Whitehall mandarins have begun creating detailed dossiers containing reductions in expenditure that are far deeper than the more modest savings being proposed by Labour and Conservative politicians. SENIOR CIVIL SERVANTS HAVE LET IT BE KNOWN THAT THEY ARE SCEPTICAL ABOUT THE CLAIMS MADE BY BOTH MAIN PARTIES ON PUBLIC SPENDING.

WHILE LABOUR WANTS TO INCREASE EXPENDITURE despite the £175 billion budget deficit, the Tories, using figures from the Institute for Fiscal Studies (IFS), have acknowledged the need for cuts of up to 10%. Mandarins, fearing a prolonged recession and a collapse in tax revenue, have begun planning for more severe cuts of up to 20%. The dossiers will be handed to cabinet ministers the day after the next general election, whichever party wins.

Jonathan Baume, general secretary of the FDA, which represents senior civil servants, said: "It could be even worse for some departments than the IFS has predicted." Lord Turnbull, the former cabinet secretary, echoed the warning. "The civil servants will have to assume that whatever both parties are saying today, in the end they will have to be bolder. WHAT POLITICIANS SAY ON THE RECORD WILL UNDERESTIMATE THE MAGNITUDE OF THE TASK," he said.

Brighton and Hove Council has now told the mother it is reviewing its decision after her lawyer argued it was obliged to try to place the boy with foster parents of the same faith. The boy is a churchgoer and his mother, who is too ill to look after him, wanted him to be fostered by heterosexual parents in line with Catholic teaching on the family.

She said last night: 'I am so happy and relieved. So is my son. Our religion is very important to us.' Barrister Neil Addison argued that new equality laws that guarantee gays 'equal access to goods and services', including fostering, can be overruled by older laws designed to protect children. THE 1989 CHILDREN ACT REQUIRES COUNCILS TO 'GIVE DUE CONSIDERATION' TO THE CHILD'S RELIGION WHEN CHOOSING FOSTER PARENTS.

The council told her the gay couple were fully qualified, but a friend of the mother said there was no indication it made any effort to find a Catholic or conventional family for the boy. The council declined to comment.

THE FAILURE TO TEACH PRIMARY SCHOOL CHILDREN SCIENTIFIC TRUTH is playing into the hands of advocates of creationism - the belief that God created the world in six days, according to James Williams, lecturer in education at Sussex University. He warned that creationists go to great lengths to influence primary children with comics, magazines and videos that mix scientific misconceptions with proper science.

TV programmes such as The Flintstones and Barney & Friends, and films such as One Million Years BC, which stars Raquel Welch as a bikini-clad cavewoman, created a pop-culture cliché of interaction between humans and dinosaurs which is exploited by creationists, he told the Times Educational Supplement. He cited creationist literature which contained images of dinosaurs in the Garden of Eden or descriptions of dinosaurs dying out during the great flood.

'THIS WILFUL DISTORTION OF REAL SCIENCE IN FAVOUR OF PSEUDOSCIENCE is nothing less than intellectual abuse,' he said. 'While creationists have a right to publish and voice their views, NO MATTER HOW FAR FROM REAL SCIENCE THEY MAY BE, the science education community must respond by introducing evolution and the reality of how life developed and diversified much earlier in the curriculum to combat the establishment of creationist misconceptions.'

At a monthly meeting, the ministers are also likely to conclude that the current fall in consumer prices should not cause too much concern, and they will debate further when they should start cutting their budget deficits swollen by fiscal stimulus programmes. "When discussing the economic situation, the ministers will focus on the impact of the crisis on potential growth," one diplomat said, referring to a term describing the highest economic expansion sustainable over the long term.

European Union and euro zone officials believe that potential growth in the 16-nation region, which was already low before the crisis at 2 percent, will shrink while high unemployment would persist for long. "You can see that Europe will not have the growth potential it had before the crisis," EU Monetary Affairs Commissioner Joquin Almunia said this week. BUT THE MINISTERS ARE LIKELY TO STATE THAT THE WORST IS OVER FOR THE EURO ZONE, although a modest recovery would start only in 2010, with its scale also depending on whether the financial system could be healed.

ITS BALANCE SHEET HAS MORE THAN DOUBLED TO AN IMPOSING 14 PERCENT OF GROSS DOMESTIC PRODUCT, and President Obama wants to endow it with ever greater regulatory control. But there is one basic central banking prerogative that the Fed still lacks: the right to issue its own bonds. The reluctance of Congress to confer this authority may end up retarding America's economic recovery.

Bond issuing privileges will be increasingly important for central banks worldwide because they offer the neatest way of mopping up the vast amounts of liquidity they have pumped into the financial system. Bank chiefs with this right will find it easier to pivot when the economy revives, tightening monetary policy swiftly to avoid any inflationary threat. Knowing that they have this policy dexterity makes it easier to justify bold action now to stimulate growth.

Several months ago, Ben Bernanke and other Fed officials made no secret that they coveted the ability to issue bonds, which most other major central banks take for granted. SENSING PUSHBACK FROM LAWMAKERS - MANY OF WHOM ARE INTIMIDATED BY THE FED'S EXPANDING MUSCLE - they have discreetly dropped this request. This was a mistake.

There is strong evidence that the Fed may now have to rely on lesser tools when the time comes to drain liquidity. The Fed will face several challenges. First, it may not be immediately able to flog off THE MOUNTAIN OF ASSETS IT HAS ACCUMULATED BEFORE IT RAISES RATES. Many of these securities are illiquid and selling off Treasuries may unnerve markets and push up rates.

The short answer is no one knows. The only way they were ever going to find out was to leave Iraq's own forces to it and hope the whole thing doesn't come tumbling down. They started doing that on Tuesday when they pulled out of Iraqi cities.

It's been an encouraging start. A big bomb in Kirkuk cast a shadow over Iraq's celebrations of its new-found sovereignty, but since then things have been relatively quiet. Militants might try to take advantage by stepping up attacks, but for the moment they seem content with celebrating a "victory" over the occupation — and setting off the odd bomb, of course. The United States' coalition partners have for the most part long since departed. British forces handed over southern Iraq to the Americans in April, but since 2007 their 4,000 odd troops left had been largely confined to Basra airport anyway.

And one thing the crystal ball gazers have learned about Iraq's hugely complicated, many-sided conflict is that the past is rarely a reliable guide to the future. MANY IRAQIS SEEM CONVINCED THE INSURGENTS ARE JUST BIDING THEIR TIME, SHARPENING THEIR KNIVES AND STOCKPILING EXPLOSIVES WAITING TO REIGNITE THE CONFLICT. But whether or not Iraq can look after itself, at some point the Americans have to say: Look, we've done our best to get the lid back on Pandora's Box. Now it's over to you.

"The major part of INDIAN reserves is in dollars - that is something that's a problem for us," Tendulkar, chairman of the Prime Minister's Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.

Singh is preparing to join leaders from the Group of Eight industrialized nations - the US, Japan, Germany, Britain, France, Italy, Canada and Russia - at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representatives to the summit.

As the talks have neared, CHINA AND RUSSIA have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

"South Korea's military is fully prepared to deal with any threats and provocations by the North, based on a strong joint defense alliance with the US," the statements added. North Korea fired the missiles off its east coast, Yonhap news reported earlier, citing a government official. The missiles are estimated to have a range of as much as 500 kilometers (310 miles), enough for the North to strike most of South Korea, the Korean-language news agency said.

The communist nation fired four short-range missiles on July 2 in defiance of United Nations sanctions imposed after a nuclear test. North Korea has used such launches in the past to counter international condemnation of its nuclear program. The regime fired six short-range missiles in May, after its detonation of a nuclear bomb.

The group has campaigned against active homosexuality in the Anglican Communion after being established last year. One supporter, the Bishop of Rochester, the Right Reverend Michael Nazir-Ali, told the Sunday Telegraph HOMOSEXUALS SHOULD "REPENT AND BE CHANGED".

The fellowship was set up at a conference of conservative Anglican bishops and leaders in Jerusalem in the wake of the ordination of an openly gay bishop in New Hampshire, and includes a breakaway Anglican Church in the US. IT PROMOTES A TRADITIONALIST READING OF THE BIBLE WHICH OUTLAWS ACTIVE HOMOSEXUALITY. BBC religious affairs correspondent Robert Pigott says the group constitutes a powerful lobby inside the communion to campaign against both the ordination of gay clergy and the blessing of same-sex relationships in church.

The fellowship has already helped to unite traditionalist American congregations who left the Episcopal Church into a small separate Church. The group has warned that if what they claim is the Church of England's liberal drift continues it is likely to face a similar split. The breakaway Church in the US began as traditionalist congregations invited bishops from outside the country to oversee them. It is a step English traditionalists have warned they might also be prepared to take.

Ahead of the group's UK launch, Dr Nazir-Ali told the Sunday Telegraph: "We want to uphold the traditional teaching of the Bible. WE BELIEVE THAT GOD HAS REVEALED HIS PURPOSE ABOUT HOW WE ARE MADE. PEOPLE WHO DEPART FROM THIS DON'T SHARE THE SAME FAITH. They are acting in a way that is not normative according to what God has revealed in the Bible. THE BIBLE'S TEACHING SHOWS THAT MARRIAGE IS BETWEEN A MAN AND A WOMAN. That is the way to express our sexual nature. WE WELCOME HOMOSEXUALS, WE DON'T WANT TO EXCLUDE PEOPLE, BUT WE WANT THEM TO REPENT AND BE CHANGED."

However, his suggestion goes directly against the rules of the Church of England and the Roman Catholic Church, which state that only the union of a man and a woman can be celebrated by a priest in church. IT COMES AS THE GOVERNMENT IS PUSHING THROUGH AN EQUALITY BILL THAT RELIGIOUS GROUPS FEAR WILL FORCE THEM TO GIVE JOBS TO HOMOSEXUAL YOUTH WORKERS OR SECRETARIES, EVEN IF THEIR FAITH MAINTAINS THAT SAME-SEX RELATIONSHIPS ARE SINFUL.

Mr Bryant, a former deputy leader of the Commons who is now a junior Foreign Office minister, trained as an Anglican priest and served as a curate before becoming the MP for the Rhondda. He was questioned by the magazine Time Out this week on whether he believed civil partnerships, introduced to England and Wales in 2005, should be scrapped in favour of same-sex marriage.

The minister replied: "All my friends who have entered into a civil partnership refer to it as their 'marriage' or their 'wedding' so the most important issue is that nobody should be discriminated against because of their sexuality. I would like to see churches be much more open to the idea of gay relationships or partnerships being celebrated in church."

Mike Judge, a spokesman for The Christian Institute, a campaign group, said: "Churches are open and welcoming to all people, but that is not the same thing as forcing churches to celebrate behaviour which conflicts with their religious ethos. It would be like forcing the Labour Party to celebrate a Conservative election victory. SURELY THE WORLD IS BIG ENOUGH TO ALLOW PEOPLE TO BE FREE TO DISAGREE."

But there is a positive effect to El Niño: It tends to reduce the number of hurricanes forming in the Atlantic Ocean. El Niños produce stronger vertical wind shear — the difference in wind speed and direction over a short distance — in the Atlantic, which inhibits the production of hurricanes. ON AVERAGE, HURRICANES IN THE US HAVE CAUSED ABOUT $800 MILLION IN DAMAGE ANNUALLY DURING EL NIÑO YEARS, half the damage caused during the reverse event, the La Niña.

But according to a study published in the July 3 Science, El Niño is changing — and that could mean more hurricanes for the already battered western Atlantic coast. Climatologists led by Peter Webster at Georgia Tech found that in some El Niño years, the ocean warming associated with the event is moving thousands of miles west, to the center of the Pacific Ocean. Called El Niño Modoki (after the Japanese term meaning "similar, but different"), the new El Niño seems to shift Atlantic cyclones to the west, resulting in more frequent storms and more hurricanes making landfall on the coast of the Gulf of Mexico and Central America.

Japanese and Korean researchers were the first to notice the El Niño Modoki phenomenon, before its possible effect on hurricanes really snapped into focus in 2004. That was an El Niño year, which led experts to predict a lighter than average Atlantic hurricane season. But it instead turned out to be an El Niño Modoki, and overall hurricane activity was two and a half times as severe as normal, with 15 named storms and six major hurricanes. Florida was repeatedly battered. "We had a lot more storms than we expected, and that got us thinking," says Webster.

Chris Bryant, another gay minister, said: "If gays vote Tory they will rue the day very soon." But the Tories accused Labour of "name calling" and said David Cameron did not believe in any form of discrimination. Being seen to be more "gay friendly" has been a key part of DAVID CAMERON'S MISSION TO DECONTAMINATE THE CONSERVATIVE PARTY BRAND AND MAKE IT MORE ACCEPTABLE TO YOUNG, SOCIALLY LIBERAL VOTERS.

There are currently two openly gay men on the Conservative front bench - Shadow Justice Secretary Nick Herbert and Shadow Commons leader Alan Duncan. In a symbolic gesture aimed at further healing relations with the gay community and burying the Tories' "nasty party" image, Mr Cameron this week apologised for Section 28 - the controversial law brought in by the Conservatives in 1988 banning local authorities from portraying homosexuality in a positive light.

Mr Cameron, the first Tory leader to speak at a gay pride event, said: "I am sorry for Section 28. We got it wrong. It was an emotional issue. I hope you can forgive us." Labour has also been pushing its gay credentials. THIS SATURDAY IN LONDON, SARAH BROWN WILL BECOME THE FIRST PRIME MINISTER'S WIFE TO TAKE PART IN A GAY PRIDE MARCH. She will be accompanied at the event by veteran gay rights campaigner Peter Tatchell.

A few years ago, continental Europe was busy trying to present itself as a convincing alternative to American neoconservatives and their power-hungry worldview. And, in doing so, "Old Europe" actually experienced a completely unexpected resurgance. In the minds of its inhabitants, the European Union was THE PERFECT ALTERNATIVE TO AN ENORMOUS UNITED STATES THAT WAS DRUNK ON POWER, savouring its "unipolar moment" and not giving a hoot about either its allies or enemies.

Now, there's actually going to be a Lisbon Treaty, a telephone number and a foreign minister to boot (provided that Ireland - which already rejected Lisbon once in a referendum last summer - the Czech Republic and Poland don't pull the plug at the last minute). But, as both those who support and oppose continued European integration will confirm, there's not going to be much more than that. And the reason for that can be found in Tuesday's decision by Germany's Federal Constitutional Court, based in the western city of Karlsruhe. Karlsruhe said "Enough!" and it drew a line in the sand separating Brussels' power from its own.

And it's right: The fact that it only takes 70,000 voters in Luxembourg to get a seat in the European Parliament, while it takes 800,000 German voters to do the same thing, is proof in itself that there is no equality when it comes to voting. Long-standing euro-skeptics like the British will say that, in doing so, Germany has finally made up its mind THAT EUROPE IS AN UNRULY, UNDEMOCRATIC MONSTER. Still others will say that this decision reflects the reality that Europe is not a truly united entity and that, as a result, IT HAS PUT THE KIBOSH ON THE ALTOGETHER TOO AMBITIOUS FANTASIES ABOUT A FUTURE "UNITED STATES OF EUROPE."

The tuna - stocks of which are in global decline - would be raised in farms to meet surging demand around the world for the traditional Japanese delicacy. A team from Japan's Fisheries Research Agency, The University of Tokyo and Kyushu University is close to completing the genome sequence of the bluefin tuna to unravel the secrets of the chemical building blocks of the fish and expects to be able to start a breeding programme next year.

We have already completed two computer sequencing runs and have around 60 per cent of the tuna genome," said Dr. Kazumasa Ikuta, director of research at the Yokohama-based Fisheries Research Agency. "We expect to have the entire sequence in the next couple of months. We plan to use the sequence to establish a breeding programme for bluefin tuna as most aquaculture farmers presently use wild juveniles," he said. "We want to establish a complete aquaculture system that will produce fish that have good strength, are resistant to disease, grow quickly and taste delicious."

Stocks of tuna have declined by as much as 90 per cent in some waters and the World Wildlife Fund has warned that the Atlantic bluefin will have been wiped out within three years unless radical measures are taken to protect stocks.

"You may have green shoots, whatever you want to call them, you may have temporary relief, BUT YOU ARE STILL IN A WORLD THAT'S BREAKING," Taleb said on "Squawk Box." Anything that's fragile like the financial system will eventually crash, he said. "We're in the middle of a crash," Taleb said. "So if I'm going to forecast something, it is that it's going to get worse, not better."

The government needs to deleverage debt and not try stimulus packages that will inflate assets, he said. "What makes me very pessimistic is not seeing any leadership or awareness on parts of government on what has to be done, which is deleverage $40-to-$70 trillion," Taleb said. "The monkey on our back is debt," he added.