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His comments echoed the message from Chinese officials. Su Wei, a senior negotiator, told the Guardian last month that the US had made a "substantive change" under the Obama administration."The message we have got is that the current US administration takes climate change seriously, that it recognises its historical responsibility and that it has the capacity to help developing countries address climate change," Su said.

"China used to think the developed world is not serious. That's what they were saying [at UN talks] in December," he said. "But now they know the US is on the pitch and ready to engage with them. It has made a real difference to what China is saying."

Miliband said he was encouraged by the change in tone since late last year in the country that emits more greenhouse gases than any other. "I think they're up for a deal. I get the strong impression that they want an agreement," he told the Guardian."They see the impact of climate change on China and they know the world is moving towards a low-carbon economy and see the business opportunities that will come with that."

China wants developed nations to commit to more ambitious reduction targets, to share low-carbon technology and to set up a UN fund that would buy related intellectual property rights for use across the world. Beijing's position is complicated by the fact that it already owns a large share of the patents for wind and solar energy in developed nations.

Europe and the US accept the Chinese economy should be allowed to grow further, improving the living standards of its millions of poor, before it makes overall emissions reductions. Instead, the western nations are pushing for strong measures to improve efficiency and establish caps for certain industries. One possibility being considered by Chinese officials is to set a carbon intensity goal up to 2040 that would include energy efficiency, renewable energy, transport and afforestation.

Last month, the Tyndale centre published research showing that it was possible for China to begin reducing its total emissions from 2020.Government officials say that is unrealistic and China has so far resisted announcing a target for when emissions might peak. But the authorities tend towards the later end of the various academic forecasts of between 2020 and 2040.

It's important to point out that this was no ordinary agency report, the kind that often consists just of open source material, hearsay and speculation. Rather, the BND submitted an "office testimony," which consists of factual statements about the Iranian program that can be proved in a court of law. This is why, in their March 26 opinion, the judges wrote that "a preliminary assessment of the available evidence suggests that at the time of the crime [April to November 2007] nuclear weapons were being developed in Iran." In their May press release, the judges come out even more clear, stating unequivocally that "Iran in 2007 worked on the development of nuclear weapons."

The case itself sheds light on how these networks function. According to the supreme court judges, the businessman has brokered "industrial machines, equipment and raw materials primarily to Iranian customers," for Iran's nuclear weapons program. According to the same decision, the defendant's business partners in Tehran "dealt with acquiring military and nuclear-related goods for Iran and used various front companies, headquartered for example in Dubai and the United Arab Emirates, to circumvent existing trade restrictions." According to the judges, Mohsen V. also tried to supply to Tehran via front companies in Dubai "Geiger counters for radiation-resistant detectors constructed especially for protection against the effects of nuclear detonations."

BND sources have told me that they have shared their findings and documentation with their U.S. colleagues ahead of the 2007 NIE report -- as is customary between these two allies. It appears the Americans have simply ignored this evidence despite repeated warnings from the BND.

Mr. Obama will meet with leaders from the region this weekend. They will discuss the economic crisis, including a plan to replenish the Inter-American Development Bank, a Washington-based pillar of clout that has suffered losses from the financial crisis.

Meanwhile, China is rapidly increasing its lending in Latin America as it pursues not only long-term access to commodities like soybeans and iron ore, but also an alternative to investing in United States Treasury notes.

One of China’s new deals in Latin America, the $10 billion arrangement with Argentina, would allow Argentina reliable access to Chinese currency to help pay for imports from China. It may also help lead the way to China’s currency to eventually be used as an alternate reserve currency. The deal follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.

As the financial crisis began to whipsaw international markets last year, the Federal Reserve made its own currency arrangements with central banks around the world, allocating $30 billion each to Brazil and Mexico. (Brazil has opted not to tap it for now.) But smaller economies in the region, including Argentina, which has been trying to dispel doubts about its ability to meet its international debt payments, were left out of those agreements.

Details of the Chinese deal with Argentina are still being ironed out, but an official at Argentina’s central bank said it would allow Argentina to avoid using scarce dollars for all its international transactions. The takeover of billions of dollars in private pension funds, among other moves, led Argentines to pull the equivalent of nearly $23 billion, much of it in dollars, out of the country last year.

China is also seizing opportunities in Latin America when traditional lenders over which the United States holds some sway, like the Inter-American Development Bank, are pushing up against their limits.

Just one of China’s planned loans, the $10 billion for Brazil’s national oil company, is almost as much as the $11.2 billion in all approved financing by the Inter-American Bank in 2008. Brazil is expected to use the loan for offshore exploration, while agreeing to export as much as 100,000 barrels of oil a day to China, according to the oil company.

The Inter-American bank, in which the United States has de facto veto power in some matters, is trying to triple its capital and increase lending to $18 billion this year. But the replenishment involves delicate negotiations among member nations, made all the more difficult after the bank lost almost $1 billion last year. China will also have a role in these talks, having become a member of the bank this year.

In February, China’s vice president, Xi Jinping, traveled to Caracas to meet with President Hugo Chávez. The two men announced that a Chinese-backed development fund based here would grow to $12 billion from $6 billion, giving Venezuela access to hard currency while agreeing to increase oil shipments to China to one million barrels a day from a level of about 380,000 barrels

Mr. Chávez’s government contends the Chinese aid differs from other multilateral loans because it comes without strings attached, like scrutiny of internal finances. But the Chinese fund has generated criticism among his opponents, who view it as an affront to Venezuela’s sovereignty. “The fund is a swindle to the nation,” said Luis Díaz, a lawmaker who claims that China locked in low prices for the oil Venezuela is using as repayment.

“This is China playing the long game,” said Gregory Chin, a political scientist at York University in Toronto. “If this ultimately translates into political influence, then that is how the game is played.”

The political elites in Europe have not yet responded to these problems. There have been no significant public debates; neither about the euro, EU expansion, a proposed constitution, nor the European Union's responsibilities in the Balkans and Afghanistan. Instead, Europe's political elites have remained silent. EU policies are determined, following the pre-1989 Western European tradition, by a cartel of political elites that is insulated from the democratic public. The more that Europe lacks the acceptance of its citizens, the harder it will befor the Union to meet the coming geopolitical challenges.

The assumption that the European Union lacks competence in foreign and security policy is misguided. For nearly a decade, the European Union has had access to the entire spectrum of institutional capacities -- including military capability -- that is necessary for active participation in global politics. It is an equally unconvincing argument that the 27 member states are simply too difficult to coordinate to actively engage in international politics. On the contrary: the foreign and security strategy of the European Union is remarkably consistent and coherent, from effective multilateralism, to peaceful conflict resolution, to addressing the problem of fragile statehood. Europe only needs to match its words with action. Member states need to abandon their vain attachment to national prerogatives and speak with one foreign policy voice. Here the largest member states -- Great Britain, France, and Germany -- have often been the biggest hindrance.

The era of the G-7 or G-8, in which the western industrial states (and Russia) could keep to themselves, is over. There is no alternative to a G-20 that systematically includes developing nations from all regions of the world into the process of global governance.

Until now, the European Union -- despite its inclusion in the Middle East Quartet -- has always been reluctant to propose solutions to the conflict between Israel and Palestine. Instead, Europe has essentially hidden behind the United States. Now, after eight years of the Bush administration, America has lost nearly all of its credibility, and it is going to be a while before President Obama can do anything to significantly reestablish it. There is a need, in other words, for the European Union and its member states to play a larger role -- not least, because the European Union has pro-Arab as well as pro-Israeli positions represented in its institutions and among its member states. The European Union could credibly serve as an honest broker in the region -- if it only wanted to.

Unfortunately, the countries of the European Union allow themselves to be played against one another yet again -- especially along the economic fault line between old and new member states. Europe's answer to the economic and financial crisis is not encouraging. Instead of a coordinated reaction of the EU member states, national measures have taken priority. Even Germany -- despite all its pro-European rhetoric -- has shown little appetite for cooperation.This failure is particularly frustrating in light of the fact that Europe has the world's best institutional capacity to develop integrated answers to crossborder economic challenges.

In addition, there is still a clear asymmetry between negative and positive integration, as political scientist Fritz Scharpf diagnosed in the mid-1990s. The creation of an internal market continues to trump the development of economic and social policies that can steer and correct that very market. It is no accident that the call for a "social Europe" is getting ever louder. The inability for European governments to coordinate their responses to the financial crisis has contributed to the legitimation crisis of European integration.

The post-Cold War era is over. Europe has no choice but to orient itself to the challenges of the future. Before anything else, the European Union needs to gain the approval and trust of its own citizens. The failed referenda pose less of a threat to Europe than does the continent's growing Euro-skepticism and the silence of European elites in the face of criticism "from below." Those who are believers in Europe and European unification must actively take on the challenge of convincing others.

The deceased politician and scholar Peter Glotz, just several weeks after the end of the fateful year 1989, wrote in this very publication that "the decisive question of the next decade will be whether the European elites manage to overcome the narrow categories of the nation state. ... In Europe, the nations are too weak to engage in global politics; at the same time, they are strong enough to prevent the development of an effective supranational European politics." Twenty years later, those observations have unfortunately lost none of their truth.

A second government adviser, Hu Angang, has said China should start cutting overall emissions from 2020.

While that is a minority view and final decisions are some way off, the proposals are striking because they are at odds with China's official negotiating stance.

Beijing has hitherto rejected carbon emission caps or cuts, arguing that its priority is to improve its people's living standards – and that the west caused the global warming problem and should fix it. But developed nations argue that they cannot commit to deep cuts and to substantial funding for developing nations to fight climate change unless those countries embrace emissions targets.

Environmental groups and foreign diplomats said a carbon intensity target would be a significant step forward. Any move by China, the world's fastest expanding major economy, biggest emitter of greenhouse gases and most influential developing nation, would have an enormous impact on the outcome of the Copenhagen summit in December."It would be a significant step for China to set a target that directly links carbon emissions to economic growth for the first time," said Yang Ailun of Greenpeace."This is a green shoot of pragmatism that should be nurtured," said one European diplomat.

Hu, an influential economist and advocate of "green revolution", is pressing the government to take a leadership role in Copenhagen by making a public commitment to reduce emissions, and last week submitted the proposal to set a new carbon dioxide goal.He is one of 37 members of an elite body that advised the premier, Wen Jiabao, to include ambitious targets of a 20% improvement in energy efficiency and 10% reduction of pollution in the 2006-2010 plan. With government figures suggesting the country is on course to approach or exceed those goals, Hu suggests they be extended for the next plan with the addition of the carbon dioxide target.

If his proposal is accepted, Hu believes China will be able to make an international pledge this year to reduce carbon dioxide emissions from 2020.

the debate on China's role in greenhouse gas reductions is widening. Last month, the Chinese Academy of Science reported that the country's carbon dioxide emissions relative to GDP should be reduced by 50% by 2020, and that total CO2 emissions should peak between 2030 and 2040 if the country introduced more stringent energy-saving policies and received more financial support and technology from overseas.

Citing new figures from the state bureau of energy, Hu said China overtook the US last year as the world's biggest energy producer with 2.6bn tonnes of standard coal equivalent, seven years ahead of expectations. "If we can't succeed in reducing energy consumption, then no one can. I tell the government that a 1% failure in China is a 100% failure for the world," said Hu. "We must satisfy our national interest and match it with the interest of humanity."

This is a radical change of tone and content from the Bush administration which envisaged that emissions would continue to grow to 2025.

Mr Pershing did promise that the US would help poor countries to fund clean technology. He would not mention figures but he hinted the sums would be much less than many developing countries demanded.

He said the best role for governments would be to incentivise the private sector to develop energy efficiency, clean technologies and reduce deforestation. He said China did not want money for technology from the USA but co-operation on technology development.

Negotiators from China, India and Papua (representing vulnerable states) all told BBC News that the US and other rich nations needed to cut emissions much harder and offer concrete funding. Surya Sethi from India said: "Progress is extremely slow. Rich nations seem to think that developing countries can help the world out of the climate problem. But the poorest 50% have just 11% of emissions. "It is crystal clear that the answer is for the United States and other rich nations to change their lifestyles and their methods of production and consumption. We do not see any real evidence that they have grasped that issue properly yet."

The interventions from Obama capped an intensive lobbying effort for the bill by the White House and administration officials, Al Gore, and a broad coalition of environmental and business groups. The run-up had seen America's oil, gas and coal industry increase its lobbying budget by 50% in the first three months of the year to try to kill the bill. The spoiler campaign has run to hundreds of millions of dollars and involves industry front groups, lobbying firms, television, print and radio advertising, and donations to pivotal members of Congress.

The bill, now swollen to about 1,200 pages, would bind the US to reduce the carbon emissions from burning oil and coal by 17% from 2005 levels by 2020 and more than 80% by 2050.

t envisages measures to promote clean energy – from a development bank for new technology to new, greener building codes and targets for expanding the use of solar and wind power.

After the reduction of the original ­emissions-cut target to 17% and the granting of far more free pollution permits for the cap-and-trade scheme than originally envisioned, the most significant concessions include how farmers are rewarded for practices that reduce carbon ­emissions, and a four-year delay in new regulations that would have cut the profits of corn-based ethanol and encouraged the ­development of non-food biofuels instead.

"We are now formulating a plan for development of renewable energy. We can be sure we will exceed the 15% target. We will at least reach 18%. Personally I think we could reach the target of having renewables provide 20% of total energy consumption."

That matches the European goal, and would represent a direct challenge to Europe's claims to world leadership in the field, despite China's relative poverty. Some experts have cast doubt on whether Britain will be able to reach 20%. On another front, China has the ambitious plan of installing 100m energy-efficient lightbulbs this year alone.

Beijing seeks to achieve these goals by directing a significant share of China's $590bn economic stimulus package to low-carbon investment. Of that total, more than $30bn will be spent directly on environmental projects and the reduction of greenhouse gas emissions.But the indirect green share in the stimulus, in the form of investment in carbon-efficient transport and electricity transmission systems, would be far larger.HSBC Global Research estimated the total green share could be over a third of the total package.

He said the government would also plough money into the expansion of solar heating systems. He said the country was already a world leader, with 130m square metres of solar heating arrays already installed, and was planning to invest more. The US goal for solar heating by 2020 is 200m square metres.

David Sandalow, the US assistant secretary of energy, said the continuation of business as usual in China would result in a 2.7C rise in temperatures even if every other country slashed greenhouse gas emissions by 80%."China can and will need to do much more if the world is going to have any hope of containing climate change," said Sandalow, who is in Beijing as part of a senior negotiating team aiming to find common ground ahead of the crucial Copenhagen summit at the end of this year."No effective deal will be possible without the US and China, which together account for almost half of the planet's carbon emissions."

Attacks like these -- or U.S. awareness of them -- appear to have escalated in the past six months, said one former official briefed on the matter.

while the spies were able to download sizable amounts of data related to the jet-fighter, they weren't able to access the most sensitive material, which is stored on computers not connected to the Internet.

Former U.S. officials say the attacks appear to have originated in China. However it can be extremely difficult to determine the true origin because it is easy to mask identities online.

A Pentagon report issued last month said that the Chinese military has made "steady progress" in developing online-warfare techniques. China hopes its computer skills can help it compensate for an underdeveloped military, the report said.

The Chinese Embassy said in a statement that China "opposes and forbids all forms of cyber crimes." It called the Pentagon's report "a product of the Cold War mentality" and said the allegations of cyber espionage are "intentionally fabricated to fan up China threat sensations."

The U.S. has no single government or military office responsible for cyber security. The Obama administration is likely to soon propose creating a senior White House computer-security post to coordinate policy and a new military command that would take the lead in protecting key computer networks from intrusions, according to senior officials.

The Bush administration planned to spend about $17 billion over several years on a new online-security initiative and the Obama administration has indicated it could expand on that.

The Joint Strike Fighter, also known as the F-35 Lightning II, is the costliest and most technically challenging weapons program the Pentagon has ever attempted. The plane, led by Lockheed Martin Corp.

Six current and former officials familiar with the matter confirmed that the fighter program had been repeatedly broken into. The Air Force has launched an investigation.

Foreign allies are helping develop the aircraft, which opens up other avenues of attack for spies online. At least one breach appears to have occurred in Turkey and another country that is a U.S. ally, according to people familiar with the matter.

Joint Strike Fighter test aircraft are already flying, and money to build the jet is included in the Pentagon's budget for this year and next.

Computer systems involved with the program appear to have been infiltrated at least as far back as 2007, according to people familiar with the matter. Evidence of penetrations continued to be discovered at least into 2008. The intruders appear to have been interested in data about the design of the plane, its performance statistics and its electronic systems, former officials said.

The intruders compromised the system responsible for diagnosing a plane's maintenance problems during flight, according to officials familiar with the matter. However, the plane's most vital systems -- such as flight controls and sensors -- are physically isolated from the publicly accessible Internet, they said.

The intruders entered through vulnerabilities in the networks of two or three contractors helping to build the high-tech fighter jet, according to people who have been briefed on the matter. Lockheed Martin is the lead contractor on the program, and Northrop Grumman Corp. and BAE Systems PLC also play major roles in its development.

The spies inserted technology that encrypts the data as it's being stolen; as a result, investigators can't tell exactly what data has been taken. A former Pentagon official said the military carried out a thorough cleanup.

Investigators traced the penetrations back with a "high level of certainty" to known Chinese Internet protocol, or IP, addresses and digital fingerprints that had been used for attacks in the past, said a person briefed on the matter.

As for the intrusion into the Air Force's air-traffic control systems, three current and former officials familiar with the incident said it occurred in recent months. It alarmed U.S. national security officials, particularly at the National Security Agency, because the access the spies gained could have allowed them to interfere with the system, said one former official. The danger is that intruders might find weaknesses that could be exploited to confuse or damage U.S. military craft.

In his speech in Austin, Mr. Brenner, the U.S. counterintelligence chief, issued a veiled warning about threats to air traffic in the context of Chinese infiltration of U.S. networks. He spoke of his concerns about the vulnerability of U.S. air traffic control systems to cyber infiltration, adding "our networks are being mapped." He went on to warn of a potential situation where "a fighter pilot can't trust his radar."

Clinton had pressed for Iranian participation in The Hague conference, stressing the importance of finding a regional solution to the insurgency in Afghanistan and Pakistan, and western officials were encouraged that Akhundzadeh, a deputy foreign minister and former charge d'affaires in London, was sent by Tehran.

Akhundzadeh told ministers from more than 70 countries at the meeting: "Welcoming the proposals for joint co-operation offered by the countries contributing to Afghanistan, the Islamic Republic of Iran is fully prepared to participate in the projects aimed at combating drug trafficking and plans in line with developing and reconstructing Afghanistan."

He repeated Tehran's criticism of the Nato role in Afghanistan, but used relatively moderate language, saying: "The presence of foreign forces has not improved things and it seems that an increase in the number of foreign forces will prove ineffective, too."

Akhundzadeh added: "The military expenses need to be redirected to the training of the Afghan police and army and Afghanisation should lead the government building process" - an apparent nod towards the Obama administration's decision to send 4,000 more American military trainers.

Western officials expressed hopes that the west and Iran could return to the close co-operation over Afghanistan that took place in the months after the 9/11 attacks. Iranian officials even helped the US target the Taliban, but the relationship cooled after Bush's "axis of evil" speech.

"There is a meeting of minds on drugs, development issues and the [August Afghan] elections, though not on foreign troops, on which they made clear their objections."

Malloch Brown acknowledged that Iran had done some "bad things" in both Afghanistan and Iraq, supplying weaponry to insurgents that had been used against British soldiers.But he argued: "This is Iran supporting its proxies because of a lack of diplomatic partnership around Iraq and Afghanistan. If this is a rapprochement, whether it is overall rapprochement or just aimed at stabilising Afghanistan, it offers the prospect of this behaviour getting moderated and hopefully stopping."

The report estimated China's military spending in 2008 was roughly double that of a decade ago.

China's armed forces are undoubtedly undergoing a dramatic transformation from a poorly-equipped peasant army to an increasingly sophisticated modern military, the BBC's defence and security correspondent Rob Watson says. But its level of training and co-ordination as well as actual war fighting capability is still in doubt, he adds.

China's communist rulers have said they are prepared to offer more stimulus spending in order to achieve the 8% growth target. But the bank said this may not be the right approach and the government should nurture reserves in case growth falls further.

According to the latest World Bank global forecasts, published in December, the world economy is set to expand at a weak annual rate of 0.9% in 2009, with a 0.1% contraction in developed economies offset by growth in developing countries of 4.5%. A Chinese government think tank this month forecast first-quarter growth would slow to 6.5%, from a 6.8% pace in the fourth quarter last year.

"We are at the low end of the production line for the global economy," he said. "We produce products and these products are consumed by other countries, especially the developed countries. This share of emissions should be taken by the consumers but not the producers," he said.

Mr Li also criticised proposals by the US to place carbon tariffs on goods imported from countries that do not limit those gases blamed for a rises in global temperatures. "If developed countries set a barrier in the name of climate change for trade, I think it is a disaster," Mr Li said.

Working out quite how to put Mr Li's suggestion into practice would be a logistical nightmare, other delegates in Washington said, even if the idea was ever agreed in principle. Asking importers to handle emissions "would mean that we would also like them to have jurisdiction and legislative powers in order to control and limit those," top EU climate negotiator Artur Runge-Metzger said.

Japan's chief negotiator Shinsuke Sugiyama pointed out that whatever deal emerged from Copenhagen, it was vital that it involved the US and China this time around. "Japan will not repeat Kyoto," Mr Sugiyama said. "At Kyoto we were not able to involve the biggest emitters in the world by now - and that means the United States of America and China," he said.