Guardian

Mogul's former deputy tells how bankers planned real estate transactions to revalue $64m in property at $3.2bn

Allen Stanford used fake accounting to prop up his offshore bank in its waning days as withdrawal requests from investors poured in, Stanford's former top deputy has said.

Faced with a worrying number of withdrawals in 2008, Stanford came up with a plan to make a $600m capital infusion into the bank, said James Davis, Stanford's former chief financial officer and the US government's top witness.

Stanford is on trial in federal court in Houston charged with running a $7bn Ponzi scheme from his bank in Antigua. Prosecutors allege Stanford, who has pleaded not guilty, sold fraudulent certificates of deposit and used the proceeds to buy jets, luxury homes and Caribbean real estate.

In the spring of 2008 Stanford's accountants inflated the value of about 1,500 undeveloped acres in Antigua that Stanford had bought for $64m. The accountants planned a series of property transfers to put the real estate back on the bank's books with a value of more then $3.2bn, Davis told the court.
"No actual cash or assets were going into the bank?" William Stellmach, a federal prosecutor, asked Davis. "No, sir," Davis replied.

The transaction was meant to fill a hole left by Stanford's spending, which became apparent as investors took their money out of the bank, Davis said.
But by the end of December 2008 Stanford International Bank had only $88m in cash, far less than the $1bn it claimed to hold, according to documents Stellmach showed to jurors. The US Securities and Exchange Commission seized Stanford's businesses and assets in February 2009.

Davis, 63, said stress related to keeping the scheme going eventually took a toll on his health, causing him both physical and mental problems. "The fraud that I was participating in was killing me," Davis told the jury.

Stanford, the largest private landowner in Antigua and a onetime 20-20 cricket mogul, was known as "Sir Allen" after being knighted by the island's former prime minister.

Stanford was once considered one of the United States' wealthiest people, with an estimated net worth of more than $2 billion. He's been jailed without bond since being indicted in 2009.

He is on trial for 14 counts, including mail and wire fraud, and faces up to 20 years in prison if convicted.

Stellmach asked Davis why, after realizing there was fraud, he continued working for the financier.

"I wanted to please Mr. Stanford. I was a coward. I was embarrassed and he signed my paycheck," said Davis, who told jurors he made $14m in salary and bonuses during his employment.

Davis pleaded guilty in 2009 to three counts: conspiracy to commit mail, wire and securities fraud; mail fraud; and conspiracy to obstruct a Securities and Exchange Commission investigation. The plea is part of a deal Davis made with the US justice department in exchange for a possible reduced sentence.

• Allen Stanford
• Antigua & Barbuda
• United States
• Banking

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Leading doctors voice concerns that reforms will suffocate GPs and jeopardise promised freedom to commission care

Two prominent backers of the coalition's NHS shake-up have joined the growing chorus of critics by claiming that GPs will be "suffocated rather than liberated" by the planned changes.

Dr Charles Alessi and Dr Michael Dixon have helped Andrew Lansley claim credibility for his plans among doctors over the past 18 months by strongly supporting his radical restructuring. They are leading lights in the NHS Alliance and the National Association of Primary Care, two key pro-reform organisations.

But they now fear that the new consortiums of local doctors, which will start commissioning healthcare for patients in England from next year, will not have the freedom that the health secretary has repeatedly pledged. Lansley has attempted to persuade sceptics that his reorganisation will put family doctors in charge of healthcare.

NHS primary care trusts (PCTs) and strategic health authorities (SHAs) are due to be abolished next year.

But the doctors are worried that the GP-led clinical commissioning groups (CCGs), which will replace PCTs, will find themselves unexpectedly under the control of another organisation, the NHA National Commissioning Board (NCB).

In July the NHS chief executive, Sir David Nicholson, said "CCGs will be the engine of the new system" and that the reformed NHS "gives pride of place to clinical leaders". But the reality is that primary care doctors and clinical commissioners will not have the promised ability to make key decisions because the current bureaucracy is simply being replaced by another that is growing up around the NCB, the pair claim.

The Department of Health's latest document about the design of the new board involves "layers of bureaucracy and management, with complex guidelines. The old 'footprint' [of the PCTs and SHAs], ie 50 local offices, remains there, plus four sector outposts, all using a single operating model," the two organisations said in a joint statement .

The fact that many of the staff of the new NCB will simply be staff who have joined from PCTs and SHAs "adds to clinical commissioners' concerns and perceptions that they will be suffocated, instead of liberated, which in our view is fundamental to the success of clinically-led commissioning", they added.

"What we are hearing and seeing are the same old messages and the same old structures, albeit with new nomenclatures", said Alessi, a key figure in a CCG in south-west London.

"If we put the same ingredients into the mix, the likelihood is that we shall deliver the same inefficient environment and outcomes. This is insupportable in an economy of tight financial restraint."

Most CCGs now see the new board as the greatest threat to their effective functioning, added Dixon, a GP in Devon and chair of the NHS Alliance.

The pair's comments are another blow to the health secretary as his health and social care bill prepares to undergo its report stage in the House of Lords, when peers will seek to force the government to accept further amendments to its plans. Labour seized on the men's remarks as further evidence of the growing concerns the bill is causing.

"Things are going from bad to worse for Andrew Lansley. In the last fortnight there has been a deepening crisis of professional confidence in the government's health bill, but until now the health secretary could rely on the support of the NHS Alliance and the National Association of Primary Care," said Andy Burnham, the shadow health secretary.

"Yet the bill's biggest cheerleaders are now lambasting the increasing layers of bureaucracy. Even the health bill's greatest supporters are now concerned that Lansley's plans are so complex and full of worrying uncertainties that they risk thwarting the principle of true clinician-led commissioning."

The British Medical Association also fears CCGs' freedom will be curtailed. "There are significant concerns that CCGs will not have genuine freedoms and sufficient independence to make locally sensitive, locally accountable, patient-focussed decisions," it said.

In a briefing to peers ahead of the report stage it says that, despite ministers agreeing to amend several aspects of the bill, the legislation should still be dropped because it involves too much use of "market forces", and could also affect doctors' relationship with their patients through financial incentives for CCGs.

The Department of Health said: "By handing power and responsibility for choosing and purchasing services to doctors and nurses on the ground, we are shifting the decision making closer to patients and building on the trusted role that GPs and other front line professionals already play throughout the NHS.

"The NHS commissioning Board will provide national standards, but doctors and nurses will have the freedom to make decisions about their patients and their organisations."

• NHS
• Health
• Andrew Lansley
• GPs
• Doctors

Denis Campbell
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Emil Boc says he is quitting to 'release tension' after weeks of protests over austerity measures and alleged corruption

The Romanian prime minister and his cabinet have resigned after weeks of sometimes violent protests over widespread corruption and austerity measures.

Emil Boc said on Monday he was quitting "to release the tension in the country's political and social situation".

During his three-year rule, salaries of state employees were cut by a quarter and VAT increased by five percentage points, while the European debt crisis hit Romania's exports hard.

It was a toxic combination in a country that was already the second poorest in the EU, better off only than Bulgaria, which also joined the union in 2007.

The collapse of Boc's cabinet marks the fall of yet another EU government since the euro crisis started to bite. Since 2009, governments in Slovakia, Slovenia, Greece, Italy, Latvia, Ireland and the Czech Republic have imploded before scheduled elections, with economic woes playing a significant role in each demise. Voters in Hungary, Spain and Portugal also signalled their unhappiness with the fiscal policies of their governments, plumping for new leaders at the ballot box.

President Traian Basescu asked foreign intelligence service head Mihai-Razvan Ungureanu to form a new cabinet. Ungureanu quickly pledged to continue the unpopular economic reforms and his appointment may do little to assuage popular anger.

Basescu named justice minister Catalin Predoiu as interim prime minister until Ungureanu puts his team and plans up for parliament's approval, a vote that will probably come next week.

He will be in charge until the new government is formed over the coming weeks and could potentially hold on to the position until the next general election, in November.

Opposition politicians celebrated Boc's departure and called for early parliamentary elections. "This is a victory for those that demonstrated on the streets," said Crin Antonescu, who heads the opposition Liberal party. The "most corrupt, incompetent and lying government" since the 1989 fall of Ceausescu had gone, he said.

Shortly before his resignation, Boc's approval ratings had dipped below 20%, with thousands of Romanians braving freezing temperatures and heavy snow to protest in towns around the country.

They are angry about low living standards and what they say is widespread corruption in a country where the average wage is less than €350 (£290) a month and some villages and even parts of Bucharest have no running water or electricity.

Septimius Parvu, deputy director of the Pro Democracy Association, an NGO based in Bucharest, said Boc's resignation showed a "slow evolution" in Romanian politics. "The change in government shows that politicians are starting to realise they cannot govern without the people," he said. "They were taken by surprise by the protests, which, even if they were not on the scale of those in Russia, for example, took place all over the country and were the biggest seen in Romania for perhaps 20 years."

But one protester, PhD student Stefan Guga, 26, said it was wrong to characterise Boc's departure simply as a victory for the demonstrators. It also showed very pragmatic political and electoral calculations on the part of both governing and opposition parties, he said.

"Boc has been made a scapegoat," he said in a phone interview from Bucharest. "It's not that his party, the Democrat Liberals [PDL], wanted to get rid of him – but they found it very convenient to push for the prime minister's resignation and attribute much of the government's failures over the past years to his personal incompetence."

Guga, who attended many of the protests in Bucharest's University Square, said Boc's leaving was a distraction from the key demands of protesters, which, as well as a respite from painful austerity measures, were for real democracy and an end to corruption. "For the Democrat Liberals Boc's resignation can be seen as a last-minute solution to save a bit of face before the upcoming local and parliamentary elections," he said.

The reality, he said, was that the PDL will now regroup and hope that they can avoid early elections so that come November, they have a better chance of winning back the electorate. The PDL and its allies currently have a slim parliamentary majority.Guga said that if the protesters wanted to see any politician fall on his sword, it was Basescu, the president, a gruff former sea captain who despite holding a position that is theoretically ceremonial has made many policy announcements himself. "He is seen as the man who really pulls the strings in Romania," said Guga. "The image of Boc was just as Basescu's puppet."

Boc, who became prime minister in 2008, urged Romania's feuding politicians to be mature and rapidly vote for a new government. He defended his record, saying he had taken "difficult decisions thinking about the future of Romania, not because I wanted to, but because I had to".

Explaining his resignation in a televised speech, Boc said: "I took this decision to release the tension in the country's political and social situation, but also in order not to lose what Romanians have won.

"I know that I made difficult decisions, but the fruits have begun to appear. The most important thing is the economic stability of the country. In times of crisis, the government is not in a popularity contest, but is saving the country."

He added that the International Monetary Fund (IMF) has forecast growth of up to 2% this year lower than expected, but higher than the EU average.

Committed at some stage to adopting the euro under the terms of its accession to the EU in 2007, Romania is still struggling with the economic legacy of communist state control.

While not suffering the difficulties that the euro created for leaders in the likes of neighbouring Greece, Romania's government also struggled to finance itself without external support and found itself forced to make brutal cuts that enraged ordinary citizens.

In 2009 it was forced to sign up for a €20bn (£16.6bn) loan with the IMF, the EU and the World Bank to help pay salaries and pensions after the economy shrank by more than 7%. The aid was seen as essential to maintain investor confidence, prevent a run on the currency and keep borrowing costs at sustainable levels, even though its public debt to GDP ratio was the fourth lowest in the EU.

In 2010, the government increased sales tax from 19% to 24% and cut public workers' salaries by a quarter.

The IMF mission chief in Bucharest, Jeffrey Franks, told Reuters: "I see no reason necessarily for this to have a material effect on the aid agreement. We have every expectation the agreement will continue."

Paul Ivan, research assistant at the Centre for European Policy Studies, said the resignation was not a surprise. "There had been repeated calls for this," he said in a phone interview from Brussels. "The population had become increasingly unhappy with the austerity policies of the government."

But Ivan said Romania's economic problems were not just caused by domestic policies but external ones too. "Romania's economy is very reliant on the fortunes of the rest of the European Union. So when growth in other countries practically stopped, exports decreased and firms here started to lay off staff," he said.

Romania's textile and car industries have been particularly hard-hit, he said. French carmaker Renault has a big Romanian plant which produces the Logan under the badge of its Romanian subsidiary, Dacia.

Most of Romania's banks are also foreign-owned, said Ivan, meaning that when the debt crisis dug in, they were ever more reluctant to issue loans and mortgages.

• Romania
• Europe
• European Union
• Eurozone crisis

Helen Pidd
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Neuroscience breakthroughs could be harnessed by military and law enforcers, says Royal Society report

Soldiers could have their minds plugged directly into weapons systems, undergo brain scans during recruitment and take courses of neural stimulation to boost their learning, if the armed forces embrace the latest developments in neuroscience to hone the performance of their troops.

These scenarios are described in a report into the military and law enforcement uses of neuroscience, published on Tuesday, which also highlights a raft of legal and ethical concerns that innovations in the field may bring.

The report by the Royal Society, the UK's national academy of science, says that while the rapid advance of neuroscience is expected to benefit society and improve treatments for brain disease and mental illness, it also has substantial security applications that should be carefully analysed.

The report's authors also anticipate new designer drugs that boost performance, make captives more talkative and make enemy troops fall asleep.

"Neuroscience will have more of an impact in the future," said Rod Flower, chair of the report's working group.

"People can see a lot of possibilities, but so far very few have made their way through to actual use.

"All leaps forward start out this way. You have a groundswell of ideas and suddenly you get a step change."

The authors argue that while hostile uses of neuroscience and related technologies are ever more likely, scientists remain almost oblivious to the dual uses of their research.

The report calls for a fresh effort to educate neuroscientists about such uses of the work early in their careers.

Some techniques used widely in neuroscience are on the brink of being adopted by the military to improve the training of soldiers, pilots and other personnel.

A growing body of research suggests that passing weak electrical signals through the skull, using transcranial direct current stimulation (tDCS), can improve people's performance in some tasks.

One study cited by the report described how US neuroscientists employed tDCS to improve people's ability to spot roadside bombs, snipers and other hidden threats in a virtual reality training programme used by US troops bound for the Middle East.

"Those who had tDCS learned to spot the targets much quicker," said Vince Clark, a cognitive neuroscientist and lead author on the study at the University of New Mexico. "Their accuracy increased twice as fast as those who had minimal brain stimulation. I was shocked that the effect was so large."

Clark, whose wider research on tDCS could lead to radical therapies for those with dementia, psychiatric disorders and learning difficulties, admits to a tension in knowing that neuroscience will be used by the military.

"As a scientist I dislike that someone might be hurt by my work. I want to reduce suffering, to make the world a better place, but there are people in the world with different intentions, and I don't know how to deal with that.

"If I stop my work, the people who might be helped won't be helped. Almost any technology has a defence application."

Research with tDCS is in its infancy, but work so far suggests it might help people by boosting their attention and memory. According to the Royal Society report, when used with brain imaging systems, tDCS "may prove to be the much sought-after tool to enhance learning in a military context".

One of the report's most striking scenarios involves the use of devices called brain-machine interfaces (BMIs) to connect people's brains directly to military technology, including drones and other weapons systems.

The work builds on research that has enabled people to control cursors and artificial limbs through BMIs that read their brain signals.

"Since the human brain can process images, such as targets, much faster than the subject is consciously aware of, a neurally interfaced weapons system could provide significant advantages over other system control methods in terms of speed and accuracy," the report states.

The authors go on to stress the ethical and legal concerns that surround the use of BMIs by the military. Flower, a professor of pharmacology at the William Harvey Research Institute at Barts and the London hospital, said: "If you are controlling a drone and you shoot the wrong target or bomb a wedding party, who is responsible for that action? Is it you or the BMI?

"There's a blurring of the line between individual responsibility and the functioning of the machine. Where do you stop and the machine begin?"

Another tool expected to enter military use is the EEG (electroencephalogram), which uses a hairnet of electrodes to record brainwaves through the skull. Used with a system called "neurofeedback", people can learn to control their brainwaves and improve their skills.

According to the report, the technique has been shown to improve training in golfers and archers.

The US military research organisation, Darpa, has already used EEG to help spot targets in satellite images that were missed by the person screening them. The EEG traces revealed that the brain sometimes noticed targets but failed to make them conscious thoughts. Staff used the EEG traces to select a group of images for closer inspection and improved their target detection threefold, the report notes.

Work on brain connectivity has already raised the prospect of using scans to select fast learners during recruitment drives.

Research last year by Scott Grafton at the University of California, Santa Barbara, drew on functional magnetic resonance imaging (fMRI) scans to measure the flexibility of brain networks. They found that a person's flexibility helped predict how quickly they would learn a new task.

Other studies suggest neuroscience could help distinguish risk-takers from more conservative decision-makers, and so help with assessments of whether they are better suited to peacekeeping missions or special forces, the report states.

"Informal assessment occurs routinely throughout the military community. The issue is whether adopting more formal techniques based on the results of research in neuroeconomics, neuropsychology and other neuroscience disciplines confers an advantage in decision-making."

• Neuroscience
• Weapons technology
• Royal Society
• Military
• US military
• United States
• Mental health
• Health

Ian Sample
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Executive order halts transactions by Iranian bank in US, despite concerns that it may drive up petroleum costs

Barack Obama has ordered the freezing of Iranian government assets in the US, including transactions by the Iranian Central Bank, in tightened sanctions over Tehran's nuclear programme.

The White House said the executive order by the president "re-emphasises this administration's message to the government of Iran – it will face ever-increasing economic and diplomatic pressure until it addresses the international community's well-founded and well-documented concerns regarding the nature of its nuclear programme".

The new sanctions, which also include the threat of prosecution for foreign financial institutions if they do certain kinds of business directly with Iran, also appeared timed to fit in with measures introduced in other countries, including Britain which has already moved against Iran's banking system by cutting it off from London's financial sector.

The administration had previously shied away from direct action against the central bank fearing that if Tehran is unable to carry through financial transactions necessary to sell its oil, that could force the cost of petroleum up and hit the US economy.

But Congress pushed sanctions against the bank through in legislation attached to the US's annual defence spending bill. The president had the power to stall them but that was politically sensitive with a growing chorus of Republicans and some Democrats demanding stronger measures against Tehran.

Obama said in a statement to Congress that the new sanctions are required in part because the central bank is using "deceptive practices" to get around earlier measures.

"I have determined that additional sanctions are warranted, particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks to conceal transactions of sanctioned parties, the deficiencies in Iran's anti-money laundering regime and the weaknesses in its implementation, and the continuing and unacceptable risk posed to the international financial system by Iran's activities," he said.

The scale of Iranian official assets in the US is unclear given more than three decades of sanctions since the 1979 Islamic revolution.

In November, the US announced measures intended to limit Tehran's ability to refine its own fuel as well as targeting Iran's Revolutionary Guards' financial interests.

The US and European Union have also imposed additional sanctions on Iran's oil industry in recent weeks.

The new sanctions also come as Obama tries to dissuade Israel from a unilateral strike against Iranian nuclear facilities. Last week, US defence secretary Leon Panetta said he believes Israel may launch an attack before June.

On Sunday, Obama said he does not believe Israel has yet made the decision whether or not to attack. But he told NBC that all options remain on the table for US action if Iran presses ahead with developing a nuclear weapon.

"I think we have a very good estimate of when they could potentially achieve breakout capacity, what stage they're at in terms of processing uranium. But do we know all the dynamics inside Iran? Absolutely not," he said. "Knowing who is making decisions at any given time inside Iran is tough but we do have a pretty good bead on what's happening with the nuclear programme."

• Iran
• United States
• Nuclear weapons

Chris McGreal
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Radical Islamist cleric will walk free from Long Lartin maximum security prison after more than six years without trial

The Home Office clashed openly with judges on Monday when it criticised a decision to free on bail within days the radical Islamist cleric Abu Qatada, who is accused of posing a grave threat to British national security.

The decision by Mr Justice Mitting will see Abu Qatada, once described as Osama bin Laden's righthand man in Europe, walk out of Long Lartin maximum security prison in Worcestershire after more than six and a half years in detention without trial – the longest period in modern times.

The special immigration appeals commission (Siac) has imposed some of the most draconian bail conditions seen since 9/11, including a 22-hour curfew, but this did little to assuage the anger of the Home Office ministers or politicians from all parties at the decision.

The clash takes the battle between politicians and the judiciary into new territory as Abu Qatada is a major international terror suspect. He was first detained without trial in Britain under the quashed Belmarsh regime nearly a decade ago, in October 2002.

The decision taken by the high court judge at Siac follows the ruling by the European court of human rights that he could not be deported to Jordan because he would face a "flagrant denial of justice" – a retrial based on evidence obtained through torture. Abu Qatada had been detained under immigration laws for the past six and half years pending his deportation to Jordan.

A Home Office spokesperson said he should remain in detention: "This is the argument we made in court and we disagree with its decision. This is a dangerous man who we believe poses a real threat to our security and who has not changed in his views or attitude to the UK."

The Home Office said it will consider an appeal against the European court's ruling. It will also continue a fresh attempt to secure diplomatic assurances from Jordan that Abu Qatada will not face a trial based on torture-tainted evidence.

The British ambassador held two meetings last week with the Jordanian authorities to try to open talks on the issue.

But the decision angered both Labour and Conservative backbenchers. The former Labour home secretary David Blunkett said the decision had left the government facing a very real difficulty: "It is an unholy mess. We are left in the absurd position of not being able to remove a man even though everyone accepts he won't be tortured, not being able to keep him in prison because his human rights trump the protection of the British people, and a government that has watered down control orders so that they are more lax than was previously the case."

The Conservative backbencher Dominic Raab echoed Blunkett's anger: "This result is a direct result of the perverse ruling by the Strasbourg court. It makes a mockery of human rights law that a terrorist suspect deemed 'dangerous' by our courts can't be returned home, not for fear that he might be tortured, but because European judges don't trust the Jordanian justice system."

The bail conditions set down by Mr Justice Mitting are draconian, comprising a 22-hour curfew rather than the "overnight residence requirement" specified in the coalition's replacement for control orders. They include an electronic tag, MI5 vetting of all his visitors except for immediate family, and monitoring of his communications. The delay in his release is to allow the security services to check the proposed bail address and organise their surveillance operation.

In his ruling, the judge said that although the six and half years Abu Qatada had been detained under immigration powers was "unusually long", he agreed with the home secretary that it was also lawfully justified. However, he added: "The time will arrive quite soon when continuing detention or deprivation of liberty could not be justified." The Siac judge warned the home secretary, Theresa May, that Abu Qatada's "highly prescriptive" bail terms would be relaxed after three months if there is no "demonstrable progress" made with the Jordanians.

The bail conditions mirror those set in 2008 when he was released for six months before being returned to prison on unspecified national security grounds. The judge said the risks to national security and of absconding in the case had not significantly changed since then.

During the one-day bail hearing, Edward Fitzgerald QC, representing Abu Qatada, argued that his detention had gone on too long to be reasonable and there was no prospect of the detention ending in any reasonable period. Even if new diplomatic assurances were secured it would only trigger a new round of litigation in the English courts."There comes a time when it's just too long, however grave the risks," said Fitzgerald.

The shadow home secretary, Yvette Cooper, said May had to explain urgently what action she was taking on the national security implications of the ruling. "Abu Qatada should face terror charges in Jordan, and the home secretary needs to urgently accelerate discussions with the Jordanian government to make that possible," she said. The home secretary also had to spell out the counter-terror safeguards that will be taken to lower the national security risk.

The security services have never disclosed the actual cost of mounting round-the-clock surveillance operations on terror suspects such as Abu Qatada but it does have serious implications for their resources.

Abu Qatada, whose real name is Omar Othman, 51, featured in hate sermons found on videos in the flat of one of the 9/11 bombers. Since his original detention in October 2002, every attempt to deport him to Jordan has been frustrated. The law lords ruled three years ago that he could be sent back but the Strasbourg decision overturned that ruling.

• Terrorism policy
• Abu Qatada
• Global terrorism
• UK security and terrorism
• Immigration and asylum
• Jordan
• Human Rights Act
• Human rights

Alan Travis
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• Exasperated Angela Merkel warns 'time is of the essence'
• Portugal's PM says 'we will not allow it to happen here'

Greece appeared intent on taking make-or-break talks over a €130bn (£108bn) rescue programme for the debt-choked country down to the wire tonight as officials announced that the discussions would be delayed.

Confounding market expectation and European hopes, the government said agreement over the conditions attached to further aid could not be reached as a meeting between political chiefs and the prime minister, Lucas Papademos, had been deferred until today.

"All parties have basically accepted the deal," said a well-briefed source, referring to the three elements in Papademos's national unity coalition. "But it is felt that the details have to be fine-tuned. The leaders want to know what they are signing up to."

With Greece staring at the spectre of bankruptcy – barely six weeks before it has to make bond repayments worth €14.5bn – EU officials expressed disbelief that politicians could not finally put their name to an accord.

Unable to conceal her own exasperation, the German chancellor, Angela Merkel, said: "I honestly can't understand how additional days will help.

"Time is of the essence. A lot is at stake for the entire eurozone," she said after holding debt crisis talks in Paris with the French president, Nicolas Sarkozy.

Papademos, a technocrat who was appointed to the post with the express purpose of passing the measures to secure the bailout deal, originally told the leaders to conclude talks by midday.

But the deadline came and went. Infuriated, Amadeu Altafaj-Tardio, a spokesman for the European economic affairs commissioner Olli Rehn, said: "The truth is we are already beyond deadline … the ball is in the court of the Greek authorities."

Hours later, the prime minister's office announced that the meeting would take place in the "late afternoon". Rumours swirled that a deal was near, with headway made on the highly contentious issues of wage cuts in the private sector. In anticipation, the Athens stock market rallied.

By mid-afternoon, however, the meeting had been cancelled with officials saying Papademos would instead hold talks with visiting inspectors from the European Union, European Central Bank and International Monetary Fund, the "troika" propping up the insolvent Greek economy.

The postponement confirmed that ahead of general elections in April the high-stake talks have also been turned into a high-stakes game of brinkmanship.

Acutely aware of the uproar that further austerity is bound to ignite among a populace that has endured unprecedented belt-tightening but seen little in return as Athens repeatedly misses fiscal targets, Greece's political class has worked furiously to disassociate itself from reforms increasingly seen as counter-productive.

Emerging from a marathon session of similar talks on Sunday, Giorgos Karatzaferis, the media-savvy leader of the populist Laos party, said: "I'm not going to contribute to the explosion of a revolution [by backing] a wretchedness that will then spread across Europe."

Racheting up the pressure on politicians, powerful unionists in both the public and private sector warned that the reaction to any agreement entailing further austerity would be "ferocious and possibly uncontrollable". A general strike was called for Tuesday with civil servants and workers saying they would step up action later in the week.

Ilias Iliopoulos, at the civil servants' union ADEDY, said: "We don't care if they feel forced to accept such measures. The fact is 500,000 families are not even earning a euro a week and another million only have work sporadically."

"Greek people can't take the burden of any more measures. If our politicians are foolish enough to agree to what our so-called saviours say, if they go ahead with yet more cuts and job losses, there will be an explosion. The reaction will be uncontrollable."

The deadlock immediately raised fears that three years into the crisis, Greece might finally be heading for the disorderly default international creditors, lead by Germany in the EU, have tried to avert.

But in Athens analysts insisted that the real threat to keeping bankruptcy at bay lay not so much in the negotiating arena as in a society seething with anger over the prospect of more austerity.

"The Greek side has no cards in its hand," said Theodore Pelagidis, professor of economics at Piraeus University. "This is not about not accepting the bailout but about politicians wanting to convince Greeks that they have not just submitted to the demands of foreign lenders but done their utmost to get the best deal. Yes, there are a lot of painful details that have to be discussed but all these delays are actually part of a show."

Eurozone finance ministers have told Greece that they want a blueprint of a basic deal to be approved by Wednesday's meeting in Brussels.

No longer willing to take any chances, Papademos on Monday ordered the finance ministry to outline what consequences bankruptcy might have on society and the economy. One Greek official said it would make Argentina "look like a picnic".

Papademos's plan is to present the findings to Greece's squabbling political leaders on Tuesday to ensure they sign off on the deal immediately.

As Greece failed to resolve its crisis, the Portuguese prime minister attempted to stave off speculation that his country would be the next to find itself in talks over a rescue package. Pedro Passos Coelho said Portugal's debts were under control and could be contained without the need of a fresh injection from the EU.

"We will not allow what happened in Greece to happen here," he said. "We hope that there will be the will to reach a new aid programme for Greece."

Coelho likened Portugal to Ireland, which he said had a debt structure that would delay the need for loan repayments until next year. "Our debt profile is very similar to Ireland's, both in absolute value and in debt to GDP terms," he said.

• Eurozone crisis
• Greece
• Europe
• European Union
• European monetary union
• Economics
• Banking
• European banks
• Financial crisis
• Financial sector
• Euro
• European Central Bank
• IMF

Phillip InmanHelena Smith
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Daily Mail editor in chief tells Leveson inquiry he wants tough sanctions for those who break the law or lower standards

The editor in chief of the Daily Mail has called for a new system of certifying journalists, with tough sanctions for those who fall below acceptable standards or break the law.

Paul Dacre also called on the industry to introduce a transitional arrangement to replace the much-criticised Press Complaints Commission as soon as possible to show newspapers had "good intentions" to break from a past tarnished by allegations of phone hacking, corruption and computer hacking.

Outlining his vision of the future, Dacre said the new system of accreditation of journalists would act as a "Kitemark" for standards. He suggested that journalists not carrying an accredited card would be barred from covering events such as key government briefings or interviews relating to sporting fixtures.

A new ombudsman for standards should also have the right to recommend a journalist be struck off, just as doctors can be struck off by the General Medical Council, he said. "The public at large would know the journalists carrying such cards are bona fide operators, committed to a set of standards and a body to whom complaints can be made."

Over three and a half hours, an at times testy Dacre was questioned at the Leveson inquiry about the behaviour of his own staff in relation to a litany of stories that have been criticised by other Leveson witnesses, including ones on Madeleine McCann, Christopher Jefferies, Hugh Grant and the late Boyzone singer Stephen Gately.

He launched a robust defence of his decision to describe Grant's evidence as "mendacious smears", declaring that the actor's claim that a story about him may have been sourced from phone hacking was damaging to his newspaper.

"If I had allowed it to stand it would have been devastating for our reputation and it needed rebutting instantly."

Dacre repeatedly claimed that Grant had brought much of the attention he complained about upon himself. He said Grant "invaded his privacy with great proficiency" by frequently talking in public about private matters, including his desire to have a child. But he did accept that the behaviour of the paparazzi about whom Grant and others have complained was an issue. "I think there are broader issues that the industry needs to look at. The problem of paparazzi, that worries me – I think we need to try to look at that."

Dacre admitted that he knew the newspaper had used a private detective, Steve Whittamore, who was convicted in 2005 of illegally accessing confidential records such as ex-directory numbers.

He said he thought he became aware of the use of Whittamore "some time about 2004, 2005-ish" but said he was not aware of the extent of his use or that he might have been obtaining information illegally. Asked whether he thought it was acceptable to get hold of a person's "friends and family" telephone numbers, he said the information could have been obtained legally but Whittamore "was a quick and easy way to get that information".

He said he would now accept there was a "prima facie case that Mr Whittamore could have been acting illegally" but he did not accept this as "evidence our journalists were actively behaving illegally".

At times exasperated by the inquiry's line of questioning, Dacre pressed the point that he had demonstrated "huge willpower and vigour to stamp out and change of all of this", banning the use of detective agencies, writing the Data Protection Act into journalists' contracts and holding seminars for staff.

He told Leveson: "Goodness knows, I don't know what more I could have done." Dacre also mounted a staunch defence of Jan Moir, the columnist who was the subject of 25,000 complaints following a piece she wrote about the death of Gately.

"I would die in the ditch to defend any of my columnists' rights to say whatever they wish", he said, adding that she hadn't "a homophobic bone in her body". But he did observe that her column could have benefitted from some "judicious subbing [editing]" that day.

Dacre told the inquiry he had turned down an offer to edit the Times because it would have curbed his independence. He described Rupert Murdoch as a "great proprietor in his time" but said he would not have given him the necessary freedom. He said there was no doubt Murdoch "had strong views" which he expected to be followed by his editors. "The classic case is the Iraq war" and the "implacable support" he gave Tony Blair, said Dacre.

Dacre reserved the more forceful side of his personality for the issue of the importance of the press to society.

He said his paper had written hundreds and thousands of stories and the inquiry was alighting on a few negative examples. The British public were being given "a very bleak, one-sided view" of an industry that employs thousands.

• Leveson inquiry
• Paul Dacre
• Daily Mail
• Newspapers & magazines
• National newspapers

Lisa O'Carroll
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£50bn merger with Xstrata will be latest City coup for billionaires behind commodities trader

More than £50m of World Food Programme aid to feed the starving has ended up in the hands of a London-listed commodities trader run by billionaires, despite a pledge by the United Nations agency to buy food from "very poor farmers".

Glencore International, which buys up supplies from farmers and sells them on at a profit, was the biggest single supplier of wheat to the WFP over the last eight months, the Guardian can reveal.

Glencore, which was able to operate with secrecy from its base in Baar, Switzerland, until it floated on the London stock exchange last May, is expected on Tuesday to announce a merger with mining group Xstrata to become one of the 10 biggest FTSE 100 companies with a market value of more than £50bn.

Details of the dealings with Glencore, which controls 8% of the global wheat market, emerged a year after the head of the WFP committed to buying food from local farmers.

"Our new motto is to help people feed themselves," Josette Sheeran, the executive director of the WFP, told China's state news agency. "When we can, we purchase our food from the very poor farmers who suffer because they are not connected to local markets."

Raj Patel, an economist expert in the global food trade and former UN employee, said it was shocking how much food aid money was "funnelling to one of the largest commodity traders".

The rising price of wheat has squeezed the incomes of millions of the world's poorest people. Many have been forced to turn to the WFP, which last year fed more than 90 million people in 73 countries.

Over the last eight months Glencore has sold wheat worth $78m (£50m) to the WFP, according to details of contracts published on the agency's website.

In the biggest single deal, the WFP bought $22.5m of Glencore wheat in July last year to feed Ethiopians in one the worst famines in recent memory. The WFP also bought Glencore wheat, sorghum and yellow split peas for Kenya, Djibouti, Bangladesh, Sudan, North Korea and Palestine. Last month the WFP spent $10.8m on wheat for drought-stricken Djibouti.

In its latest half-year financial results Glencore, which previously attracted controversy for environmental breaches and accusations of dealing with rogue states, including Iraq under Saddam Hussein, reported that revenue from agricultural products doubled to $8.8bn. The company said its performance had been "driven by stronger profits in grains and oil seeds" for which "prices were substantially higher in H1 [the first half of] 2011 compared to H1 2010".

The company said: "There were increased geographic arbitrage opportunities [buying commodities cheaper in order to sell them on later at a higher price] available in wheat and edible oils." It said the average wheat price of a bushel [8 gallons] of wheat increased by 60% over the previous year to $778.

A spokeswoman for the WFP said: "As a humanitarian agency that depends entirely on voluntary donations we always aim to get the most competitive price when purchasing food on the open markets. Rising food prices do have an impact on our budget and they can be driven up by any number of factors, including speculation."

Glencore said it won the WFP tenders because "we were able to offer the commodities needed at the lowest possible price".

Rob Bailey, a senior research fellow in food security at Chatham House in London, said the WFP often buys from traders such as Glencore, Cargill and Viterra, because food donations are not available and local farmers cannot provide the quantities needed. "It is concerning that the World Food Programme is left at the whim of international markets precisely when prices are high," he said.

"Such crisis periods of high volatility are also when the big traders make the most money, because they have the best information on likely supply and demand and how markets are going to evolve, allowing them to take positions in the market to turn profits."

John Hilary, the executive director of the War on Want, said: "Glencore's self-confessed speculation on grain markets last year forced up prices at a time of world shortage, driving more people into extreme hunger. The WFP needs to rethink its priorities and support local markets rather than corporate giants such as Glencore."

Patel, the author of Stuffed and Starved: Markets, Power and the Hidden Battle for the World's Food System, said: "It's a shocking amount of money to be funnelling to one of the largest commodity traders. That financial entities are now making their presence felt – and Glencore is among the most powerful of these new corporations – points to the increasing financialisation of food in the 21st century."

Glencore admitted that it bet on a rising wheat price after drought in Russia, according to investment bank UBS. "[Glencore's] agricultural team received very timely reports from Russia farm assets that growing conditions were deteriorating aggressively in the spring and summer of 2010, as the Russian drought set in … This put it in a position to make proprietary trades going long on wheat and corn," UBS said in a report to potential investors, disclosed by the Financial Times.

On 3 August 2010 the head of Glencore's Russian grain business, Yury Ognev, urged Moscow to ban grain exports, according to the UBS report. Two days later Russian authorities banned wheat exports, which forced prices up by 15% in two days.

On Monday Glencore said UBS's account of its role in the Russian grain crisis was "simply untrue. In any case, the export ban did not help our business".

A spokesman said: "We share the view that financial speculation in agricultural products markets can be harmful. Our business is physical – we produce, buy, store and blend agricultural commodities.

"We bridge the gap between harvests that last for a couple of weeks and demand which is fairly constant throughout the year.

"Because we are physical holders, we are always net sellers in the agricultural products futures markets which actually has a downward effect on the prices of agricultural products futures."

Glencore's chief executive, Ivan Glasenberg, earned the moniker "the $10 billion man" when his stake was valued at £5.76bn at last May's flotation. Four other partners – Daniel Maté, Telis Mistakidis, Tor Peterson and Alex Beard – were also made paper billionaires. More than $3.6bn was given to the WFP last year, with the US contributing $1.2bn and the UK £144m.

Merger deal anticipated

Glencore is on Tuesday expected to announce plans to merge with mining group Xstrata to become one of the 10 biggest companies listed on the London stock market. It will be the latest move in Glencore's journey from secretive trading house founded by Marc Rich, a commodities traderwho was charged by US authorities with selling oil to Iran during the 1979-81 hostage crisis, to global powerhouse in the sale of commodities from copper and coal to sugar and wheat.

The largest shareholder in the combined company – dubbed Glenstrata – will be Ivan Glasenberg, Glencore's multibillionaire chief executive. But Glasenberg, who makes so much money he indirectly funded a generous Christmas tax break for the other residents of the Swiss village where he lives, is understood to be planning to step aside to become deputy to Mick "the miner" Davis, the head of Xstrata.

Davis, already one the highest paid executives in the FTSE 100, is likely to be offered a "golden handcuffs" deal to stay at the company. A change of control clause could also see Davis collect an additional £10.7m in long-term shares.

The deal is likely to see Glencore pay about an 8% premium to buy up the Xstrata shares it does not already own.

Sir John Bond, Xstrata's chairman and a former chair of HSBC and Vodafone, will lead the Glenstrata board, while Glencore's chairman Simon Murray, who has been attacked for his "unbelievably primitive" views on women in business, is likely to step aside.

Tony Hayward, the former boss of BP, is likely to be appointed the senior independent director of the combined company, which will have more than 120,000 staff across five continents.

• Glencore
• United Nations
• Stock markets
• IPOs
• Food security
• Famine
• Farming
• Xstrata

Rupert Neate
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Former Northern Ireland first minister, 85, is being treated in Ulster hospital, his wife confirms

Former Northern Ireland first minister Ian Paisley is in intensive care in hospital after suffering respiratory problems.

The family of the 85-year-old founder of the Democratic Unionist party, now officially known as Lord Bannside, confirmed that he was being treated in Ulster hospital on the outskirts of east Belfast.

In a statement issued on Monday afternoon his wife, Lady Paisley, requested that "the family's privacy be respected at this time".

The veteran unionist politician and fundamentalist Protestant preacher took ill at the family home in east Belfast on Sunday. DUP members of the Northern Ireland assembly were briefed on their ex-leader's medical condition in the Stormont parliament.

Last year Paisley had a pacemaker fitted at St Thomas's hospital in London after he fell ill at Westminster. Paramedics had to revive him after he collapsed in parliament.

Since he stepped down as first minister Paisley has slowly retreated from public life. In December he announced his retirement as a preacher in the Free Presbyterian church, the hardline Protestant sect he founded in the 1960s.

His final sermon took place last week in the Martyrs Memorial Church in Belfast. He told worshippers inside the church he helped build that he wanted to take time out to write his autobiography.

For nearly five decades Paisley was a colossal presence in Ulster politics. He established the DUP in 1971 and opposed every attempt by successive British and Irish governments to create a power-sharing government between nationalists and unionists in Northern Ireland.

When he moved aside as DUP leader he was succeeded by his long-time deputy and closest political confidant Peter Robinson.

However, Paisley stunned the political world in 2006 when, after the St Andrews agreement, he indicated that the DUP would share power with their former enemies in Sinn Féin. As a result, he and ex-IRA member Martin McGuinness became first and deputy first ministers of Northern Ireland. The pair struck up an unlikely rapport and gained the nickname "the Chuckle Brothers" because at public events they were often seen smiling together.

During his long reign as head of the Free Presbyterian church Paisley embarked on several moral crusades, including an unsuccessful battle to oppose the legalisation of homosexuality in Northern Ireland.

In opposition to Paisley's "Save Ulster from Sodomy" campaign, the Northern Ireland Gay Rights Movement depicted him as an "ayatollah" who was watching everyone in the province.

• Ian Paisley
• Northern Ireland

Henry McDonald
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Online dating is now one of the most common ways to start a relationship. But is it fulfilling our dreams – or shattering our cherished ideal of romance?

'I'm telling you, this is Love Year Zero, the Year of True Love, the Real Thing." So writes cinderella69 (AKA Jennifer – she was born in 1969) in her blog about her online dating experiences. "You couldn't do this until now. You went on waiting and waiting for your Prince, and you still had a long wait ahead of you, because he didn't know you were waiting, poor thing. Now you're on the net, and everyone knows it. It can't fail to work. All you have to do is look."

She's right. Last millennium 72% of us met our partners at school or university, at work or in networks of family or friends. The other 28%, presumably, met the loves of their lives by tripping over them as they lay in their own filth outside a Black Country pub. Or such were mating rites in my day. The internet is revolutionary because it renders it easy for us to make contact with people we don't know and, better yet, those who don't necessarily live within the Dudley travel-to-work area/look like trolls/cite assembling Airfix models as their favourite hobby even though they're 43, etc.

According to a new survey by psychologists at the University of Rochester in the US, online dating is the second most common way of starting a relationship – after meeting through friends. It has become popular in part, says one of the report's authors, Professor Harry Reis, because other methods are widely thought of as grossly inefficient. "The internet holds great promise for helping adults form healthy and supportive romantic partnerships, and those relationships are one of the best predictors of emotional and physical health," he says.

The Guardian, for example, has had its own and very successful online dating site, Soulmates, since 2004 – more than 650,000 have registered. It can put you in touch with Guardian readers – true, that may be some people's worst nightmare, but it does mean you won't get propositioned online by someone whose leisure activities are attending English Defence League demos and you won't have to explain on a date that Marcel Proust wasn't an F1 racing driver.

Online dating offers the dream of removing the historic obstacles to true love (time, space, your dad sitting on the porch with a shotgun across his lap and an expression that says no boy is good enough for my girl). And online dating sites, which in the US are growing at 70% a year, surely make it easier than ever to meet the Prince Charming or the Fairytale Princess of your, frankly, infantile dreams. At least that's what cinderella69 believes.

But she's also wrong: it often fails to work – not least because elsewhere in cyberspace there are people like Nick, who aren't looking for love from online dating sites, but for sexual encounters as perishable and substitutable as yoghurt. In his sex blog, Nick works out that he got 77.7% of the women he has met through online dating sites into bed on the first night, and that 55% of his dates were "one-offs", three were "frigid", two were "not too great", eight "hot" and two "atomic". I know, I know: who'd have thought atomic sex was desirable rather than a trip to A&E waiting to happen? Thanks to the internet, such spreadsheets of love have replaced notches on the bedpost and can be displayed hubristically online.

But there's another problem for the lie-dream of online romantic fulfilment: in the hypermarket of desire, as in a large Tesco's breakfast cereal aisle, it's almost impossible to choose.

"When you look at their profiles, they're all the same," wails channelchris in her blog. "Charming, sporty, generous, funny, 'no mind games', good-looking, sensual ... They practically guarantee you'll be on cloud nine."

When everyone is presenting themselves as practically perfect in every way, then you're bound to worry you've signed up for a libido-frustrating yawnathon.

The foregoing sex bloggers are quoted by Sorbonne sociologist Jean-Claude Kaufmann in his new book Love Online, in which he reflects on what has happened to romantic relationships since the millennium. The landscape of dating has changed completely, he argues. We used to have yentas or parents to help us get married; now we have to fend for ourselves. We have more freedom and autonomy in our romantic lives than ever and some of us have used that liberty to change the goals: monogamy and marriage are no longer the aims for many of us; sex, reconfigured as a harmless leisure activity involving the maximising of pleasure and the minimising of the hassle of commitment, often is. Online dating sites have accelerated these changes, heightening the hopes for and deepening the pitfalls of sex and love.

"I've been researching love and coupledom for 30 years and now the internet has brusquely changed the rules of dating," Kaufmann tells me. "Love isn't an eternal given – it evolves with societies. And people want to know how it functions now. It's urgent to analyse it."

Kaufmann isn't the only intellectual analysing the new landscape of love. Behavioural economist Dan Ariely is researching online dating because it affects to offer a solution for a market that wasn't working very well. Oxford evolutionary anthropologist Robin Dunbar will soon publish a book called The Science of Love and Betrayal, in which he wonders whether science can helps us with our romantic relationships. And one of France's greatest living philosophers, Alain Badiou, is poised to publish In Praise of Love, in which he argues that online dating sites destroy our most cherished romantic ideal, namely love.

Ariely started thinking about online dating because one of his colleagues down the corridor, a lonely assistant professor in a new town with no friends who worked long hours, failed miserably at online dating. Ariely wondered what had gone wrong. Surely, he thought, online dating sites had global reach, economies of scale and algorithms ensuring utility maximisation (this way of talking about dating, incidentally, explains why so many behavioural economists spend Saturday nights getting intimate with single-portion lasagnes).

Online dating is, Ariely argues, unremittingly miserable. The main problem, he suggests, is that online dating sites assume that if you've seen a photo, got a guy's inside-leg measurement and star sign, BMI index and electoral preferences, you're all set to get it on à la Marvin Gaye, right? Wrong. "They think that we're like digital cameras, that you can describe somebody by their height and weight and political affiliation and so on. But it turns out people are much more like wine. When you taste the wine, you could describe it, but it's not a very useful description. But you know if you like it or don't. And it's the complexity and the completeness of the experience that tells you if you like a person or not. And this breaking into attributes turns out not to be very informative."

So he decided to set up a website that could better deliver what people want to know about each other before they become attracted. His model was real dates. "Dates are not about sitting in the room and interviewing each other about questions; they're often about experiencing something together in the real world. If you and I went out, and we went somewhere, I would look at how you react to the outside world. What music you like, what you don't like, what kind of pictures you like, how do you react to other people, what do you do in the restaurant. And through all these kind of non-explicit aspects, I will learn something about you."

His online system gave visitors an avatar with which to explore a virtual space. "There were pictures and images and there were words and movies and bands, all kinds of stuff, and when you came to another little avatar, you could start chatting. It wasn't about where you went to school and what's your religion; it was about something else, and it turns out it gave people much more information about each other, and they were much more likely to want to meet each other for a first date and for a second date."

Badiou found the opposite problem with online sites: not that they are disappointing, but they make the wild promise that love online can be hermetically sealed from disappointment. The septuagenarian Hegelian philosopher writes in his book of being in the world capital of romance (Paris) and everywhere coming across posters for Meetic, which styles itself as Europe's leading online dating agency. Their slogans read: "Have love without risk", "One can be in love without falling in love" and "You can be perfectly in love without having to suffer".

Badiou worried that the site was offering the equivalent of car insurance: a fully comp policy that eliminated any risk of you being out of pocket or suffering any personal upset. But love isn't like that, he complains. Love is, for him, about adventure and risk, not security and comfort. But, as he recognises, in modern liberal society this is an unwelcome thought: for us, love is a useless risk. "I really think that love, in our world such as it is, is encircled, threatened. And I think it's a philosophical task, among others, to defend it."

Across Paris, Kaufmann is of a similar mind. He believes that in the new millennium a new leisure activity emerged. It was called sex and we'd never had it so good. He writes: "As the second millennium got underway the combination of two very different phenomena (the rise of the internet and women's assertion of their right to have a good time), suddenly accelerated this trend ... Basically, sex had become a very ordinary activity that had nothing to do with the terrible fears and thrilling transgressions of the past." Best of all, perhaps, it had nothing to do with marriage, monogamy or motherhood but was devoted to enjoyment, to that scarcely translatable (but fun-sounding) French word jouissance.

Thanks to online dating sites, Kaufmann suggests, "there was now a vast hypermarket for love and/or sex, in which everyone was both a buyer and seller who openly stated what they wanted and tried to satisfy their needs as efficiently as possible. All they needed to do was sign up, pay a modest fee (getting a date costs less than going to see a film), write a blog or use a social networking site. Nothing could be easier."

In a sense, though, sex and love are opposites. One is something that could (but perhaps shouldn't) be exchanged for money or non-financial favours; the other is that which resists being reduced to economic parameters. The problem is that we want both, often at the same time, without realising that they are not at all the same thing. And online dating intensifies that confusion.

Take sex first. Kaufmann argues that in the new world of speed dating, online dating and social networking, the overwhelming idea is to have short, sharp engagements that involve minimal commitment and maximal pleasure. In this, he follows the Leeds-based sociologist Zygmunt Bauman, who proposed the metaphor of "liquid love" to characterise how we form connections in the digital age. It's easier to break with a Facebook friend than a real friend; the work of a split second to delete a mobile-phone contact.

In his 2003 book Liquid Love, Bauman wrote that we "liquid moderns" cannot commit to relationships and have few kinship ties. We incessantly have to use our skills, wits and dedication to create provisional bonds that are loose enough to stop suffocation, but tight enough to give a needed sense of security now that the traditional sources of solace (family, career, loving relationships) are less reliable than ever. And online dating offers just such chances for us to have fast and furious sexual relationships in which commitment is a no-no and yet quantity and quality can be positively rather than inversely related.

After a while, Kaufmann has found, those who use online dating sites become disillusioned. "The game can be fun for a while. But all-pervasive cynicism and utilitarianism eventually sicken anyone who has any sense of human decency. When the players become too cold and detached, nothing good can come of it." Everywhere on dating sites, Kaufmann finds people upset by the unsatisfactorily chilly sex dates that they have brokered. He also comes across online addicts who can't move from digital flirting to real dates and others shocked that websites, which they had sought out as refuges from the judgmental cattle-market of real-life interactions, are just as cruel and unforgiving – perhaps more so.

Online dating has also become a terrain for a new – and often upsetting – gender struggle. "Women are demanding their turn at exercising the right to pleasure," says Kaufmann. Men have exercised that right for millennia. But women's exercise of that right, Kaufmann argues, gets exploited by the worst kind of men. "That's because the women who want an evening of sex don't want a man who is too gentle and polite. The want a 'real man', a male who asserts himself and even what they call 'bad boys'. So the gentle guys, who believed themselves to have responded to the demands of women, don't understand why they are rejected. But frequently, after this sequence, these women are quickly disappointed. After a period of saturation, they come to think: 'All these bastards!'"

The disappointing experience of online dating, Kaufmann argues, is partly explained because we want conflicting things from it: love and sex, freedom and commitment, guilt-free sex without emotional entanglements and a tender cuddle. Worse, the things we want change as we experience them: we wanted the pleasures of sex but realised that wasn't enough.

Maybe, he suggests, we could remove the conflicts and human love could evolve to a new level. "If casual sex is to be a game, it has to be based on new rules that make at least some allowance for love. Or if 'love' sounds too off-putting, for a little affection, for a little attentiveness to our partners, given they are human beings and not just sex objects."

This is the new philosopher's stone – an alchemical mingling of two opposites, sex and love. "If that could be done, the micro-adventure of online dating could mean something very different: it could be a way of escaping ordinary life, of enjoying an idyll for two that takes us far away from the world in which we usually live."

Kaufman's utopia, then, involves a new concept he calls tentatively LoveSex (which sounds like an old Prince album, but let's not hold that against him). Kaufmann suggests that we have to reverse out of the cul de sac of sex for sex's sake and recombine it with love once more to make our experiences less chilly but also less clouded by romantic illusions. "We have to discover ways of loving on a strictly temporary basis."

Or, more likely, realise that we can never have it all. We are doomed, perhaps, to be unsatisfied creatures, whose desires are fulfilled only momentarily before we go on the hunt for new objects to scratch new itches. Which suggests that online dating sites will be filling us with hopes – and disappointments – for a good while yet.

• Online dating
• Dating
• Relationships
• Internet

Stuart Jeffries
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Diplomatic crisis follows day of continued violence in which at least 50 people were killed in Homs, according to activists

Britain and the US recalled their ambassadors to Damascus on Monday in protest at what the British foreign secretary, William Hague, called the "doomed" and "murderous" regime's violent behaviour towards its civilian population.

The diplomatic crisis followed a morning in which at least 50 people were killed in attacks on the Syrian city of Homs, according to activists, including the bombardment of a field hospital in which 19 people were killed.

Speaking in the House of Commons, Hague said of Assad's government: "There is no way it can recover its credibility internationally or with its own people."

Hague recalled Britain's ambassador in Damascus, Simon Collis, to London for "consultations" on what he termed an "utterly unacceptable situation which demands a united international response".

The foreign secretary also signalled the west would now scramble to explore alternative, non-UN routes in an attempt to halt the killing in Syria and prepare for a post-Bashar al-Assad future. As well as continuing support for the Arab League, Hague said the UK would intensify its contact with the Syrian opposition, and would back a new Arab-led group, Friends of Syria. "Britain will be a highly active member in setting up such a group with the broadest international support," he said.

He described Russia's and China's vetoes of the United Nations security council resolution censuring Syria as a grave error of judgment and a betrayal that implicitly "left the door open" to further human rights abuses.

Earlier in the day, an unrepentant Russia accused the international community of "hysteria" following global condemnation of Moscow and Beijing's decision to veto the UN resolution on Syria.

Russia's foreign minister, Sergei Lavrov, dismissed the reaction from "some western voices" as "verging on the hysterical" and called it an "indecent" attempt to pin blame for the out-of-control violence in Syria "on one side only".

The US, Britain, France and Germany all expressed disgust at Moscow's action.

The US closed its embassy in Damascus and evacuated its ambassador and other diplomats amid security concerns. The French president, Nicholas Sarkozy, described the rejection of the Arab-backed security council resolution as a scandal, with the German chancellor, Angela Merkel, saying she was appalled.

Hague's remarks came amid another day of bloodshed and mayhem in Homs, the opposition-controlled town relentlessly targeted by Damascus since Friday. At least 50 people were killed on Mondaywhen shells slammed into a makeshift clinic and residential suburb, in the third day of indiscriminate bombardment by the Syrian army, activists said. Another 10 people were reported killed elsewhere, they added.

The Guardian was unable to independently verify the casualty figures.

The government denies shelling Homs. But activists say as many as 200 people were killed on Saturday, the highest death toll since the uprising in Syria began last March. Arab satellite television stations broadcast live footage from the town, showing smoke rising from some buildings and explosions.

In an interview with NBC, Barack Obama said that despite the failure of UN diplomacy there was no prospect of western military intervention in Syria. But he said he still believed it was possible to reach a negotiated solution to the conflict. He added: "The Assad regime is feeling the noose tightening around them. This is not going to be a matter of if, it's going to be a matter of when."

Asked why Syria differed from Libya, Obama said there was a lack of unity among the major powers in dealing with Syria. He stressed, however: "We have been relentless in sending a message that it is time for Assad to go, that the kind of violence we've seen exercised against his own people over this weekend and over the past several months is inexcusable."

Lavrov will on Tuesday lead a Russian diplomatic mission to Damascus and hold talks with Assad, Syria's president. Mikhail Fradkov, Russia's foreign intelligence chief, will also attend. There has been speculation Moscow may privately be seeking to persuade Assad to make a "controlled exit", handing over power to trusted senior generals, in a move that would preserve Russia's influence in a post-Assad scenario.

Russia has cast its efforts as an even-handed attempt to get both sides to negotiate, in contrast to the partial diplomacy of the west. Lavrov said he would urge Assad to withdraw his heavy weapons from Syria's towns and cities, a key Arab League demand. But he also said he wanted what he called "extremist groups" – opposition fighters from the Free Syrian Army – to disarm as well.

Analysts said Russia's diplomatic initiative stood little chance of success, with Assad emboldened by the Russian and Chinese votes to crush the rebels militarily, and Russia's credibility with Syrian opposition groups at zero. "My gut feeling is it will go nowhere," David Hartwell, senior Middle East analyst at IHS Jane's said.

He added: "The debate has been sharpened by what happened on Saturday. Moscow's argument that Assad is a credible figure who can lead a reform movement in Syria is increasingly weak. The Russians have got themselves in a situation where they are not treated seriously by anybody, certainly not by the opposition."

Russia appears to have rejected the UN resolution for several reasons. The Kremlin has traditionally enjoyed good relations with Syria and supplies it with billions of dollars worth of military hardware. In return, Damascus gives Russia a strategic foothold in the Middle East, allowing it the use the Syrian port of Tartus as a naval base. Russia is also Syria's third biggest trading partner (after Ukraine and China).

But geopolitics also played a role. The Kremlin is keen to create difficulties for the west, and the US in particular. It is happier siding with a fellow authoritarian regime, especially one in the grip of a popular uprising. Additionally, Moscow feels betrayed after supporting last year a UN no-fly zone in Libya, which, it says, was used as a pretext for western-engineered regime change.

And then there are domestic factors, ahead of next month's presidential "election" in Russia and unprecedented street protests against Vladimir Putin's rule. Putin's is reflexively opposed to what he sees as US hegemony and western meddling in sovreign states. "The Russians think Assad's days are over and they are thinking about how to safeguard their position in the region," Ghassan Ibrahim, a Syrian dissident based in London, told Reuters. "Syria is their only door into the region and it gives them influence. They need to protect it. But do they have enough power to manipulate Assad (to step down)?"

Writing in the Rossiskaya Gazeta, Russia's former prime minister Yevgeny Primakov on Monday suggested the UN security council resolution was part of a western conspiracy. Its ultimate aim, he suggested, was to remove the Assad regime in Syria so as to isolate Iran, which the US believes is seeking to develop nuclear weapons.

"The United States and its NATO allies want to exploit the situation that arose in the spring of 2011 in the Arab world with the aim of getting rid of Arab regimes it dislikes," Primakov - a veteran of previous Russian "peace initiatives", including to Saddam Hussein in 1991 - said.

The inclusion of Fradkov, the head of Russia's SVR foreign intelligence agency, in Russia's mission is intriguing. Leaked WikiLeaks cables describe him as a leading member of Russia's security elite, and a "pragmatic hardliner who shares a world view of Soviet xenophobia and distrust of the west."

The US, meanwhile, said it had closed its embassy in Damascus over what it said were security concerns.The US state department said that the Syrian government was informed that the embassy had been closed and the American ambassador, Robert Ford, and the 17 staff remaining in Damascus had left the country only after all of them had crossed into neighbouring Jordan by road.

US officials say the Syrian security forces are so stretched by the uprising that they are not able to sufficiently protect the embassy. Those concerns were heightened by two car bomb attacks on state security offices in Damascus last month.

• Syria
• Middle East and North Africa
• William Hague
• Bashar al-Assad
• United States
• Barack Obama
• Russia
• Europe

Luke HardingChris McGreal
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Judge tells 21 companies to bar access to material deemed religiously offensive, or face China-style action

Google and Facebook have removed content from some Indian websites after a court warned that India would crack down "like China" if they did not take steps to protect religious sensibilities.

The two are among 21 companies ordered to develop a mechanism to block material considered religiously offensive after private petitioners took them to court over images deemed offensive to Hindus, Muslims and Christians.

Individuals have brought two cases against internet companies in India, fuelling fears about censorship in the world's largest democracy.

"[Our] review team has looked at the content and disabled this content from the local domains of [Google] search, YouTube and Blogger," said a Google spokeswoman, Paroma Roy Chowdhury.

At the heart of the dispute is a law India passed last year making companies responsible for user content posted on their websites, and giving them 36 hours to take down content if there is a complaint.

Last month, the companies said it was impossible for them to block content. Roy Chowdhury declined to comment on what had since been removed, and a Facebook representative said only that the company would release a statement later.

A New Delhi lower court hearing one of the cases, a civil suit brought by an Islamic scholar, told the companies on Monday to put in writing the steps they had taken to block offensive content, and submit reports within 15 days.

"Microsoft has filed an application for rejection of the suit on the grounds that it disclosed no cause of action against Microsoft," a spokesperson for the company said. "The matter is sub judice and no further comments can be given."

That suit was brought by a scholar, Mufti Aijaz Arshad Qasm, who runs a website called fatwaonline.org, which gives answers to moral questions.

Google, Facebook, Yahoo and Microsoft have appealed in the Delhi high court against a separate criminal case successfully brought by Vinay Rai, a journalist.

The high court has yet to rule on their appeal, but the sitting judge warned in January they were responsible for content on their websites and said he could, "like China", block sites if the company failed to put its house in order.

In the Rai case, the court ordered the companies to stand trial for offences relating to the distribution of obscene material to minors, after being shown images it said were offensive to the prophet Muhammad, Jesus and various Hindu gods and goddesses as well as several political leaders.

"If the companies have actually removed some content, they should put in place a mechanism to do it regularly, instead of waiting for a court case every time," Rai said.

Fewer than one in 10 of India's 1.2 billion population have access to the internet, but that still makes the country the third-biggest internet market after China and the US. The number of internet users in India is expected to almost triple to 300 million over the next three years.

Despite the new rules to block offensive content, India's internet access is still largely uncensored, in contrast to the tight controls in place in neighbouring China. But, like many other governments around the world, India has become increasingly nervous about the power of social media.

While civil rights groups have opposed the new laws, politicians say posting offensive images in a socially conservative country with a history of violence between religious groups presents a danger to the public.

• India
• Google
• Religion
• Facebook
• Internet
• Social networking

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Deputy PM targets green investment after backbenchers call for cut in subsidy for onshore wind farms

Nick Clegg has led a fightback against concerted attacks by Conservative MPs on government subsidies to support wind power.

A letter to the prime minister signed by more than 100 Tory backbenchers called for a "dramatic cut" in subsidies for onshore windfarms, and new planning rules to make it easier for local communities to object to them. But the deputy prime minister defended subsidies to help renewable energy compete with fossil fuels, highlighting a growing division in the coalition over energy policy.

"The race is on to lead the world in clean, green energy," Clegg said at his first public event with the new Liberal Democrat climate secretary, Ed Davey. "Last year we saw record-breaking global investment in renewables, outstripping the cash piled into fossil fuels. The new economic powerhouses – China, India, Korea, Brazil – are now serious contenders for that capital. In today's world, the savviest states understand that going for growth means going green. Low-carbon markets are the next frontier in the battle for global pre-eminence. I want the UK to be the number one destination for green investment. We're in this race to win it."

Davey, who took over the climate brief when Chris Huhne resigned on Friday, said: "I've been a lifelong supporter of renewable and wind power and I'm not going to change now. I think that onshore and offshore wind power has a real place in a balanced mix of energy generation so I'm a huge supporter of renewables and I'm going to make sure that they have a real role to play in the future."

"We don't want to repeat the mistakes of the past where we have polluted our planet, where our country has been dependent on fossil fuel imports, where the price is high and variable … we want to make sure we have our own energy production that is clean and green."

The letter's organiser, Conservative MP Chris Heaton-Harris, said he had asked only backbenchers to sign, and not ministers, whips or parliamentary private secretaries. The strength of support – including big names such as the former defence secretary Nicholas Soames and two-time leadership candidate David Davis – will encourage the view that MPs feel they have support from ministers, including the chancellor, George Osborne.

Davey responded with what party insiders called a "strong rebuke" to the signatories, who included two Lib Dem MPs.

"I think the case [for wind subsidies] is pretty compelling," Davey said. "Already we've seen through the subsidies that this government has invested in onshore wind that the price has come down to make onshore wind competitive, so we've got money to invest in all sorts of renewables because of the success of these investments."

Laura Sandys, a Conservative MP who supports wind power, said: "Wind often gets a bad press but actually it costs the average UK household only £10 a year and generates electricity 80% of the time. Onshore, offshore, marine, solar, waste to energy should all form part of our mixed energy economy. As a collective, these technologies have the capability to help guard families across the country against energy price shocks."

Zac Goldsmith, Tory MP and one of the party's foremost environmentalists and supporters of renewable energy, said he would write to Davey to urge an analysis of wind power to address claims it is too expensive and unreliable. He said: "The government has to make a clear and robust case or it's going to lose the argument."

Davey was also confronted with a critical article in Monday's Times by the economist Dieter Helm, who claimed that the policy of reducing demand to offset the extra costs of renewable energy such as wind power was "hype", and was not helping cut climate change emissions from fossil fuels because industries were simply moving to countries with lower prices.

Another contentious area within the coalition is nuclear power, which is widely supported by Tories but has traditionally been opposed by many Lib Dems. Davey said there would be "no change" on nuclear policy from the coalition agreement, which made special arrangements that the government would produce new planning guidelines to allow existing nuclear reactors to be replaced, and that Lib Dem MPs could oppose the move and abstain in any vote on the issue in parliament.

"There have been understandable concerns given the expensive mistakes made in the past which the taxpayer is still paying for," Davey said. "But coalition agreement is crystal clear: new nuclear can go ahead so long as it's without subsidy. Developers will be required to put money aside from day one to pay for the eventual decommissioning and waste management."

Clegg's strong words were welcomed by environmental and energy campaigners, who have warned government that signs of political wavering on support for renewable energy are making investors nervous of spending money in the UK.

long-term policy signals and ministerial support were crucial for boosting private investment in renewable energy and the green economy.

David Nussbaum of WWF-UK said: "Investor confidence is vital to build a sustainable and resilient economy, so it's essential that senior members of the government give consistent vocal support to renewables, green jobs and the low-carbon economy. I've heard from renewable energy investors that negative comments from senior politicians on going green impact directly on their ability to raise funds for investment in the UK."

One of the MPs who signed the letter was Simon Reevell, the Conservative MP for Dewsbury, in Yorkshire, where the engineering company David Brown last week announced a big contract with Samsung to boost a new research and innovation centre it is building for wind turbine gears for offshore windfarms.

Reevell said he was opposed to onshore wind turbines, which he said were an eyesore for many local communities and caused a health and safety threat.

In December, Siemens announced it was developing a wind turbine manufacturing plant in Hull, and in January the Port of Sheerness submitted a planning application for a new turbine manufacturing facility proposed by Vestas.

• Green politics
• Nick Clegg
• Ed Davey
• Wind power
• Renewable energy
• Energy
• Conservatives
• Liberal Democrats

Juliette JowitFiona Harvey
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• Met team probing police bribery expanded after Sun arrests
• "Relatively senior" NoW staff arrested by Operation Elveden
• NoW showbiz ed: subjects not pre-notified to protect exclusives
• S Mirror writer 'didn't tell film-maker to obtain medical records'
• IPCC: no evidence that police disclosed Milly Dowler's number
• Daily Mail editor defends Jan Moir over homophobia claims
• Claims Hugh Grant has 'hijacked' inquiry to wound the Mail
• Says Grant has spent his whole life invading his own privacy
• Inquiry has given 'one-sided view' of the Mail and the press

5.56pm: The inquiry has now finished for the day.

5.55pm: Dacre says that the way the inquiry is being conducted and televised means that "the British public are receiving a very bleak picture ... of an industry that employs thousands of people".

5.51pm: Lord Justice Leveson says that it is unacceptable for Dacre to be questioned on issues on which he has not been pre-notified, but accepts that the issue of Grant and the Mail's "mendacious smears" statement has become "totemic". He adds that it is fair to everybody that it is "resolved rather more carefully" than at present.

Leveson does not rule out that Dacre might be recalled "shortly" if the matters are not resolved.

5.49pm: The Hacked Off campaign has issued the following response to Paul Dacre's comments:

The Hacked Off campaign and the Media Standards Trust categorically refute Paul Dacre's baseless accusations that we have "attempted to hijack" the Leveson Inquiry by somehow putting pressure on Hugh Grant, a supporter of the Hacked Off campaign, to "wound" Associated Newspapers at the time Mr Grant gave oral evidence to the inquiry.

5.47pm: Sherborne asks how journalists for the Daily Mail obtained Tinglan Hong's mobile phone number.

He suggests that a Daily Mail journalist did not identify himself as a member of the press to a letting agent who gave the journalist certain details about Hong.

Jonathan Caplan QC intervenes again to say that Dacre and Associated Newspapers have had no notice of these questions.

5.44pm: Sherborne suggests that attacks by the Daily Mail's columnists on actors are ways for the title to generate more stories.

Dacre says he does not understand what Sherborne means.

Sherborne reads a column by Amanda Platell on Hugh Grant titled "Hypocrisy and the tawdry self-love of Mr Grant".

Once a much-loved actor, the truth is that Grant has become a lonely, bitter man consumed with hatred of the media who helped make him a star...

One can only imagine how 'scarred' his abandoned daughter is going to feel. It remains to be seen if the self-obsessed Mr Grant will be able to give any long-term commitment (apart from a financial one, by dipping into his £40million Hollywood fortune)?

Sherbourne describes it as "very nasty".

5.43pm: Sherborne says that Dacre's statement is "just another shooting from the hip attack" on Hugh Grant.

Dacre categorically denies that.

5.36pm: Sherborne asks Dacre about his latest "curious" supplemental witness statement.

The statement is not yet public but Sherborne describes it as making further observations about Grant.

Sherborne says Dacre wrote Grant was "happily being photographed in public places". He points out the contrast with a Daily Mail article from 4 May 2007 that said "Grant, as usual, was annoyed to be photographed in the street" and "Despite the fact that they've played such a big part in making him both famous and wealthy, he detests the media, believing he ought to be above being bothered by such vile, ordinary people."

Dacre says he is bemused at being asked questions without notice about articles published five years ago.

"The point I'm trying to make that this is a man who has assiduously … courted the press," he says.

5.33pm: Lord Justice Leveson says that this particular dispute has achieved a significance "that maybe rather large than it merits" and that Dacre's statement details extensively his newspaper's relationship with Hugh Grant.

Leveson allows Sherborne to put a limited set of questions to Dacre.

5.30pm: David Sherborne, representing the victims in the inquiry, rises to say that he needs to ask questions of Dacre.

Sherborne says his concerns stem from the Associated Newspapers "mendacious smears" statement. He says he is in a "very unsatisfactory" position and that questions could take the inquiry until after 6pm.

Jonathan Caplan QC, counsel for Associated Newspapers, argues that Sherborne should not be allowed to put questions to Dacre.

5.28pm: "You have painted a very bleak picture of the Daily Mail," Dacre says, adding that the examples raised by Jay are minimal and that Daily Mail readers enjoy and support the paper.

"You presented a somewhat one-sided picture of the Mail."

5.27pm: Dacre is asked whether he is as proud of Mail Online as he is of the Daily Mail. Dacre says he is, but notes that it is young and is still evolving.

"I am very proud of Mail Online, which last week became the world's most popular newspaper website," he says. He adds that it is an achievement by British journalism that should be celebrated.

5.25pm: Jay asks whether Dacre had a better relationship with Gordon Brown than Tony Blair. "You could say that," he says.

He points out that he got to know Brown when the prime minister asked him to chair a committee reviewing the 30-year rule on government secrets.

5.20pm: Jay raises a section in Dacre's 2008 Society of Editors speech which said that the editor had a meeting with Gordon Brown and raised concerns over an amendment to section 55 of the Data Protection Act that could have led to the jailing of journalists. Dacre said:

About 16 months ago, I, Les Hinton of News International and Murdoch MacLennan of the Telegraph, had dinner with Gordon Brown and raised these concerns. We also raised a truly frightening amendment to the Data Protection Act, winding its way through parliament, under which journalists faced being jailed for two years for illicitly obtaining personal information such as ex-directory telephone numbers or an individual's gas bills or medical records. This legislation would have made Britain the only country in the free world to jail journalists and could have had a considerable chilling effect on good journalism. The prime minister - I don't think it is breaking confidences to reveal - was hugely sympathetic to the industry's case. Whatever our individual newspapers' views are of the prime minister - and the Mail is pretty tough on him - we should, as an industry, acknowledge that, to date, he has been a great friend of press freedom.

Dacre says that Brown was "sympathetic" to concerns put by Dacre, Murdoch MacLennan and Les Hinton.

"In the public interest they still can," Dacre says, referring to breaches of the Data Protection Act.

"We felt this would put journalists in a very difficult position," he says of the potential for custodial sentences.

Dacre says it "preposterous" to suggest that the amendment suggested by the newspaper representatives was self-serving.

5.18pm: Dacre says he has turned down the editorship of the Times and the Daily Telegraph because he felt he would not be guaranteed editorial independence.

He adds that Rupert Murdoch has been a great proprietor but "I don't think there's any doubt he had very strong views which he communicated to his editors".

5.16pm: Matt Kelly, the Trinity Mirror executive, has just tweeted:

Paul Dacre hasn't been spoken to with such brusqueness since the headmaster took him to task for scrumping those apples in 1867.

5.14pm: Daily Telegraph chief reporter Gordon Rayner has just tweeted:

Jay versus Dacre starting to head towards Nadal v Djokovic territory length-wise #leveson

5.13pm: Lord Justice Leveson notes that Dacre has been giving evidence for three hours, saying that Dacre probably wants to finish his evidence today rather than come back another day.

"That's probably the understatement of the year," says Dacre.

The inquiry is now taking a short break.

5.11pm: Dacre explains the circumstances of his meeting with Jack Straw, Murdoch MacLennan and Rebekah Brooks to warn against curbs to press freedom, including that journalists should not be jailed for breaches under the Data Protection Act.

Jay suggests that Dacre and Straw were close – the Daily Mail editor went to university with the former home secretary – and he was attempting to influence policy.

Dacre says this is an insult to Straw.

5.06pm: Jay points out that Morrissey used a conditional fee arrangement (or "no win, no fee") deal to fight the case against the Mail.

Dacre says CFAs are not a bad thing in themselves, but they have been hijacked by "predatory" lawyers. He adds that fees can be £500,000 for cases that secure £5,000 damages.

4.58pm: Jay points out that the Daily Mail settled with Morrissey over the case.

Dacre says the paper's sources were "not prepared to go to court on it".

Jay says that the paper took a month to reply to Morrissey's offer to settle if the paper apologised, and when it did, it said it would make an apology on page 2.

Morrissey complained the apology was "not given sufficient prominence" compared with the original story. He pressed on with the case, won "substantial" damages and applied for permission to make a statement in open court.

4.57pm: Jay asks about a submission from the Men Behaving Badly actor Neil Morrissey.

Morrissey complained about a Daily Mail article that falsely claimed he had been banned from a bar in France because of binge drinking.

The story, headlined "Homme behaving badly: TV star banned from bar near his idyllic French retreat after locals object to 'le binge drinking'", was published in March 2010.

Dacre says that his journalists spent several days checking the story and suggests that the thrust of the story – the binge drinking claim – was not disproved.

He says that the story was in the public interest because Morrissey is a famous actor and "a role model for young people".

4.52pm: Dacre says that Jay makes a "caricature" of the Daily Mail when he says the paper publishes "loads" of stories purporting to show a link between cancer and other events.

The Daily Mail news desk will reject two or three stories of this kind a day because they do not trust the provenance, Dacre says.

He tries to play the story down, saying that the article in question was only small downpage one and the paper gets hundreds, thousands of stories coming in.

Dacre says the criticism is based on a misunderstanding of how journalism works – a phrase he has repeated several times.

He goes on to say his paper has done huge range of good work on medical and science stories.

4.49pm: Jay asks whether it is the job of some journalists to put a "sensationalist" spin on scientific research. Dacre denies this.

Jay says he has tracked down the original piece of research from Israel and it relatively "uninteresting, save for scientists". It says nothing about an increase in cancer as described in the article, Jay says.

Dacre says that that link between night-time trips to the toilet was based on agency copy and a quote from a researcher.

He adds:

I categorically dispute that we adopt an irresponsible stance on medical stories.

4.44pm: Dacre is asked about a Daily Mail article headed "Cancer danger of that night-time trip to the toilet". Its introduction began: Intro: "Simply turning on a light at night for a few seconds to go to the toilet can cause changes that might lead to cancer, scientists claim."

Roy Greenslade pointed out in his blog that:

It was, of course, bunkum. The Tabloid Watch blog links to straightforward and crushing denials by the said scientists, Professor Charalambos Kyriacou from Leicester University's department of genetics and Dr Rachel Ben-Shlomo from the University of Haifa.

Their research, on mice by the way, was all about the likely effects of the prolonged exposure of nightshift workers to artificial light. There is nothing in their study about trips to the toilet.

As Kyriacou told AOL Health: "The 'switching on of lights causes cancer when you go to the bathroom at night' is an eye-catching fabrication of the press."

For a run-down of other things that the Mail has alleged are causes of cancer see this Facebook list. It includes sausages, tea, potatoes, hugging (I kid you not) and there are 135 more examples too.

4.42pm: Hugh Grant has "spent his life invading his own privacy", says Dacre.

He denies it is intrusive to send photographers and journalists to Grant's home on the news of his child's birth.

Sending photographers to someone who has had a baby to ask for a photo is "as old as time itself", he adds. "It worries me that you can't understand this."

4.39pm: Dacre states unequivocally that he knows of no instances of phone hacking at the Associated Newspapers title.

He repeats that the statement was a "perfectly sensible" way to defend "my company, my newspapers".

4.36pm: Jay asks Dacre about evidence given by Hugh Grant and Associated Newspapers' statement that the star had made "mendacious smears driven by his hatred of the media".

Dacre says he was off work that day and heard a BBC headline that implied Associated Newspapers had been "dragged into the phone-hacking scandal" by Grant's evidence.

Dacre agreed with the Mail on Sunday editor to describe it as a "mendacious smear".

"I had to instantly rebut the fact that your inquiry was being told that we … were hacking into phones," he says. "The damage was being done. I'm glad to say once we got that out we had much more balanced reporting from the BBC and other media."

Dacre denies he shot from the hip too swiftly with the statement. He accuses Grant and the Hacked Off campaign of "hijacking this inquiry in a highly calculated attempt to wound my company".

4.30pm: Jay says it has been suggested that the reason for the Mail's siding with the Lawrence family was because Lawrence's father had done some plastering work for him previously.

"It is an unfair suggestion," Dacre says, before listing a series of campaigns that the Mail has mounted on the Omagh families, plastic bags and Gary McKinnon. "I really do find that insulting," he adds.

4.26pm: Dacre says that the McCanns complaining to the PCC would have "nipped things in the bud" earlier.

"The Mail's reporting of the McCan story was much more responsible that most papers. I can't say any more than that," he adds.

Newspapers felt they had the "green light" to write what they liked about the McCanns after the couple employed a public relations adviser, Dacre says.

The McCann story was one of the few examples of a story that boosted sales, says Dacre. He says, with hindsight, he is glad the Mail didn't splash on it too much.

4.25pm: Jay asks Dacre about the Daily Mail's coverage of the disappearance of Madeleine McCann.

Dacre is asked if the Daily Mail refused to publish an apology because supportive articles outnumbered the harmful ones. Dacre says he does not know.

Jonathan Caplan QC, counsel for Associated Newspapers, intervenes to say that the legal settlement was agreed between the McCanns and the publisher.

4.22pm: Dacre is asked about the Daily Mail's coverage of the arrest of Joanne Yeates's landlord Christopher Jefferies.

The Mail paid damages to Jefferies for libel, rather than contempt of court like the Sun and Daily Mirror.

The attorney general has been "less and less clear" over the years on what constitutes contempt of court, says Dacre. He adds: "Standards did slip in this area, we accept that."

"I apologise to Mr Jefferies," he says, claiming that the Daily Mail was one of the least worst offenders. "We have learned from the experience," he adds.

He welcomes firm guidance from Dominic Grieve, the attorney general, on the matter.

The offending headline was cleared by lawyers, Dacre says. "The backbench rewrote the headline after I left but I stand by it – I'm the editor."

4.16pm: Jay reads out a passage from the article:

The sugar coating on this fatality is so saccharine-thick that it obscures whatever bitter truth lies beneath. Healthy and fit 33-year-old men do not just climb into their pyjamas and go to sleep on the sofa, never to wake up again.

Whatever the cause of death is, it is not, by any yardstick, a natural one.

Dacre responds: "I've already said I think the piece could have benefited from a little judicious subbing."

He adds that usually he leaves the office at 10pm, but on that night he was at the opera with his wife.

4.14pm: Dacre says perhaps the timing of the piece was "regrettable" and it could have "benefited from a little judicious subediting". He adds that he would "die in a ditch" defending a columnists' right to expression. "There isn't a homophobic bone in Jan Moir's body," he says.

Dacre compares the Jan Moir article on page 37 of the Daily Mail to coverage in other newspapers, holding up front pages of the Sun and other titles.

He notes that most of the 22,000 complaints to the PCC about the column were the result of "tweetering" from a famous celebrity (Stephen Fry). "Most of those people conceded they hadn't read the piece," he adds.

4.10pm: Dacre is asked about Jan Moir's column in the Daily Mail about the death of singer Stephen Gately, which was titled "A strange, lonely and troubling death" in print. Online, it was originally headed "Why there was nothing 'natural' about Stephen Gately's death", which was later amended to the print edition headline.

Moir was accused of homophobia over the piece and there were 22,000 complaints to the PCC.

4.08pm: Leveson points out the "difference in view" between Baroness Hollins's complaints and the Mail editor's belief that the articles were in the public view.

If the feature distressed Hollins "then I hear that," Dacre says.

"I can't see how it could have been more sensitively handled," he adds.

4.04pm: Dacre is asked about the evidence by Baroness Hollins on a 2005 Daily Mail article that linked an attack on her son to an entirely separate attack on her daughter. It was titled "Abigail, the brother who dotes on her and the riddle of another random, brutal attack".

"This shows why I don't believe the inquiry understands how popular newspapers work," Dacre says, adding that the feature was handled with "massive sensitivity".

Dacre says it was in the public interest to link the two attacks because both attackers were allegedly on drugs. He says in any case Hollins's son was named in open court.

"Most members of the British public would think it an extraordinary coincidence [that both siblings were attacked]," he adds.

4.03pm: Dacre says editors might have "dropped their guard" on the What Price Privacy Now? report because almost all national newspapers were potentially implicated.

He adds: "I moved decisively and ruthlessly to stamp it out. Other newspapers didn't, and we did."

4.00pm: Jay says it could be the case that illegally-obtained information is still in Associated Newspapers' offices.

Dacre says that the information would likely only be in reporters' notebooks and not on the publisher's computer systems.

3.54pm: Dacre resumes his evidence and reasserts that the What Price Privacy Now? report examined detailed events that happened 10 years ago.

"I would accept there is a prima facie case that Whittamore could have been acting illegally," he says, adding that he does not believe Daily Mail journalists acted wrongly.

3.50pm: Caplan told the inquiry in November that private investigator Steve Whittamore was used to help speed up journalistic investigations and to help verify the accuracy of stories pre-publication, not to break the law. He said:

His assistance was required as far as Associated journalists were concerned to help trace people quickly, usually to verify facts or to comment on stories that were written or in progress prior to publication.

It should also be stressed that Mr Whittamore did not work simply for newspapers, he was hired by organisations such as banks, local authorities and firms of solicitors who were similarly seeking to locate people.

While Mr Whittamore was prosecuted no journalist has ever been charged because there simply is no evidence they ever asked Mr Whittamore to do anything illegal, or they knew he was, or might, be illegally accessing databases.

Another key difference between phone hacking and the data provision provided by Mr Whittamore was that journalists using him were not engaged in fishing expeditions.

3.38pm: The inquiry is now taking a short break while Dacre has a discussion with Jonathan Caplan, counsel for Associated Newspapers.

3.37pm: Dacre says that private investigators were used because it was quicker than journalists conducting the checks themselves.

"Time is everything in journalism," says Dacre.

Jay suggests that suspicions should have been aroused by the expense of Whittamore's undertakings and how quickly they were completed.

"Some of these [Whittamore] inquiries could not be justified by the type of explanation you have given," says Lord Justice Leveson.

He says he is not attempting to label the Daily Mail, but simply to get the overall picture and "move on from what is a long time ago".

3.36pm: Dacre says that his journalists believed they were acting within the law, using Whittamore to obtain telephone numbers and addresses to check news stories.

Jay asks how Dacre knows this. "From my managing editors," says the editor replies.

3.33pm: Operation Motorman "barely registered on the consciousness," Dacre says.

"All newspapers were still using this agency … I'm not sure an investigation at that stage was warranted," he adds, when asked by Jay why Associated Newspapers did not conduct an internal investigation into whether its use of inquiry agents was legal.

Dacre says the Mail wrote to Whittamore's inquiry agency, which gave the paper assurances about his methods.

3.31pm: From 2005, the Daily Mail sent a series of emails and letters to staff warning them about restrictions under the Data Protection Act, Dacre tells the inquiry.

Dacre says he does not know exactly when the Daily Mail stopped using Whittamore.

"In 2007 we brought the shutters down and banned – banned – the use of inquiry agents," he says.

Dacre claims that the BBC spent a similar amount on search agents as the Daily Mail.

3.28pm: Dacre confirms he was aware that the Daily Mail was using search agents before 2006 but not to the extent as revealed by What Price Privacy Now?. "Not the numbers," he says.

He says he was aware that the paper used private investigator Steve Whittamore "sometime about 2004, 2005-ish".

3.26pm: Dacre is asked about Operation Motorman.

This was the information commissioner's 2003 investigation by the Information Commissioner's Office into allegations of offences under the Data Protection Act by newspapers employing private investigators.

What Price Privacy Now? was the key ICO report into the unlawful trading of confidential information published in 2006.

The Daily Mail was identified as the paper with the the most transactions followed by the Sunday People, the Daily Mirror and the News of the World.

The nature of the transactions was not identified in this report and could have included general research and legal searches such as electoral roll checks or searches of births, deaths and marriages records.

3.21pm: Chris Bryant MP has just tweeted:

Dacre's idea of withdrawing press card for gross malfeasance is identical to @IvanLewis_MP plan, which the Daily Mail savagely attacked

3.19pm: Dacre says he is "utterly unaware" of any policy to "bury" complaints on Mail Online, when asked by Jay.

"The beauty of the Mail Online is that it doesn't have to carry many corrections, because things are quickly corrected or removed," says Dacre.

Dacre stresses that apologies relating to stories in the print edition are run in the paper.

He expresses displeasure at Jay's suggestion that apologies for print stories are run online. "Anybody can make such as accusation and smear a paper", he adds.

3.18pm: Dacre warns against the new regulator having the power to insist on where newspapers print apologies or corrections.

He says that this would undermine the editor and would be more easily accommodated by quality newspapers than tabloid titles because they have more stories on the front page.

3.15pm: Dacre is asked about newspaper corrections.

The Daily Mail introduced a page 2 corrections column to coincide with the introduction of the Leveson inquiry.

He says the idea of a consistent place to print corrections "has virtue".

3.14pm: Dacre says that it would be beneficial if the press could move to a "transitional arrangement" sooner rather than later.

Jay: "Or to avoid the sword of Damocles?"

Dacre: "I wouldn't say that, Mr Jay."

3.12pm: Dacre suggests that a new committee should be set up to define the meaning of the public interest. Privacy is impossible to define, but the public interest is more difficult, he adds. He says the definition in the current PCC code is "too loose".

Senior appointments to the new regulator should be made by an independent panel including lay members, he says.

3.11pm: Dacre is asked about paparazzi photographers.

He says he has been "distressed" like others at evidence given to the inquiry on harassment by paparazzi photographers.

There is a "vast vast market" for paparazzi pictures abroad, he says, adding that this is compounded by "everyone becoming a citizen photographer".

He adds that the PCC editors' code of practice could deal with freelance photographers. Picture agencies should sign up to the new regulator and those who do not should not be used by newspapers or other publications, Dacre says. He adds that better use should be made of harassment law.

3.08pm: Guardian editor Alan Rusbridger has just tweeted:

Dacre proposes new press card system for j'sts working for accredited print orgs.Hasn't thought thru digital j'ism #Leveson

3.06pm: Dacre says this is different from the state licensing journalists "because it's the industry doing it".

It would come into effect in government press briefings and other events in public office.

"It is in the interests of both sides, news providers and news obtainers, why should they not have the right to believe they are dealing with accredited journalists?" he says.

Non-accredited journalists could be deprived access from the press facilities at sporting events and other conferences, Dacre says.

3.04pm: Guardian head of media and technology Dan Sabbagh has just tweeted:

Breaking: Paul Dacre proposes a licensing system for journalists in effect - blows the debate wide open.

3.03pm: Dacre suggests a new press card system for signed-up members of the new regulator.

He recommends that press events only be open to those with this new card.

"It is my considered view that no publication could survive if its reporters were banned" from such events. The "beauty" of this system is that it would be the newspaper industry policing journalists, not the state.

"I'm suggesting it should come under one umbrella, whether it's the standards arm of the new regulator, whether it's the Newspaper Society."

He adds: "I'm being very honest – the existing press cards don't mean much".

3.01pm: Dacre says that Lord Hunt's idea for contracts to lock newspapers into the new regulatory body is "attractive".

He welcomes the arbitration arm but has concerns about its financial cost.

He adds that he is worried about how the new body could "lock in the Desmonds".

"By and large Mr Desmond does not produce the kind of journalism – mostly celebrity bland journalism – that would end up in this court or arbitration model," he says.

He describes Richard Desmond's titles, naming OK! magazine, as producing "very bland, slightly sycophantic" journalism.

2.59pm: The Financial Times media correspondent, Ben Fenton, has just tweeted:

Jay:What are you prepared to sign up to? D: I don't understand the drift of this conversation.[Paraphrase:It was my idea, of course I agree]

2.55pm: Dacre is asked about proposals for a new PCC.

Jay asks if he is fully signed up to Lord Hunt's proposals, heard last week. "Of course," says Dacre.

He says he didn't suggest the contractual aspect of Hunt's plan, but that it "sounds very interesting".

"I may be missing something but I don't understand where this conversation is running," he says, when asked whether he would sign up to the ideas in principle or in reality.

Dacre points out that he has already put forward his proposals – at a Leveson inquiry seminar session last year.

"I don't want to be immodest … but it was me that set a lot of these hares running," he says.

2.53pm: Dacre accepts that the PCC "couldn't deal with press standards".

He says it would be a good idea to set up a new body alongside the PCC to deal with standards and impose sanctions, run by an ombudsman.

He adds that the PCC should be allowed to continue its complaints-handling role.

"I think a new system can improve things," Dacre says, when asked to answer yes or no whether the state of the PCC is such that it needs a new regulatory system.

2.51pm: Dacre says that Sunday newspapers have lost a "latitude" to investigate and break "sensational" stories.

"I wouldn't have the News of the World in my house, but it did break great stories ... and had a lot of serious political coverage," he says, adding that it's a "pity" it is gone.

2.49pm: Dacre is asked about the makeup of the PCC.

He says that critics of self-regulation "promote" the view that the PCC is not independent, adding that this is disproved because of the majority of lay members on the committee.

The newspaper industry needs to think whether the PCC should be able to impose sanctions in "exceptional areas of malfeasance".

He suggests that tougher sanctions would be imposed for payments to public officials and phone hacking.

2.43pm: Dacre says that press behaviour is "much improved", but that there are still areas of improvement.

2.41pm: Dacre reads a quotes from Mr Justice Tugendhat and professor Tim Luckhurst on privacy and freedom of expression. Luckhurst wrote:

The notion that moral failures such as adultery are entirely private and do not matter to the wider world is an affront to the very idea of community.

A taste for titillation must explain some people's interest in Ryan Giggs's alleged extramarital activities. But for many others, cheap thrills were the last thing on their mind when they rebelled against privacy injunctions and remote, arrogant judges.

This admirable majority resent public figures who think they can turn publicity on and off like a tap.

We reserve the right to scrutinise and censure the conduct of people who have grown rich on our wages or claim authority over our lives. And, in asserting democratic accountability, we are proclaiming our loyalty to a virtuous principle.

In the 18th and 19th Centuries, British philosophers developed a concept called the 'sanction of public opinion'.

They concluded that popular morality should not ban infidelity or imprison men for betraying their wives, but it could create an incentive to behave responsibly. People tempted to stray might be persuaded to think again by the certainty that their friends and neighbours would think less of them.

2.40pm: Asked about privacy, Dacre says that some celebrities "intrude into their own lives" by selling details about their private life.

He complains that Jay's questions are too broad and asks him to focus on specifics.

Dacre is asked about his recent Society of Editors speech. "I was clearly trying to express a growing concern … that certain areas of jurisprudence were going in an anti-newspaper, anti-democratic direction," he says.

In the speech, Dacre attacked Mr Justice Eady's judgments in several cases as "amoral and arrogant". He clarifies that he was attacking the judgments, "not the man".

2.37pm: Dacre says "commercial success follows" if editors are left to edit their newspapers.

2.35pm: Dacre says it a "canard" that he imposes his personal will on the Daily Mail.

He says he does not impose a "world view" on the newspaper and its standpoint is "vigorously debated" by the paper's top writers.

Dacre says its top writers would leave if he attempted to tell them what to write.

"Do you think I tell Max Hastings, Janet Street Porter, Craig Brown and others what to write?" he adds,

Dacre says some of the views expressed on the paper's Irish edition "make my hair go white" but he does not attempt to interfere.

He adds that the paper aims to reflect readers' "anxieties" rather than their prejudices.

2.32pm: Dacre is asked what he meant by saying that the inquiry's assessors did not understand how mass-market newspapers operated.

He says the assessors seem to come from a "narrow" background, with little experience of mainstream newspapers.

2.30pm: Dacre is the longest-serving editor on Fleet Street and chairman of the PCC editors' code of conduct committee. He has been editor of the Daily Mail since 1992 and editor-in-chief of Associated Newspapers since 1998.

2.27pm: Paul Dacre, editor-in-chief of the Daily Mail, has taken the stand.

2.22pm: The inquiry has now resumed.

Jemima Khan and Hugh Grant have submitted supplementary witness statements were submitted late on Friday and Saturday. Robert Jay, counsel to the inquiry, says it is "disappointing" that the evidence was submitted so late.

Lord Justice Leveson says he does not want the inquiry diverted into a dispute between witnesses and core participants.

2.20pm: Our colleague Lisa O'Carroll has just tweeted that the video link is down and the inquiry can't proceed without it.

2.18pm: Ben Fenton, the FT's media correspondent, wins the 'boom boom' moment of today's inquiry. He has just tweeted:

[This could be Calcutta Cup tactics -Scotland kept England waiting on Saturday night. Of course, this is more Calcutt Cup tactics. #leveson]

— Ben Fenton (@benfenton) February 6, 2012

2.03pm: Our colleague David Leigh's story on the IPCC investigation into News of the World payments in the Milly Dowler case is now live. He writes:

Two suspicious payments by News of the World journalists during the Milly Dowler case are under police investigation, the police anti-corruption watchdog has revealed.

The Independent Police Complaints Commission [IPCC] said they were supervising the ongoing investigation, which resulted from paperwork handed over by the newspaper, but no evidence had surfaced so far to link the payments to corrupt officers.

The IPCC disclosure came in the course of a report published on Monday, which dismissed claims that a detective constable from Surrey police had sold information to journalists in 2002, including the missing teenager's mobile phone number. The report said the information, which came from a former Surrey police officer calling himself "Andy" , was unsubstantiated "supposition and rumour".

But the report added: "Officers from Operation Elveden, the investigation by the Metropolitan Police Service into allegations of corrupt payments by journalists to police officers, informed Surrey police they had documentation from the News of the World indicating that two payments had been made by journalists in 2002 in connection with Milly Dowler."

You can read the full story here.

1.54pm: Our correspondent at the Royal Courts of Justice, Lisa O'Carroll, has just tweeted that Daily Mail editor Paul Dacre has not yet arrived before his turn in the stand.

#leveson Paul dacre has not yet arrived but air of anticipation in court 73

— lisa o'carroll (@lisaocarroll) February 6, 2012

1.51pm: The investigative journalist, Tom Bower, has been on Sky News ahead of Paul Dacre's evidence to the Leveson inquiry.

Bower described Dacre as "one of the great" newspaper editors and "the last hope to save this ridiculous inquiry from going off into the wilderness".

He is no fan of Lord Justice Leveson. "I think Leveson has failed as an operation to find out what has gone on," Bower said. "Leveson personally doesn't understand the press. I don't think a judge is the right person [to conduct this inquiry] in the first place."

He added: "The problems are minor. There was one terrible error but not worthwhile of this massive apparatus. The News of the World went off in a particular way – that is regrettable – but they had a different way of operating to the Daily Mail."

1.07pm: Here is Sue Akers's witness statment:

12.58pm: Here is a lunchtime summary of today's evidence so far:

• The Scotland Yard team investigating payment to police by journalists has been expanded following arrests at the Sun.

• News of the World journalists arrested under Operation Elveden were "relatively senior", DAC Sue Akers told the inquiry.

• The Former News of the World showbiz editor, Dan Wootton, said "need to protect exclusives" was justification for not pre-notifying subject of stories in some instances.

• A Sunday Mirror journalist, Nick Owens, denied he encouraged undercover film-maker Chris Atkins to disclose celebrities' confidential medical records.

• The Independent Police Complaints Commission has found no evidence to suggest that a Surrey police officer disclosed Milly Dowler's phone number to the News of the World.

12.52pm: The inquiry has now broken for lunch. It will resume at 2pm for evidence from Paul Dacre, editor-in-chief of the Daily Mail.

12.51pm: Owens has completed his evidence.

12.50pm: Owens is asked about the reaction of the Sunday Mirror editor, Tina Weaver, when told about the conversation.

Weaver thought Owens had acted unwisely and made "some clumsy comments", he says.

12.45pm: Here is Chris Atkins's record of his converation with Owens, as it appears in his witness statement:

I then gave him several fabricated operations of real celebrities:

CA: Well - one of Girls Aloud

NO: One of?

CA: One of - boobjob, consultation

NO: Oh really - OK - that's good

CA: Mr Hugh Grant - had a bit of a face tuck - that's happened a while ago

NO: Face tuck?

CA: Yeah

NO: That's OK

CA: Rhys Ifans - tummy

NO: Oh really - Rhys? Tummy tuck

CA: Yeah, again don't know how long that was

NO: He's not going back for more?

CA: I don't know - I don't know

NO: OK

CA: I don 't even know what this is - but Guy Ritchie apparently - chemical peel

CA: This is the one which is literally quite recent is Gemma Arterton... a gastric

NO: That's surprising isn't it?

NO: Girls Aloud is potential... very very good story. Depends who it is. If it's Cheryl then it is massive - with Cheryl you can expect a big pay, that makes it less dodgy for your source. It's almost worth the wait, till she had it done... Have they had it done or it is just a consultation?

CA: No - consultation.

NO: Are we talking about Cheryl

CA: No

NO: Not a problem -

CA: Nicola

NO: Nicola - that is still a good story. That is the best one ... And Gemma - the other three are like maybes.

NO: I think Rhys is funny - cos, you know Rhys Ifans wanting a tummy tuck is a very funny story - but then again - is it justified in the public interest? That's the problem. We could get away with Gemma - that's massive, good story that ... because as you see she does not need one. You have got to ask yourself why? Why is she bothering? That age as well. So that's all great.

CA: What sort of figure, this would never be ... but so I've got a ball park -

NO: Think you are looking to get over three grand minimum - that is a start. How it works is right, page lead in the paper is a grand - but the further it gets to the front of the paper - the more it is. Get a spread - well you won't get a spread out of this as it's one fact. That is the problem - unless you get some kind of... Fern made a spread cos of the issues surrounding her. This one is "Nicola's got a boob job" it is a one fact story ... there's no getting around it ... As a journalist you write that story up, there's almost a point where you put a full stop and you've finished the story. Then you have to write round it.

CA: Just rehash old stuff?

NO: Yeah you have to.

NO: [About Rhys Ifans] having a tummy tuck to get rid of his beer belly isn't it? It's a fucking good story that - but out of all of them you could do Rhys - if you wanted to do one you could probably do Rhys Sunday.

NO: If it's a boob job then that goes without saying - if you say to me that she [Nicola] has had a boob job in May - and we know about it and then we put pictures on her very early on - and we would be the first paper to fucking run that story - do the before and after pictures. Because what you do with boob job stories is "has she or hasn't she had a boob job?" And we know she has, which means I can write it quite strong. With Gemma Arterton it is slightly more tricky cos it's a consultation for a gastric band and obviously it goes without saying you can't see it. Cos then we do have to go to her - with her we might need some documents, we need to know when it happened.

NO: [about Rhys Ifans] Having a tummy tuck to get rid of his beer belly isn't it? It's a fucking good story that - but out of all of them you could do Rhys - if you wanted to do one you could probably do Rhys Sunday, but we're not gonna do that. But looking at it, Rhys you could probably get away with because it's so funny. The other two you have got to wait - Gemma and Nicola you have got to wait -

CA: Yes but which ones would she need to

NO: I don't think we would need anything more on Nicola because it would be there - in plain view for all to see

CA: But what if ... we don't want to be in a situation where they deny it- and they come back to us and say I need something tomorrow, or it's dead, do you know what I mean?

NO: Yes the thing is - with that she'll need - in my opinion is that with an operation like that - it is quite a big operation - they will normally need a couple of weeks off - so it will come when there's a gap in their thing - we'll be able to work it out- no one has seen them for a few weeks - where has she been? I think we will be fine on that - I mean I think we will be all right - and obviously fit looks like she has got bigger tits we can easily say she has had a boob job and we will be all right. Gemma Arterton we'll need if possible some documentation. The thing to say to your friend is "what can you get?" Because the more the better really. If she can't get anything then fine.

CA: She is an administrative nurse, that's the thing, so she probably can

NO: If she can, yeah get a document on everything.

12.44pm: Owens says that by the end of his conversation he had come to the view that he would not act on the information.

The meeting was not mentioned afterwards to the news desk, he says.

12.43pm: The witness statement of Sue Akers has now been published on the Leveson inquiry website.

12.42pm: Owens says that newspapers do often investigate claims and that was his aim in meeting Atkins.

He suggests that he kept open the possibility of exposing Atkins after the undercover film-maker claimed to be able to get his friend drunk to obtain information about celebrities.

"I went away thinking that there was potential to expose what he was doing," he tells the inquiry.

Barr suggests that Owens was "positively encouraging" Atkins to get his friend drunk.

Owens denies he was doing this and "alarm bells began to ring" that Atkins himself may be worth investigating.

12.33pm: Barr claims that Owens told Atkins that he was "keen to keep talking" about potential stories involving celebrities and cosmetic surgery.

Owens says: "I didn't believe it was dynamite information. I was there to find out what the information was."

12.24pm: Barr continues to press Owens on what he meant by certain exchanges in the transcript of the recording. He asks about Atkins's suggestions that he could obtain information about a member of Girls Aloud, Hugh Grant, Rhys Ifans and Guy Ritchie

Barr suggests that Owens had come to conclusions about the value of certain stories to be obtained from Atkins.

Owens denies he had reached final conclusions and says he was going along with Atkins just to "keep his interest".

12.20pm: The Independent Police Complaints Commission has said there is no evidence that a Surrey police officer gave Milly Dowler's telephone number to the News of the World.

In a statement, the IPCC said:

The Independent Police Complaints Commission has concluded that there is no evidence to support allegations that a Surrey police officer subject to an IPCC investigation, gave information to journalists during Operation Ruby, the investigation into the disappearance of Amanda (Milly) Dowler in 2002.

The matter was referred to the IPCC by Surrey police in August 2011 after they received information from three newspaper journalists that they were going to publish the allegations.

IPCC commissioner Mike Franklin said:

"The allegations that a Surrey police officer provided information to journalists during Operation Ruby, and may have been paid for doing so, can only have added to the terrible loss endured by Milly Dowler's family. Surrey police, quite rightly, came under a great deal of scrutiny over this issue - the allegations are serious and required independent examination.

"I hope our finding that there was no substantive or factual evidence to support the allegations will provide some reassurance to the Dowler family on this issue at least.

"It appears from this investigation that unsubstantiated information, perhaps not surprisingly, quickly gained currency in a climate where the relationships between the police and the media are under intense public scrutiny.

"A police officer was criminally interviewed and remained under suspicion for some months, as our investigators sought to establish the facts,. We have provided Surrey police with our report and indicated we see no need for further action.

"The terms of this investigation were specific to these allegations and this officer."

The Dowler family has seen the IPCC report into the specific officer. They are conscious of the fact that other investigations not involving the IPCC are ongoing and have no further comment to make.

12.19pm: Owens denies he was coordinating a strategy to publish stories based on the claimed medical records.

He says that "nothing happened" after the meeting, proving that there was no "strategy".

12.16pm: Barr suggests that the transcript suggests Owens had a "wish list" of what cosmetic surgery pocedures he wanted information on, and that gastric bands were the best story.

Owens denies this.

12.13pm: Barr says it is "self-evident" that Owens told Atkins that the Sunday Mirror would be interested in the stories even if it could not obtain confidential medical records to back up the claims.

Owens again contests this, saying he wanted to establish what hard evidence might be available if asked by his newsdesk.

Barr suggests that the phrase in the transcript "just ask her what she can get hold of" were active encouragement to obtain documents from a source.

Owens denies this.

12.06pm: Owens says that the conversation is "not reflective" of the Sunday Mirror because he was having an informal one-to-one conversation.

Pressed on the exchanges about Fern Britton, Owens tells the inquiry he is being candid and was simply attempting to establish what information Atkins was claiming to be able to obtain.

This would have helped Owens explain to his news desk what evidence might be available, he says.

12.03pm: For Chris Atkins's version of events, you can read his witness statement on the Leveson inquiry website.

11.59am: Owens is asked whether it was "ethically appropriate" to meet Atkins in this context.

Owens says it was because he was just listening what Atkins had to say. "The key is what you do," he adds, pointing out again that no story was published by the Sunday Mirror based on this information.

11.56am: Owens says he made it clear to Atkins that there need to be a strong public interest justification if it was to run a story about Fern Britton having a gastric band operation.

He points out that this was "an informal" meeting and the information discussed "did not lead to any information being published".

11.52am: Owens felt that Atkins had some information that would be interesting to hear, and cannot remember what was going through his mind at the time of the 2009 conversation.

According to the transcript as read by Barr, Owens said "great" when Atkins said that he knew someone who could get private information on celebrities.

"I certainly wasn't delighted to hear that," he says. "I couldn't tell you why I said that word three years ago."

11.48am: Owens is asked about Chris Atkins's Starsuckers film.

Barr reads aloud parts of the transcript of the undercover recording. Owens says that he made clear early in the conversation that they were discussing a "very sensitive" issue, namely medical records of celebrities.

Owens says that as a journalist "we have a duty to engage with people and hear them out" and that is what he was doing.

11.43am: Owens says that the Sunday Mirror has a lawyer in the office at all times, unlike at the Lancashire Evening Post.

Lord Justice Leveson asks about his undercover report into a Bernard Matthews turkey factory.

Owens says the newspaper found it justified to go undercover as an employee to investigate the factory.

11.40am: Leveson asks Owens what "protective measures" are taken before any undercover investigation by Owens.

He says news editors would be involved at all stages. Owens talks about an undercover report into traffic wardens while he was at the Lancashire Evening Post.

Readers of the paper had expressed concerns about wardens and so "probably the only way" to investigate the potential story.

He says that being "economical with the truth" was justified because of the level of concern expressed from readers.

11.37am: Owens says that he deals with stories on a case-by-case basis.

Asked about Chris Atkins, the filmmaker behind the Starsuckers undercover sting, Owens confirms he only told his newsdesk he was going to meet someone – not who he was meeting.

11.32am: Owens says that in March 2009 he was very familiar with the PCC code.

This is the time when Owens was filmed apparently suggesting the Sunday Mirror would pay for celebrities' medical information.

11.31am: David Barr, counsel to the inquiry, is leading the questioning of Owens.

Owens joined the Sunday Mirror in 2006 from the Lancashire Evening Post.

11.29am: The inquiry has resumed and Sunday Mirror reporter Nick Owens has taken the stand.

Owens was covertly filmed for the Starsuckers film suggesting he would pay for private information about celebrities. Owens later apologised for his remarks.

The Sunday Mirror editor, Tina Weaver, defended Owens when she gave evidence to the inquiry last month.

"He realised it wasn't in the public interest at some stage and didn't even report his meeting to the news desk," she said. "I would like to say that this story would never have been published ... Apart from this incident, he's a very good and honest reporter."

11.20am: Wootton has completed his evidence and the inquiry is taking a short break.

11.19am: Lord Justice Leveson asks Wootton about newspapers in his native New Zealand.

Wootton says that there is a self-regulatory body that is not made up of serving editors. Newspapers in New Zealand are compelled to publish findings of the regulator in full if they are found against, he says.

11.15am: Wootton is now working for the Daily Mail, a magazine and a TV programme.

He is asked about Hugh Grant and stories last year about the birth of his daughter.

"I was very concerned and disappointed when I heard one aspect of Hugh Grant's evidence," he says.

He suggests that Grant's publicists in the US have a policy of not speaking to British tabloids and describes this as "frustrating" when a journalist is attempting to give right of reply. "I definitely think there needs to be a two-way street."

11.11am: Wootton says he would not write about Hugh Grant, for example, because "he didn't seem to enjoy being a celebrity".

He says it is "naive" to say you can be a Hollywood celebrity and bemoan the press attention that comes with the role.

"All celebrities have a right to privacy," Wootton says, adding that in particular areas – sexuality, health issues, children – this is sacrosanct.

11.08am: Wootton is asked about the public interest.

He gives the example of one celebrity who was employed by a supermarket brand and had spoken publicly about her family life amid allegations of drug abuse. He suggests this was in the public interest because it showed hypocrisy.

He contrasts this with another celebrity who had not spoken about their private life so the NoW could not mount a public interest defence on grounds of hypocrisy.

"It could go both ways," he tells the inquiry.

11.02am: There were no complaints made to the PCC about Wootton's stories in the final three years of his time at the News of the World, he says.

Wootton was named showbiz reporter of the year at the British Press Awards in 2010. One of the pieces that won him the prize was on the death of Boyzone member, Stephen Gately.

11.00am: Wootton says that he was once bylined on a story that he had not worked on at all.

He points out that his showbiz column, headed with his name, ran 52 weeks a year – and he did not work all year.

"There are certain accepted tabloid conventions," he says.

10.58am: Wootton says that he would sometimes inquire about the source of information from freelance contributors.

He believes he would sometimes take a more cautious approach than other journalists at the NoW.

10.56am: Wootton tells the inquiry that "there is a need to protect exclusives" and on a small number of occasions there would be a "commercial decision" not to pre-notify on a showbiz story because of a fear of leaks.

He says that right of reply would only not be given if the editor was 100% confident of the facts of the article; it was more likely to happen on positive stories.

It was Wootton's policy to give right of reply on 99% of his stories, he says.

10.52am: Wootton says there was "probably" times when his opinion was overruled as to whether the NoW would run a story.

He recalls one occasion when a senior executive at the paper had been told that a celebrity was going to take a certain job.

Wootton says his gut feeling was that the story should be checked, but the executive did not and requested that Wootton also did not check the story.

10.50am: Wootton says the job of showbiz editor is "definitely walking a tightrope" by being fair to celebrities and not becoming a stooge.

"Because the News of the World was coming from a position of weakness, it was felt that that was particularly important," he says.

10.47am: Jay asks whether Wootton felt he was "colluding" with celebrities to put stories with a certain angle out.

Wootton denies this. "I was always conscious not to become a stooge to celebrities," he says. His stories were built on trust that the celebrities would be treated fairly.

"One of my jobs was to make sure celebrities felt confident to give interviews and stories to the News of the World," he says, adding that the paper had to work on rebuilding trust in 2007, following the convictions of Goodman and Mulcaire.

10.45am: Wootton says that there was a fear that "secret squirrel" stories could be leaked. He says these were one-fact stories, such as celebrity A had split from celebrity B. They were kept within a small group of about five people.

"The News of the World was particularly conscious that stories could be leaked, because they had in the past," he says.

Wootton says that none of his stories were obtained by subterfuge and about half came from celebrities themselves.

10.45am: Wootton denies there was a bullying culture at the News of the World.

He adds that individual desks in the newsroom "very much ran as separate entities".

Wootton operated on the features desk and would have "very very minimal" contact with the news desk, he says.

Wootton spoke to the head of news about twice in his four years at the paper, he says.

10.44am: Wootton says that he joined on a day when the News of the World was holding its first regular PCC seminar. He was given a pocket-sized PCC guidebook which he carried "at all times".

He says that every story – including "the most trivial" – would be read by at least four people in the newsroom before publication.

Wootton says he felt the News of the World was in competition with its sister title, the Sun.

10.40am: Wootton says that he was assured following the conviction of News of the World royal correspondent Clive Goodman in early 2007 that that was an "individual incident".

"When I started it was made absolutely clear that that behaviour would not be tolerated in any way by [then editor] Colin Myler," he tells the inquiry.

10.37am: Wootton joined the News of the World in 2007 and was at the paper until its closure in July last year.

There is an interview with Wootton shortly after the paper's closure on the BBC website.

10.34am: Dan Wootton, the former News of the World showbiz editor, has taken the stand.

10.33am: Akers has completed her evidence.

10.33am: Akers is asked about Operation Kalmyk. It is a scoping exercise that arose from Operation Tuleta evidence of at least one person being involved in illegally accessing computers for financial gain.

Operation Kalmyk was the subject of a recent BBC Panorama programme, Akers confirms.

One person has been arrested under Operation Kalmyk and are on bail until March.

Leveson says "my train isn't stopping" in terms of pushing ahead with his inquiry.

10.31am: Akers says that the Met is examining 4 terabytes – a vast amount – of information under Operation Tuleta.

She describes it as a "huge amount, vast" when asked what it would look like if printed out.

10.29am: Jay asks about Operation Tuleta.

Akers says that about 20 police officers are looking into 57 claims of "data intrusion" on behalf of journalists.

Most of these claims relate to computer hacking, medical records and phone hacking.

Some of these claims go back to as long ago as the late 1980s, Akers says. "Some of these are connected to very historic investigations that the Met has undertaken," she adds.

10.27am: Akers is asked about timing of Operation Elveden.

She says she is "less confident in saying we're nearer the end than the beginning" with Elveden, unlike Operation Weeting.

Akers says because News International is giving "voluntary disclosure" to police, the Met is not obtaining evidence via a production order. Under the Police and Criminal Evidence Act, the police are not entitled to seek a warrant where there is co-operation.

10.25am: Akers says that information from News Corp's MSC led to the arrest of a journalist at the Sun in November last year.

The further arrests at the Sun last month came from disclosures from the MSC "as well as our own analysis" of material handed over, Akers confirms.

The police want to question one further journalist who is abroad, she adds.

10.23am: Akers says that the Met police has a "co-operative working relationship" with News Corp's internal investigation unit, the management and standards committee (MSC).

Akers says that "reasonably senior" News of the World journalists have been arrested under Operation Elveden between June and December.

No police officers have been identified as suspects in relation to the News of the World, Akers confirms. The material has come from the newspapers and so the sources are not identified.

10.19am: Akers is asked about Operation Elveden, the investigation into payments to police officers by journalists.

Akers says there is a "very legitimate public interest" in investigating this.

She adds that 40 police officers and staff are currently working on Elveden, but that team will be expanded to 61 officers in light of the investigation into the Sun.

Fourteen people have been arrested so far under Elveden.

10.18am: Jay asks if Akers "is nearer the finishing line than the starting gun". She agrees.

Akers adds that a total of 90 police officers are working on Operation Weeting, including 35 who are "dedicated to the victims, which has been quite time consuming".

10.17am: Akers says that "a number of key witnesses" have come forward but the police want to see more. "That process is ongoing. It will take a few more months," Akers tells the inquiry.

Jay says that 300m emails have been retrieved from News International, including material that the police thought had been lost.

Akers says the search of that material is in a relatively advanced stage. The Met police has found hard archives of some material.

10.15am: The police have contacted 581 of those 829 likely phone hacking victims, Akers says. A further 231 are uncontactable, but are identified in Mulcaire's notes. Seventeen people have not been contacted for "operational reasons".

Two of the 17 people arrested under Operation Weeting have had no further action taken against them and 15 are on bail.

10.13am: The number of people contacted by police or writing in to police asking if they were hacked is 2,900, Akers confirms. Of those, 1,578 actually appeared in Mulcaire's notes.

Akers says there are 829 "likely" victims – those who have detail around their names that make it likely they were hacked or had potential to be hacked.

10.08am: Jay confirms that there are 6,349 potential victims – identifiable names of people in information held under Operation Weeting – of phone hacking. There are 11,000 pages in the seized notes of private investigator Glenn Mulcaire. The number of names with phone numbers alongside is 4,375.

10.05am: Akers is the police chief in charge of the Operation Weeting investigation into phone hacking; the Operation Tuleta investigation into computer hacking to procure information on behalf of newspapers; and Operating Elveden, the police investigation into inappropriate payments to police officers by journalists.

10.02am: Sue Akers, the detective assistant commissioner of the Met police, has taken the stand.

Robert Jay QC, counsel to the inquiry, is leading the questioning.

9.59am: Our correspondent at the Royal Courts of Justice, Lisa O'Carroll, has just tweeted that Sue Akers, the deputy assistant commissioner of the Met police, will be the first witness of the day. Daily Mail editor Paul Dacre is expected to appear this afternoon.

#leveson order for today Akers, Owens, wooton, then dacre in the afternoon

— lisa o'carroll (@lisaocarroll) February 6, 2012

9.41am: Former News of the World showbiz correspondent Dan Wootton has revealed his pre-Leveson preparation: an uplifting dose of the Canadian singer Alanis Morissette.

Big morning ahead so I'm listening to Alanis. Obv.

— Dan Wootton (@danwootton) February 6, 2012

9.40am: Good morning and welcome to the Leveson inquiry live blog.

Paul Dacre, editor-in-chief of the Daily Mail, and Sue Akers, the Metropolitan police deputy assistant commissioner in charge of three major investigations into alleged press illegality, will give evidence to the inquiry today.

Fleet Street's longest-serving newspaper editor is likely to be asked about the Daily Mail's use of the private investigator Steve Whittamore, as uncovered in the information commissioner's report What Price Privacy Now? in 2006. Dacre is also expected to be asked about Associated Newspapers' accusation of "mendacious smears" against Hugh Grant after the actor gave evidence to the inquiry last year.

Akers will become the first serving police officer to be quizzed by the Leveson inquiry.

Two journalists, the Sunday Mirror reporter Nick Owens and the former News of the World showbiz correspondent Dan Wootton, will also appear.

Follow the inquiry live from 10am.

• Leveson inquiry
• National newspapers
• Newspapers
• Newspapers & magazines

Josh HallidayDugald Baird
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Chief executive Sir David Higgins says six senior managers will forgo payouts this year and money will be used to improve safety

The head of Network Rail has become the latest taxpayer-funded executive to be forced to waive a bonus after his company announced that he and five fellow senior managers would not be seeking a payout this year.

Sir David Higgins, the chief executive of the state-backed company, was one of six Network Rail bosses who were due to discuss a possible "incentive scheme" at an annual general meeting on Friday. Higgins was expected to collect a £340,000 bonus in addition to his £560,000 basic salary.

The announcement on Monday followed immense pressure from Labour and ministers for executives in publicly owned companies to waive bonuses, following a public backlash over large payments made at a time of stringent government cuts.

Justine Greening, the transport secretary, had taken the unprecedented step of saying she would attend the meeting to oppose the plans. She also planned to tackle the company's "corporate governance" by appointing a special director from the department.

The transport secretary said the firm's decision to rethink a future remuneration scheme was "sensible and welcome".

"I have made it clear to Network Rail at every stage that this proposed package did not go far enough in reflecting the need for restraint," said Greening.

DTI insiders claim that she first told Network Rail's senior figures that they should not expect bonuses in November this year.

"The fact that its executive directors have also chosen to forfeit their annual bonuses to charity is a sign that they have recognised the strength of public opinion," she added.

Labour had accused Greening of failing to use her powers to halt the bonuses altogether. The shadow transport secretary, Maria Eagle said: "It took Labour's intervention to force ministers to take this issue seriously. Justine Greening was still refusing to stand up for the British public and veto this proposed bonus plan when Network Rail managers took the decision for her."

Eagle said the government should now sit down with Network Rail to agree whether a bonus scheme of this scale was appropriate in a company funded by the taxpayer.

"At a time when so many families and rail commuters are being squeezed financially, when fares are rising by up to 13% and the rail network is performing inadequately, it was completely wrong for bonuses of this scale to have been even considered, let alone agreed," she said.

In a statement released by Network Rail, Higgins said the decision to waive this year's bonuses was made last week and that the meeting had been suspended. Instead, future bonus schemes will be discussed at a meeting yet to be scheduled.

The company could not say, however, if Higgins and fellow executives will continue to share in a long-term bonus scheme that could be worth up to £15.6m over the next three years for the rail group's six executive directors. The six will also earn £2.3m a year in salaries plus a maximum of £4.2m in bonuses.

This year's money will instead be diverted to a safety improvement fund for level crossings, Higgins said.

"I and my directors decided last week that we would forgo any entitlement and instead allocate the money to the safety improvement fund for level crossings. I can confirm that remains our intention," he said.

The statement said that the board of Network Rail had decided to recommend to its members that Friday's meeting be adjourned. "The board will take the opportunity to reflect further on how to incentivise performance in the company against the backdrop of the current context. It will continue to consult the secretary of state on wider issues of governance in advance of the government's command paper," it reads.

Network Rail's chairman, Rick Haythornthwaite, said in the statement that Friday's meeting was not to approve a specific annual bonus payment for executive directors, but was supposed to amend a previously approved long-term incentive scheme to ensure additional external scrutiny of performance.

"The issue of annual performance payments would only arise if Network Rail surpassed stretching performance thresholds and would only be decided in May after the end of the financial year."

The development comes a week after Stephen Hester, the chief executive of the Royal Bank of Scotland, which is 83% state-owned, waived a bonus package of almost £1m after a public backlash.

More than 20 MPs have signed a Commons motion saying Network Rail had been "found by the Office of Rail Regulation to be in breach of its licence" and had been responsible for "major asset failures, congested routes and poor management of track condition".

Last week, the company admitted health and safety breaches over the deaths of two teenagers killed at a level crossing in Essex in 2005.

Downing Street said ministers were not permitted to interfere in the "day-to-day running" of the firm, which receives £4bn of taxpayer funding a year and is guaranteed by the government.

But it said it would be looking at its corporate governance in the light of "problems" that had arisen.

Industry sources have accused politicians of using the issue of bonuses as a political football. "It is ridiculous. We are at risk of losing some our best brains because of a political witchhunt," the source said.

• Network Rail
• Travel & leisure
• Rail transport
• Executive pay and bonuses
• Transport policy
• Justine Greening

Rajeev Syal
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Obama maintains opposition to military intervention following Russia and China veto of UN security council resolution

The US has closed its embassy in Damascus in a move which increased diplomatic pressure on the Syrian regime as President Barack Obama declared he opposed military intervention.

The withdrawal on Monday of the ambassador Robert Ford and the 17 remaining staff comes amid increasingly brutal attempts by Syrian security forces to put down uprisings in Homs and other cities.

The US state department said the move reflected "serious concerns that our embassy is not protected from armed attack". Those concerns were heightened by two car bomb attacks on state security offices in Damascus last month.

The Syrian government was informed that the embassy had been closed only after Ford and his staff had left the country. Two left by air while the others crossed into neighbouring Jordan by road.

In the face of calls for stronger action after Russia and China vetoed a UN security council resolution targeting the Bashar Assad's government, Obama said he did not favour replicating the Nato bombing campaign that helped topple Moammar Ghaddafi in Libya in part because of a lack of consensus among the major powers.

He told NBC that a negotiated resolution to the conflict in Syria – where the latest government assault on Homs has killed dozens of people – is possible.

"I think it is very important for us to try to resolve this without recourse to outside military intervention. I think that's possible," he said. "The Assad regime is feeling the noose tightening around them. This is not going to be a matter of if, it's going to be a matter of when."

Asked about parallels with Libya, Obama said the situation was different in part because there is not the kind of unity among the major powers in dealing with Syria.

"I said at the time with respect to Libya that we would be making these decisions on a case by case basis based on how unified the international community was, what our capacities were," Obama said.

"But we have been relentless in sending a message that it is time for Assad to go, that the kind of violence we've seen exercised against his own people over this weekend and over the past several months is inexcusable. But not every situation is going to allow for the kind of military solution we saw with respect to Libya."

On Saturday, Obama accused the Syrian government of an "unspeakable assault against the people of Homs" and called on Assad to "step aside and allow a democratic transition to proceed immediately".

Obama's comments follow sharp criticism in the US, Europe and the Arab world of Russia and China for vetoing the UN security council resolution calling on Assad to step down.

On Monday, America's UN ambassador Susan Rice said China and Russia were running the risk of suffering the same sort of international isolation as Assad because of their decision to block a security council vote embracing an Arab League solution for the Syrian crisis.

Rice said she thinks both Moscow and Beijing "will come to regret" their votes Saturday against the Arab League-sponsored resolution aimed at moving Assad in the direction of a peaceful transition to democracy in his violence-wracked country.

US secretary of state Hillary Clinton also denounced the vetoes as a travesty. On Sunday, she called for "friends of democratic Syria" to rally against Assad's regime, previewing the possible formation of a group of like-minded nations to coordinate assistance to the Syrian opposition.

• Syria
• United Nations
• United States
• Bashar al-Assad
• Middle East peace talks

Chris McGreal
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New measures come as White House continues to ratchet up pressure on Tehran to abandon nuclear programme

President Barack Obama has ordered new sanctions on Iran, including its Central Bank, moving to enforce a law he signed in December.

In a letter to Congress Monday, Obama said more sanctions are warranted "particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks." He said the problems included the hiding transactions of sanctioned parties, the deficiencies of Iran's anti-money laundering regime and the unacceptably high risk posed to the entire international financial system posed by Iran's activities.

The Central Bank sanctions were included as an amendment in the wide-ranging defence bill Obama signed into law at the end of 2011. The White House said Obama signed the executive order approving the sanctions on Sunday.

The new measures come as the White House tries to both ratchet up pressure on Tehran to abandon its nuclear programme and dissuade Israel from launching a unilateral strike on Iran, a move that could roil the Middle East and jolt the global economy.

Obama said Sunday that he does not believe Israel has yet decided whether to attack Iran. The president said he still believes a diplomatic solution is possible.

Iran insists its nuclear pursuit is for peaceful purposes, but the west accuses Iran of developing the know-how to build a nuclear bomb. Defence secretary Leon Panetta last week would not dispute a report that he believes Israel may attack Iran this spring in an attempt to set back the Islamic republic's nuclear program.

In recent weeks, both the US and European Union have imposed harsher sanctions on Iran's oil sector, the lifeblood of its economy.

In Washington, the Senate Banking Committee easily approved yet more penalties on Tehran last week. The sweeping measure, which is not yet law, would target Iran's Revolutionary Guard Corps, require companies that trade on the US stock exchanges to disclose any Iran-related business to the Securities and Exchange Commission, and expand penalties for energy and uranium mining joint ventures with Tehran.

• Iran
• Israel
• United States
• Barack Obama
• Middle East peace talks

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Special immigration appeals commission to consider bail conditions for cleric detained for six and a half years

The radical Islamist cleric Abu Qatada is to be released on bail within days despite continuing to pose a risk to national security, the special immigration appeals commission (Siac) in London has ruled.

Mr Justice Mitting made the decision in the wake of a judgment at the European court of human rights (ECHR) last month that sending him back to Jordan to a face a terrorist trial based on "torture-tainted evidence" would be a flagrant denial of justice.

Siac is to consider Qatada's bail conditions before finally ordering his release. The Home Office is expected to press for the most stringent terms possible, including a 16-hour daily curfew. Qatada's lawyers have argued to the commission that a curfew of more than 12 hours would amount to "deprivation of liberty" under human rights legislation.

Qatada, described by a Spanish judge as Osama bin Laden's right-hand man in Europe and a leading spiritual adviser with links to al-Qaida, has spent longer in custody than any other detainee in modern immigration history, his barrister said in a written submission to Siac.

Ed Fitzgerald QC said: "The period falls into a category of time that is so grave – and indeed unprecedented in the modern era – as to bear no acceptable continuing justification."

Qatada was first detained in Britain as an international terrorism suspect in October 2002 and then held for two-and-a-half years under the Belmarsh powers of indefinite detention without trial, until they were quashed by the House of Lords.

His period of immigration detention pending deportation started in March 2005 and has continued except for six months on bail conditions that included a 22-hour curfew in 2008.

Fitzgerald said the six-and-a-half years Qatada had spent in immigration detention was the equivalent of a 13-year prison sentence. "It is excessive and inconsistent with fundamental principles," he told the judge.

"We are dealing with indefinite detention for the purposes of national security. There is no realistic prospect of his deportation taking place in the immediate future."

The home secretary, Theresa May, has been fighting to keep Qatada locked up at Long Lartin maximum-security prison, in Worcestershire, pending a decision on whether to appeal against the ECHR ruling and while fresh diplomatic assurances are negotiated with Jordan that evidence gained through torture would not be used against him in any retrial on his return.

Tim Eicke QC, for the home secretary, said there was "no indication here from the appellant that he has changed his views or his attitude to the UK and the threat he poses to it". He said Qatada had shown a "willingness to ignore the rules", even while behind bars as a category-A prisoner.

"The risk he posed in May 2007 and 2008 is the risk he poses today," Eicke said, adding that the risk Qatada may try to abscond "might well have increased" now that he knows British diplomats are seeking assurances from Jordan to overcome the one obstacle that stops him from being deported.

Eicke said he did not accept that Qatada's detention was unlawful. The length of detention had to be weighed against the risks he posed, and "he poses a particulary serious risk to the UK", he said.

• Abu Qatada
• Immigration and asylum
• Human rights

Alan Travis
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French authorities are investigating the conspicuous Paris fortunes of three serving African leaders and their families

At 42 Avenue Foch, the tree-lined boulevard that is one of Paris's most expensive streets, looms a five-storey private mansion complete with disco, spa room, hair salon, gold- and jewel-encrusted taps, lift, pastel pink dining room and a breathtaking balcony-view of the Arc de Triomphe.

Local people always knew when there was about to be a visit from its 41-year-old "playboy" resident, Teodorin Obiang, eldest son of the autocratic president of Equatorial Guinea. Days before Obiang Jr's private jet touched down, two massive lorries would pull up outside and disgorge a sea of fresh flowers to dress the interior of the mansion.

When Obiang was in residence, passersby would see a parade of couturiers from Paris's top design houses, including Yves Saint Laurent, Dior, Louis Vuitton, waiting to be admitted for fittings before returning with vanloads of made-to-measure clothes. Crates of the most expensive burgundy were another regular delivery.

On one occasion 15,000 DVDs were hauled in on wooden pallets – roughly 41 years worth of viewing.

But the most public statement of opulence was the fleet of luxury, turbo-charged, yellow, red and blue sports cars, parked in garages or in the cobbled courtyard.

"The noise-factor was extreme," one local said. "He seemed obsessed with security so when he wanted to go out between midnight and 2am, he'd order the chauffeur to warm up four cars so no one knew which he'd take. Can you imagine the noise of Ferraris, Porsches and Maseratis all running at once? Then he'd come down and decide to take a fifth car and that would have to be started."

But the courtyard has fallen quiet, the mansion empty of occupants. Three months ago, in a morning raid, French police towed away 11 luxury cars, including a Maserati, a Porsche Carrera, an Aston Martin and a Mercedes Maybach.

At the time, Obiang Jr, whose salary as Equatorial Guinea's agriculture and forestry minister was €3,200 (£2,700) a month, owned two Bugatti Veyrons, the most expensive and fastest street car in the world, costing about €1m a piece and reaching 250mph . He was in the process of acquiring a third.

The raid was the first in the landmark French inquiry known as the case of the "ill-gotten gains".

In an unprecedented move, three serving African leaders and their families are under investigation in Paris over whether they embezzled state funds to acquire vast assets in France including bank accounts, Riviera villas and fleets of luxury cars.

The clan of Gabon's late leader Omar Bongo and its current leader, his son Ali Bongo; the Congo-Brazzaville leader, Denis Sassou-Nguesso and his family, and President Teodoro Obiang of Equatorial Guinea and his clan are accused of having assets worth €160m in France, from penthouses and villas to scores of bank accounts and luxury car fleets.

The leaders and their families have denied building up personal wealth in France through embezzlement, money-laundering and misuse of public funds.

Judges are beginning the detailed task of trying to prove such spectacular wealth was directly siphoned from the coffers of the oil-rich states to the detriment of populations left to live in misery.

In 2000, just as Obiang began building up his car collection, Equatorial Guinea was on paper the wealthiest African country per inhabitant, yet a majority of its people lived below the UN poverty threshold.

With billions of dollars worth of assets of Muammar Gaddafi frozen by the UN and member countries, and other legal moves to recover the wealth of deposed autocrats such as Tunisia's Zine al-Abidine Ben Ali and Egypt's Hosni Mubarak, the drive to seize billions plundered by corrupt leaders has never been higher.

But the French case against three serving African leaders, initiated by anti-corruption NGOs as part of a long legal battle, also illustrates the limits on western willingness to act against rulers still in power.

"With deposed heads of state after the Arab spring, there was no problem, the whole community was scandalised at the plundering of money from their countries. We're warning against double standards: why should you have to wait for a leader to fall to put a stop to corruption?" said Maud Perdriel-Vaissiere, head of Sherpa, one NGO leading the case.

The police inquiry has given an unprecedented insight into the lifestyle of certain African leaders. When the spectacular art collection from the homes of the late fashion designer Yves Saint Laurent went up for auction in Paris in 2009 it was called the art sale of the century and raised more than €370m. French authorities later revealed that Obiang Jr bought 109 lots at the sale, costing €18m.

Olivier Pardo, lawyer for Equatorial Guinea in France, said the case of the "ill-gotten gains" violated international law and that he would contest the case and pursue France through the international courts. It may not just be France.

A US government court action is seeking to seize $71m (£45m) of assets from Obiang Jr in the US which it claims were paid for through corruption. His US assets are said to include a $38.5m Gulfstream V private jet, a $30m mansion in Malibu, California, and $1.8m of Michael Jackson memorabilia, including a white crystal-covered glove and a crystal-covered pair of socks. A spokesman for Equatorial Guinea denied wrongdoing. An inquiry into the Obiangs' assets is also underway in Spain.

On a corner of Paris's chic Avenue Rapp, in the heart of the wealthy 7th arrondissement, a short walk from the Eiffel tower, the gentlemen's outfitters Pape tells its own story of the lifestyle of leaders of oil-rich states.

The Senegalese tailor Pape Ibrahima N'diaye, a Paris institution known as "Monsieur Pape", is a favourite of French lawyers, politicians and businessmen.

Denis Sassou N'Guesso, the 68-year-old leader of Congo-Brazzaville, famous for his impeccable suits and dress sense, did not hold back in his private fittings.

A new book, The Scandal of the Ill-Gotten Gains, by the investigative journalists Thomas Hofnung and Xavier Harel, has sent shockwaves through the French establishment with fresh details of spending habits.

In it, the authors reveal a note by Tracfin, the French anti-money laundering authority, which states that in April 2010, Sassou N'Guesso ordered 91 suits from Pape for €276,000. A month earlier, in March 2010, he had bought 48 shirts for €24,000. In one year, in the 12 months from November 2009, Sassou N'Guesso spent more than €652,000 on clothes there. His lawyer dismissed the sum as "false and absurd".

The Sassou N'Guesso clan have 24 properties in France in their own name, 112 bank accounts and various sports cars. Meanwhile, NGOs point out that 70% of Congo-Brazzaville people live on less than $1 a day.

In the heart of the 8th arrondissement, not far from the French president's Elysée palace, a mansion on the quiet Rue de la Baume has come to symbolise the wealth of Gabon's late leader Omar Bongo. When Bongo died in 2009, he was the world's longest-ruling head of state, save for the British and Thai monarchies.

A friend of all recent French presidents, at one time he owned more Paris properties than any other foreign leader. The Bongo clan has the biggest property portfolio in the "ill-gotten gains case".

A preliminary police report claimed he and his close relatives own 39 properties in France, mostly in exclusive districts of Paris and on the French Riviera. They also have 70 French bank accounts and at least nine luxury cars in France, including Ferraris and Mercedes worth a total of €1.5m. Bongo's son, Ali Bongo, was elected president in 2009 after his father's death. That year he bought himself a Bentley Continental Flying Spur for more than €200,000, which can run for 1,500 miles without refuelling despite the fact that oil-rich Gabon has less than 500 miles of asphalt roads.

Anti-corruption campaigners have already trooped past the €18.9m mansion on Rue de La Baume, bought in 2007 in the name of two Bongo children, then 13 and 16, and other relatives, in what some call Paris's "ill-gotten gains" walking tour. Rooms are full of unopened boxes of electrical kitchen goods which suggest the house hasn't yet been moved into. A broken doorbell hangs from a wire beside the entrance.

When in power, Omar Bongo's official salary was reportedly €14,940 to €20,000 a month. French officials are now investigating where the money came from. A 2007 French police report indicated that the payments for some vehicles "appeared at least atypical".

The case has shed further light on allegations of French collusion in corruption under the cosy system known as "françafrique" – in which kickbacks, petrodollars and privileged relations defined Paris's foreign policy towards its former colonies.

Recent allegations about African leaders regularly giving briefcases of cash to French politicians has ruffled feathers in Paris. "It has contributed to a climate of mistrust of politicians, one of a number of different affairs which have sparked revulsion in France," said Hofnung, co-author of the Scandal of the Ill-Gotten Gains.

Paris, with its image as the capital of the art of living, was always popular with high-spending dictators. ¬

The question now is what impact the case has in other countries where serving leaders placed their cash.

Tim Daniel, a British lawyer and anti-corruption specialist, said: "London is a No 1 destination for kleptocrats." But British law does not allow for cases to be brought by NGOs, so any recovery of assets would depend on the money-laundering authorities.

One of Nigeria's most influential and wealthy politicians, James Ibori, has been charged in London with 25 offences relating to alleged money-laundering and fraud and will soon face trial.

"The international anti-corruption community is following the French case intensely," Daniel said. "It's a very interesting precedent."

• France
• Equatorial Guinea
• Gabon
• Congo Brazzaville
• Africa
• United Nations

Angelique Chrisafis
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