China may act spoilsport at G20 meet: reports

China has emerged as the latest threat to Gordon Brown's hopes of striking a "global new deal" at the economic summit of the world's richest countries in London next month. The UK prime minister will chair the G20 meeting on 2 April, and wants them to agree a broad package of economic and financial measures to address what he called "the first global recession". 

One of the central planks of Mr Brown's plan is a move towards common international standards on financial regulation, something is says is needed to prevent the high-risk lending and banking failures that helped trigger the downturn. But China may scupper hopes of such a landmark deal by opposing new rules for the world's financial system.

One such proposal – backed at this week's summit of EU leaders in Brussels – is for tougher global financial regulation, including a crackdown on tax havens, hedge funds and private equity firms, and an end to pay and bonuses which encourage excessive risk-taking.

But Jose Manuel Barroso, president of the European Commission, had warned, "The main problem will come from other countries, like China for example, that don't have the culture of a common setting of rules."

In the face of contrary indications, Brown insisted that China was playing a constructive part in the G20 negotiations. "Any suggestion that China does not want a positive outcome for the G20 discussions is wrong," he said. But he admitted he would need further "private discussions" with Premier Wen Jiabao before the meeting.

The Prime Minister said the EU talks had "laid the foundations" for a successful London summit after its 27 leaders closed ranks to avoid sending a negative signal to the financial markets. "We have also agreed on the importance of doing what is necessary to restore jobs and growth by the fiscal actions we take, [including] maintaining vital public investment at this time.''

Brown is staking a significant measure of his personal credibility on the outcome of the London summit, and some ministers are privately worried that he has raised unrealistic expectations of what it can achieve. 

Brown's hopes of unity in London have already been dented by a dispute over the need for more fiscal stimulus measures. EU states including France and Germany have given a cool response to British and American calls for more packages of tax cuts and public spending funded by borrowing. 

Barosso said despite the rift, European and US leaders are at least "converging" on the need for a global standard for financial regulation.