The International Monetary Fund's top policy-making group failed at the weekend to resolve divisions over debt relief for the world's poorest countries.
UK finance minister, Mr Gordon Brown, said the International Monetary and Financial Committee (IMFC) had decided that further work needed to be done to develop "a proper framework for debt sustainability".
Seated beside IMF managing director, Rodrigo Rato, Mr Brown told reporters that new ways had to be found to cancel the debt owed by poor nations to multilateral lenders.
While the US has also called for 100 per cent debt relief in some countries, the plan depends on juggling existing funds rather than providing new money.
"It was generally agreed that we would have to find additional funding to finance the next stage of debt relief, and that it therefore has to be funded by some new mechanism and not by some form of substitution," Mr Brown said.
Debt relief for poor countries is currently dealt with under the Heavily Indebted Poor Countries (HIPC) initiative, managed by the IMF and World Bank. Currently 27 countries, the bulk of them in Africa, have qualified for some form of HIPC debt relief. The IMF this week extended the initiative by two years to 2006.
Mr Brown said he recently committed £100 million sterling (€144 million) a year to pay off 10 per cent of the debt owed by about 30 impoverished countries to the African Development Bank and World Bank. He said he hoped other countries would follow his lead.
The British minister has proposed a revaluation of the IMF's massive gold stocks, which would not involve sales, as a way of raising additional cash for debt relief. The IMF's 103 million ounces of gold is one of the biggest bullion caches in the world.
Mr Brown denied his proposal to revalue IMF gold had run into opposition. He said the Group of Seven (leading world economies) had agreed on Friday to examine the idea and voiced optimism it would succeed.
He said various off-market transaction proposals would be examined to release proceeds from the gold holdings, which he said were valued at one-eighth of current market rates or about $50 per ounce.
However, South African finance minister, Mr Trevor Manuel, said on Saturday the proposal to revalue the gold holdings should involve both producers and buyers. His Canadian opposite number, Mr Ralph Goodale, dismissed the idea on Friday as a "non-starter".
Mr Donald Kaberuka, Rwanda's minister of finance and economic planning, told a separate press briefing developing countries were wary of differing G7 positions on debt relief.
"People are sceptical about the ability and the willingness of the international community to respond," Mr Kaberuka said.
He said Rwanda paid about $20 million in debt servicing every year, the same amount as the country's health budget.
An official communique from Saturday's IMFC meeting didn't mention either gold revaluation or the debt write-off.
