G20 to police new world economic order

The Group of 20 rich and developing countries is to take on a new role as caretaker of the global economy, giving rising stars such as China and India more say in world affairs. The move means the G20 supplants the G7 and G8 - institutions dominated by rich Western economies, which will now remain forums for discussing geopolitical issues, diplomats said.

In another boost for countries such as China, the G20 unexpectedly reached a deal on reshaping the International Monetary Fund to shift more voting power to some developing countries. The deal recognized their growing economic clout and the vital role they must play in helping the world economy climb out of the the worst recession in generations.

Currently, China wields 3.7pc of IMF votes compared with France's 4.9pc, although the Chinese economy is now 50pc larger than that of France.

G20 leaders pledged in a draft statement to keep some stimulus supports in place until a recovery is clearer.

They also agreed to rein in financial industry excesses that led to the credit crisis, which first erupted in 2007, and to work together to tighten rules on how much capital banks must keep on hand to absorb losses.

The final version of the communique will be issued when the leaders wind up their meeting on Friday evening.