Trees have been brought down and cars swept away, blocking roads and hampering relief teams. Some bridges and roads have been washed away. British holidaymaker Cathy Sayers told the BBC Funchal was like a ghost town. She said the infrastructure had been wrecked. "The drains just cannot cope with the water that's coming down from the mountains - they are just overfilled with sludge. There had not really been any warning that it would be quite so bad", she said. "I think everyone is extremely shocked that this has happened at this time of year."

Local media say the authorities' main concern now is for residents of Nuns valley - an isolated mountainous region that rescue workers have been unable to reach.

The fall of the government in the EU country, just two days short of the coalition's third anniversary, all but guarantees that the 2,000 Dutch troops will be brought home this year. That would be the first major crack in the coalition of some 40 nations battling a steadily increasing Taliban insurgency in Afghanistan. The collapse, the fourth for a cabinet led by Balkenende in eight years, throws into doubt the scope and timing of planned budget cuts for next year as well.

Right-wing legislator Geert Wilders' Freedom Party, which has called for an end to the Afghan mission, could be the big winner at the next election. Opinion polls tip the party, campaigning on an anti-immigration ticket, to become the largest or second biggest party in parliament. "Unlike the leftish parties of the Dutch political spectrum, we are not against fighting against the Taliban and fighting for freedom in Afghanistan, but we believe the Dutch have done enough," Wilders told Reuters in an interview.

The Netherlands has some 1,940 troops based mainly in the volatile southern Afghan province of Uruzgan and has lost 21 of its soldiers there, adding to Dutch opposition to the war.

Customs workers have extended their strike against salary freezes and bonus cuts through next Wednesday, when unions across Greece will hold a general strike that is set to bring the country to a standstill. European finance ministers have told Athens it must demonstrate signs of fiscal improvement by March 16 or it will be ordered to impose even tougher budget cuts. Greece has promised to slash its deficit from an estimated 12.7 percent of gross domestic product to 8.7 percent this year.

Taxis also held a 24-hour strike Friday, protesting parts of the austerity package that increased fuel tax and will force them to issue receipts. Taxi drivers chanting "The measures mean unemployment" staged a noisy protest in central Athens that choked traffic. "These measures won't do anything, all they will do is throw us out of work," cab driver Anastasis Damianidis said. "We can't become tax collectors - that's what they're trying to do. We will keep demonstrating."

Austin Police Chief Art Acevedo said the incident was a single act by a sole individual, who appeared to be targeting the federal building. He refused to classify it as terrorism. The FBI identified the pliot as Joseph Stack, a 53-year-old software engineer. Stack was confirmed dead, but his body has not yet been recovered.

A US law official said investigators were looking at a lengthy, anti-government "manifesto" Stack is believed to have written on his website. The message outlines problems with the IRS and says violence "is the only answer."

To read his message, go to:- http://www.foxnews.com/story/0,2933,586627,00.html

In a written statement, the White House said Mr Obama had expressed support for the preservation of Tibet's "unique religious, cultural and linguistic identity and the protection of human rights for Tibetans in the People's Republic of China." The meeting, which the White House put off last year so as not to interfere with Mr Obama's trip to Beijing in November, is the latest evidence of the more muscular posture that the Obama administration has been adopting with China, after a year in which China has taken a firm stance in its relations with the United States on a number of issues.

Last month, the administration announced a $6 billion arms sales package to Taiwan, infuriating Chinese officials. The meeting on Thursday between Mr Obama and Tenzin Gyatso, the 14th Dalai Lama, did not please Chinese officials, either. China, which regards the Dalai Lama as an advocate of Tibetan independence, said that it was "strongly dissatisfied" and that it expected the United States to try to make amends.

The Dalai Lama has lived in exile in India since the Chinese Army crushed an uprising in his homeland in 1959, and he is revered as the spiritual leader of Tibetan Buddhists. He has been pressing to return to China to advocate for greater cultural and religious freedoms for his followers. He has said he wants only genuine autonomy for Tibet, not independence.

The Fed chose to bump up the so-called "discount" lending rate by one-quarter point to 0.75 percent. It takes effect Friday. The central bank said the step should not be seen as a signal that it will soon boost interest rates for consumers and businesses. It repeated its pledge to keep such rates at record-low levels for an "extended period" to foster the economic recovery.

The Fed had signaled for weeks that a higher discount rate was coming, though the timing of Thursday's decision caught some by surprise. It portrayed its action as moving its emergency program for banks closer to normal. The announcement came after the financial markets had closed. Investors saw it initially as a prelude to higher borrowing costs across the board. In after-hours trading, the dollar strengthened on the expectation of higher rates. Yields on two-year Treasury securities rose, and stock futures dipped.

After the sell-off in stock futures, Pimco Managing Director Bill Gross warned investors not to overreact. "I'd accept the Fed at its word - that this isn't a change in monetary policy or in the timing of it," he said. "Calmer heads may prevail tomorrow." TJ Marta, a market strategist, said he thinks higher rates for American borrowers are still months away. But "I think one man's normalization is another man's tightening," he said of investors' initial anxiety.

Treasury officials embarked on an unusual ring-round to reassure City analysts and investors following news of the shortfall, which was 9.6 billion pounds higher than net borrowing in January last year. They insisted that Britain is still on target to meet its full-year borrowing targets, and that they had expected a weak January. But markets were hardly reassured. Gilt yields rose to a 15-month high of 4.1 percent, reflecting investors' concern about the credit-worthiness of the UK Government.

The pound also weakened, closing down almost a cent against the dollar at $1.5642, and down almost half a cent against the euro at 1.1478. David Kern, chief economist at the British Chambers of Commerce, said the public finances figures emphasised "the dangers facing Britain's international credit rating."

Borrowing is rising as the government spends more on benefits and other measures to prop up a severely weakened economy, at a time when tax receipts are dwindling. In January receipts from income and wealth taxes - including income tax, corporation tax, and capital gains tax - were down 16 percent compared with a year earlier. Total current spending was up almost 10 percent.

The 8am religious slot on Radio 4's Today programme aims to provide reflection from 'a faith perspective' on topical issues. Director General Mark Thompson is understood to have discussed the idea when he visited the Vatican earlier this month. Mr Thompson, a devout Roman Catholic, has yet to secure papal agreement but executives from the corporation are to continue to discuss the appearance with Vatican officials.

Radio 4 Controller Mark Damazer said Benedict XVI was part of a 'wish list' of guests which also included Bruce Springsteen and Sir Mick Jagger for Desert Island Discs. He added: 'I won't leave this job until I have got the Pope doing Thought for the Day.'

However, the BBC's plan has attracted criticism. Terry Sanderson, president of the National Secular Society, said: 'The Pope will have a four-minute slot to lecture us about morality but no one will be able to challenge anything he says. Why won't he be invited to take the 8.10 interview slot on the Today programme with John Humphrys - and let's have a bit of finger-wagging the other way. There are a lot of questions to be answered, but all we're going to get from the BBC is propaganda.'

While it was unclear how Argentina might enforce the shipping blockade that it declared on Tuesday, its Foreign Ministry said that it intended to prevent operation of the rig around the Falklands, known locally as Las Malvinas. Asked by local media about the arrival of the Ocean Guardian, which crew waiting in the Falklands say has been shadowed by Argentine jets, Victorio Taccetti, the Deputy Foreign Minister, said: "If it's going to Las Malvinas it will have to request authorisation."

Mr Taccetti said that Argentina would take unspecified measures to stop oil exploration off the Falklands but said that he was not considering a repeat of the 1982 conflict with Britain. The rig was on the verge of moving from international waters and into territory claimed by Britain and Argentina around the Falklands last night. It is due to move to its drilling location on Friday.

The action drew anger from British politicians. The secretary of the all-party parliamentary group on the Falklands, Andrew Rosindell, demanded that the Argentine Ambassador be called in. "I don't think we should appease Buenos Aires - we found out what happens last time," Mr Rosindell said.

Regulatory filings show that his $8.8billion investment vehicle, Soros Fund Management, raised its stake in exchange-traded fund SPDR by 3.7million shares to 6.2million shares in the three months ending December 31, 2009. The new shares were bought at a price of $421million, taking his total holding in the fund to $663million at the end of December.

In addition, Mr Soros's investment vehicle owns 11,000 call options that will permit it to buy an extra 1.1million shares should gold prices move higher. Soros Fund Management also increased its stake in Canadian-based gold producer Yamana Gold, buying 60,880 shares to take its total position to 85,880 shares, worth $973,314 at the end of December.

However, the actions of the Mr Soros's investment fund seem to be at odds with his own viewpoint. During the World Economic Forum in Davos in late January, Mr Soros said: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."

Gold hit a new high of just over $1,225 an ounce in December, having risen 40 per cent in the prior 12 months, and touched an all-time high in euros of 818 an ounce earlier this week. On Wednesday, gold was trading in New York at $1,115.55 an ounce, having hit a one-month high of $1,126.85 earlier in the day. Mr Soros is not alone in increasing his stake in the SPDR, with new filings also showing that China Investment Corporation (CIC), Beijing's main overseas investment fund, taking a 0.4 per cent stake in the fund worth $155.6million.

CIC's investment is equivalent to just 0.4 per cent of the 33.9million ounces of gold maintained by the Chinese government, but is part of a growing trend of major funds investing in the metal.

Israel's ambassador to the UK was summoned to the Foreign Office to give his explanation as the diplomatic row intensified. Ron Prosser will meet Sir Peter Ricketts, the permanent under secretary at the Foreign Office, on Thursday where the ambassador is expected to be asked whether Israel played any part in assassination. Gordon Brown, making his first public comments about the incident, promised a "full investigation" into the passport forgery.

Mossad has been accused by Hamas, the Islamist group that controls Gaza, of being behind the murder of its military commander Mahmoud al-Mabhouh, who was found dead in his hotel room in Dubai on January 20. A senior Foreign Office source told The Daily Telegraph: "If the Israelis were responsible for the assassination in Dubai, they are seriously jeopardising the important intelligence-sharing arrangement that currently exists between Britain and Israel. If it transpires that Israel has been using British passports to assassinate its opponents, the British government will need to give serious consideration to any future cooperation."

Israel's foreign minister Avigdor Lieberman said there was "no reason to think it was Mossad" which carried out the alleged hit, but refused to issue a denial. He said Israel had a "policy of ambiguity" on intelligence matters, and "never confirms and never denies" involvement in operations.

The USGS said the quake was centered on the Russian coast along the sea of Japan, 61 miles (98 kilometers) west-southwest of Vladivostok, Russia and about 70 miles (110 kilometers) east from Yanji city in northeast China's Jilin province. A man at the Jilin province earthquake bureau said the agency was trying to get more information and did not have any immediate details.

Investors remained focused on the relative speed at which the world's economies were recovering from recession, punishing some laggards in Europe and rewarding those showing more confidence. Several Federal Reserve policy makers, comfortable with the US recovery, want to begin selling securities relatively soon to cut back massive help to the financial system, the central bank said overnight.

"The US took a very aggressive response to the crisis (monetary, bank recapitalization, fiscal) and while there are costs to these measures, they will likely result in a faster exit from the recession," Michael Hasenstab, senior vice president and co-director of Franklin Templeton's fixed income group, told Reuters in a chat room interview.

Gold slid 0.3 percent to $1,102.20 an ounce after peaking at $1,126.85 the highest since January 20, before the IMF news on gold sales. The precious metal has posted gains in every year since 2000 and last year surged 25 percent. The stronger US dollar weighed on commodities and materials stocks, with US crude futures down 0.5 percent to $76.95 a barrel. The Reuters-Jefferies CRB index of 19 commodity futures is down 3.4 percent so far this year.

The damage from the latest cyberattack is still being assessed, and affected companies are still being notified. But data compiled by NetWitness, the closely held firm that discovered the breaches, showed that hackers gained access to a wide array of data at 2,411 companies, from credit-card transactions to intellectual property.

The hacking operation, the latest of several major hacks that have raised alarms for companies and government officials, is still running and it isn't clear to what extent it has been contained, NetWitness said. Also unclear is the full amount of data stolen and how it was used. Two companies that were infiltrated, pharmaceutical giant Merck & Co and Cardinal Health Inc, said they had isolated and contained the problem.

Starting in late 2008, hackers operating a command center in Germany got into corporate networks by enticing employees to click on contaminated websites, email attachments or ads purporting to clean up viruses, NetWitness found. In more than 100 cases, the hackers gained access to corporate servers that store large quantities of business data, such as company files, databases and email. They also broke into computers at 10 US government agencies. In one case, they obtained the user name and password of a soldier's military email account, NetWitness found. A Pentagon spokesman said the military didn't comment on specific threats or intrusions.

The spyware used in this attack allows hackers to control computers remotely, said Amit Yoran, chief executive of NetWitness. NetWitness engineer Alex Cox said he uncovered the scheme January 26 while installing technology for a large corporation to hunt for cyberattacks. "It highlights the weaknesses in cyber security right now," said Adam Meyers, a senior engineer at government contractor SRA International Inc who reviewed the NetWitness data. "If you're a Fortune 500 company or a government agency or a home DSL user, you could be successfully victimized."

That attack was described in a February 5 report from the Department of Homeland Security, which said it was issuing an alert to the government and other organizations to "prevent further compromises." A DHS official said that Zeus was among the top five reported tools for malware infections.

Asked about the political climate across the country, Biden said in a nationally broadcast interview that "we understand why they're angry ... We get it."

Speaking of intense partisanship in the capital, Biden said on CBS's "The Early Show" that "I've never seen it this dysfunctional." He said the message coming from the stunning Republican upset in the recent Massachusetts election was, "Hey guys, get your act together. Get something going."