are feeling the pain of the worldwide financial collapse that has triggered this global recession."

However, Mr Brown's article notably made no call for a big global deal to inject more money into the world economy to beat the recession, making clear that the ambition has been effectively dropped from the G20 agenda because of a lack of European support.

With the summit's formal opening just three days away, world leaders have already begun gathering in London. Australia's Kevin Rudd was at No 10 for breakfast talks this morning, with Mexican president Felipe Calderó* arriving this afternoon.

Many Londoners are keenly awaiting the arrival tomorrow of Barack Obama, who used an interview to urge the G20 countries to show "unity in the face of crisis".

The US President, who has been one of the biggest voices calling for a world cash injection to match his own plans to boost the American economy, also softened his position by agreeing the importance of other measures. "There are some G20 participants that are arguing fiercely for stimulus, others for regulation," he told the FT.

"We need stimulus and we need regulation. We need to deal with the problems right in front of us and we also need to make sure we're taking steps to prevent these types of breakdowns from happening again."

Mr Obama said that each country needed to make sure it was "taking serious steps to deal with the problems in the banking sector and the financial markets".

He retreated from demanding an immediate stimulus by agreeing with European leaders who have insisted they need to wait and see how previous spending boosts have worked. "We need to see how they work," he said.

"To start making a whole host of plans about next year, without having better information on how the current stimulus efforts are working, is something that I think is of concern."

He spoke confidently of a deal, saying he had spoken to a range of world leaders and found "a rough consensus" on what had to be done.

But shadow chancellor George Osborne, also writing in the Evening Standard, scoffed that the Government had performed a "rather panicky downplaying of expectations" from past Downing Street rhetoric about a "grand global bargain".

He said the reluctance of other countries to spend their way out of recession showed the Prime Minister was "isolated".