Brown plan to calm world economy

In an article for the Financial Times, Mr Brown set out a "manifesto for successful globalisation" and called on policy-makers around the world to take the opportunity presented by the current period of volatility to push through fundamental reform.

In a foretaste of what he is likely to tell the gathering of the World Economic Forum in Switzerland on Friday, the Prime Minister acknowledged that the global economy was facing "its biggest test in more than a decade".

But he warned against a return to protectionism in the face of financial uncertainty, warning that it would compound the downturn and wreck the chances of millions of people to break out of poverty.

Mr Brown wrote: "Turbulent conditions, throughout history, have been an opportunity for reform.

"This latest test of world financial systems presents a window in which to address fundamental issues that, if tackled properly, will improve economic management, regulation and the fight against inflation, and help us prevent similar crises in the future."

Mr Brown made clear that he blamed reckless banks, hedge funds and private equity investors for much of the volatility of recent months, which was sparked by the collapse of the sub-prime mortgage market in the US and led to stock market plunges of 5% or more around the world this week.

In their search for higher returns, investors "underpriced the risks in a number of markets, particularly in the markets for complex derivative products" in such a way that risks were "transferred to those least able to understand them", he wrote.