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His proposal comes the day after The Independent revealed that the Environment minister, Phil Woolas, has held private talks with the biotechnology industry about relaxing Britain’s policy on the use of GM crops.

The Prime Minister also signalled that he is happy to see a public debate over whether GM crops should be grown commercially in Britain to reduce global prices by boosting production. His spokesman said last night: “His view is that we must be guided by the scientific evidence.”

Ministers who support GM crops believe there are no convincing arguments against them. They want to turn the tables on environmental groups who campaigned successfully against widespread GM production in Britain during the last government review in 2004. Although there is no ban, the ministers want the rules changed in light of the food crisis, as no GM crops are currently being grown commercially in this country.

At a two-day summit in Brussels which began last night, EU leaders were urged to “bite the bullet” and embrace GM products as a solution to rocketing food prices. The plea came from Jose Manuel Barroso, President of the European Commission. Several EU countries, led by France, are unconvinced that “Frankenstein foods” are safe.

At the meeting, Mr Brown suggested allowing more GM animal food into the EU. The move may raise safety fears because contaminated feed was blamed for the outbreak in Britain of BSE in the 1990s.

The Commission fears that Europe could run short of animal feed because of its strict licensing regime, which could further raise food prices. Europe is heavily dependent on imports as it does not have enough land to both farm animals and grow the feed they need. The other elements of the Brown plan are a global trade deal; further reform of the Common Agricultural Policy; a review of the role to be played by biofuels; and a plan to use aid for poor nations for new technology farm products.

The Independent revealed yesterday that ministers believe Britain’s cautious approach to GM should be relaxed because of current global food problems. But the Government’s rethink provoked a furious backlash from opponents of GM crops.

Tricia O’Rourke, a spokeswoman for Oxfam, said: “The present food crisis needs more than a technology fix. More focus is needed on sustainable technology that 400 million smallholders can use to improve their productivity.”

Caroline Lucas, a Green Party MEP, added: “There are no guarantees that GM crops are safe, sustainable or the solution to the problem of hunger. Over 70 per cent of citizens and several governments in the EU have expressed concerns over the negative effects that such crops may have on human health, biodiversity and the environment.”

Friends of the Earth accused ministers of falling for “hype” by GM firms. Its GM campaigner Clare Oxborrow said: “GM crops do not increase yields or tackle hunger and poverty.”

By wiping out corn and soybean crops across Iowa, Illinois and other states, the flood is driving up prices that were already at historic highs and increasing the cost of feed for cattle, hogs and poultry.

Economists say that will force livestock farms to cut back on production even more than they were, and that will eventually lead to higher prices for beef, pork, chicken, milk and eggs.

“I have no choice: going broke or increase prices,” said Heinz Kramer, who expects to have to charge more for the pork and beef that he processes at a family-owned company in La Porte City.

Pork prices could be up as much as 30 percent next year because of production cutbacks, said John Lawrence, an economist at Iowa State University. Prices of beef and poultry products are likely to be at least 10 percent higher by the end of this year, he said.

“The higher the corn prices go today the higher meat prices, milk and egg prices will go a year from now,” he said.

The Agriculture Department has said that food prices overall would rise by 4.5 percent to 5.5 percent that year, but those numbers are likely to be revised upward in July after analysts get a better idea of the impact on corn supplies.

The inflation estimate was made at a time when was selling for $6 a bushel, said USDA economist Ephraim Leibtag. Corn prices rose to $7.46 a bushel Wednesday on the Chicago Board of Trade.

Nearly half of 2007’s corn crop was used for livestock feed. Corn sweeteners and soybean oil are widely used as food ingredients, but they have a smaller impact on retail prices than feed costs have on livestock products.

Food prices are “absolutely a concern and something that we’re going to be paying close attention to,” said White House spokesman Tony Fratto. “It’s too early to say what the exact impact will be.”

Whatever it is, it is likely to be more significant in poor regions where corn and vegetable oil are staples. In some countries, people spend as much as 70 percent of their income on food. The United Nations has identified 22 countries that are especially vulnerable to rising prices because of hunger rates and dependence on imports.

The country’s intelligence bureau will be able to scan international calls, faxes and e-mails.

The measure was passed by a narrow majority after a heated debate in the Stockholm parliament.

Critics say it threatens civil liberties and represents Europe’s most far-reaching eavesdropping plan.

“By introducing these new measures, the Swedish government is following the examples set by governments ranging from China and Saudi Arabia to the US government’s highly criticised eavesdropping programme,” said Peter Fleischer, of Google.

Checks and balances

But those who support the plans say such measures are needed to protect national security from those increasingly using such technology to plan attacks.

The government insists that it will filter out domestic communication and monitor only international calls, faxes and messages.

Some experts insist that it is impossible to differentiate between domestic and international traffic.

Former Bear Stearns managers Ralph Cioffi Jr. and Matthew Tannin are charged in connection with allegations they misled investors as the two hedge funds they helped run collapsed amid the subprime mortgage meltdown.

The two are scheduled to be arraigned later Thursday in Brooklyn federal court, sources said.

“For the first time in my career, I saw concern about the location of one’s assets,” said Robert Balentine, the head of Wilmington Trust Corp.’s investment management group. “We’ve seen tangible evidence of very wealthy clients shifting assets out of brokerage firms in great numbers.”

Trust companies like Wilmington are benefiting from record subprime-infected losses at companies led by Zurich-based UBS AG, the world’s biggest money manager for the rich. UBS clients probably withdrew a net $39 billion during the past three months after the company reported more than $38 billion of writedowns and credit-market losses in the past year, London-based analysts at JPMorgan Chase & Co. estimate.

Clients may say “if UBS can’t manage its own capital, then what the hell are they going to do with mine?” said David Maude, a financial services consultant in Verona, Italy, who calls UBS the “Rolls Royce” of the industry. “It does tarnish their reputation, certainly.”

UBS contacted 2.5 million Swiss consumer and wealth- management customers last month after losing 11.5 billion francs ($10.9 billion) in the first quarter and seeing a net withdrawal of 12.8 billion francs in its asset and wealth-management units.

The company has responded with “proactive, ongoing communication” with clients, said Jim Pierce, co-head of UBS’s U.S. Wealth Management Advisory Group, in an e-mailed response to questions. UBS is “willing to have the difficult conversations,” Pierce said.

U.S. Market

“UBS is fully committed to the U.S. market,” Pierce said. “Approximately 30 percent of the world’s wealth is located in the U.S., therefore as a global wealth manager, the U.S. is of great importance to UBS.”

Wilmington Trust was founded in 1903 to oversee the fortune of the DuPont family. Trusts, unlike brokerages, have fiduciary obligations to their clients.

The Wilmington, Delaware-based firm had about 80 advisers in its family office practice at the end of last year, up from 45 in 2006, who concentrate on clients with at least $10 million of assets. The company’s wealth advisory and planning services unit reported a 14 percent increase in revenue in 2007.

Robert Gates, US defence secretary, recently fired both the US Air Force chief of staff and air force secretary after an investigation blamed the air force for the inadvertent shipment of nuclear missile nose cones to Taiwan.

According to previously undisclosed details obtained by the FT, the investigation also concluded that the air force could not account for many sensitive components previously included in its nuclear inventory.

One official said the number of missing components was more than a thousand.

The disclosure is the latest embarrassing episode for the air force, which last year had to explain how a bomber mistakenly carried six nuclear missiles across the US. The incidents have raised concerns about US nuclear safeguards as Washington presses other countries to bolster counter-proliferation measures.

In announcing the departure of the top air force officials earlier this month, Mr Gates said Admiral Kirkland Donald, the naval officer who led the investigation, concluded that both incidents had a “common origin” which was “the gradual erosion of nuclear standards and a lack of effective oversight by air force leadership”.

Mr Gates added that the Pentagon was evaluating the results of a “comprehensive inventory of all nuclear and nuclear-related materials [conducted] to re-establish positive control of these sensitive, classified components”.

Adm Donald briefed Congress on the results of his investigation on Wednesday. Bryan Whitman, Pentagon spokesman, declined to comment on the classified report.

A senior defence official said the report had “identified issues about record keeping” for sensitive nuclear missile components. But he stressed that there was no suggestion that components had ended up in the hands of countries that should not have received them.

But Daryl Kimball, executive director of the Arms Control Association in Washington, said the revelation was “very significant and extremely troubling” because it meant the US could not establish the positive control referred to by Mr Gates.

“It raises a serious question about where else these unaccounted for warhead related parts may have gone,” said Mr Kimball. “I would be surprised if the recent Taiwan incident is not the only one.”

A senior military officer said the military leadership, including Admiral Mike Mullen, the chairman of the joint chiefs, was “deeply troubled” by the findings of the so-called Donald report. He added that they would be paying close attention to recommendations for improving nuclear safeguards that Mr Gates has asked James Schlesinger, a former defence secretary, to make.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

The outlook is bad news for American motorists already suffering sticker shock at the gas pumps at the start of the summer driving season.

“If we have prolonged rail and barge delays of getting Midwest ethanol to all the coast, then it will have an absolute upward impact on prices right now,” said Stephen Schork, editor of The Schork Report in Philadelphia. “I could probably see it adding another nickel to another dime to the prices at the pump as we head toward the July 4th holiday.”

The cost of corn-based ethanol, a blendstock that now makes up about 7 percent of the U.S. gasoline pool, has jumped 20 percent in two weeks as flooding damages Midwest corn crops, shuts down distilleries and disrupts rail traffic to get the ethanol to market.

Agriculture officials and traders said the damage could push up worldwide corn and soyabean prices, which have spiralled in recent days as floods have swamped crops in parts of Iowa, the US’s biggest corn-producing state.

The warning comes at a time when high food prices are already sparking protests across the developing world.

Corn futures in Chicago this week rose to record highs of more than $8 a bushel on fears that up to 5m acres of the crop could be lost, while soyabean prices hit a record of $15.93 a bushel.

Tom Jennings, acting director of the Illinois Department of Agriculture, said: “The price of corn and the price of beans could rise more. If we lose a lot of corn the prices will continue to go up.”

The increase in the cost of corn and soyabeans – the two main feed crops for farm animals such as cows and chickens – increased the price of live cattle yesterday for the second day in a row, to the highest level in 22 years.

Mr Jennings said that the impact of the heavy rains was “dramatic”.

“According to the emergency reports I’m getting, we’re above what happened in 1993 but we’ll have to see how that tapers off as [the rain water] comes down the river,” he told the Financial Times.

The Mississippi River broke through its levee system in 1993, destroying about 1m acres of crops and causing $20bn of damage.

Lewis Hagedorn, of JPMorgan in Chicago, said that the losses were significant.

“The risk of still-higher agricultural prices remains decisively distributed to the upside amid the fundamental need to ration demand in light of smaller supply,” he said.

Greg Wagner, at Ag Resource in Chicago, added that corn prices could take a pause to assess the weather impact. However, he warned: “Additional price gains are likely as the market is prone to overshoot.”

After weeks of heavy rains and low temperatures, the US Department of Agriculture said that only 57 per cent of the country’s corn crop is in good or excellent condition, considerably less than the 70 per cent registered this time last year.

Local farmers in Illinois said that the bad weather had delayed planting by up to five weeks, which would result in a much reduced crop of corn and soyabeans. Some farmers expected their corn production to be down by as much as 50 per cent from last year’s level.

Agriculture traders described the problem graphically, saying that corn plants in Iowa or Illinois should now be reaching almost waist height, but due to the impact of the heavy rains and low temperatures were below knee-height.