Speaking ahead of next month’s G-8 summit in Scotland, Chancellor of the Exchequer Gordon Brown proposed a matching of relief on bilateral, country-to-country debts to relief on debt owed to the World Bank, International Monetary Fund and African Development Bank.

The savings for poor countries, most of them in Africa, would go towards free elementary and high school education for many of the 100 million children who now cannot afford schooling, the British finance minister told reporters in Edinburgh.

Without such multilateral relief, he said, the world’s poorest nations could find themselves struggling to pay up to 15 billion dollars (12.2 billion euros) in principal and interest payments to international institutions by 2015.

His bold proposal was part of a bundle of ideas — dubbed a "modern Marshall plan for Africa” — that is to be put to G8 leaders when they gather on July 6-8 at the posh Gleneagles golf resort.

Other steps would see an international facility to pay for vaccinations in poor countries, a doubling of development aid, and an end to trade-distorting farm subsidies in the rich world.

If adopted, Brown said, the world would be well on its way to meeting the United Nations Millennium Development Goals.

“The scale of what we are outlining is substantial,” declared the chancellor, who has made the fight against African poverty a personal crusade. “This is not a time for timidity, nor a time to fear reaching too high.”

British Prime Minister Tony Blair is determined to see the Gleneagles summit tackle Africa and climate change, amidst concern that US President George W. Bush is not keen to sign up to any bold initiatives.

Blair travels to Washington on Monday for talks with Bush paving the way to the summit, which will be preceded July 2 by a Make Poverty History rally in Edinburgh and like-themed “Live8” rock concerts in London and four other G8 cities.

Brown’s other proposals — which he also intends to put to EU finance ministers in Brussels next Tuesday and Group of Seven (the G8 minus Russia) finance ministers in London three days later — include:

 — An international finance facility to raise four billion dollars by 2015 to cover the cost of mass vaccinations, potentially saving five million lives in poor countries over the next decade.

 — A “large increase” in direct development assistance from rich countries, with the European Union — the world’s biggest aid donor — doubling its aid spending by 2010 to more than 80 billion dollars.

 — A decisive end to trade-distorting farm subsidies as part of ”an ambitious, pro-poor outcome” to the Doha development round when the World Trade Organisation (WTO) gathers in Hong Kong in December.

Brown said it was high time “to commit to wiping out debt repayments” which now cost poor countries up to two billion dollars a year — money that could otherwise go towards schooling and health care.

“Our proposal is that the debt relief of as much as 100 per cent on bilateral debts owed by the poorest countries is now matched by as much as 100 per cent relief on multilateral debts owed by the poorest countries,” he said.

“We believe there can be a direct benefit from debt relief to poverty reduction,” he continued.

“The United Kingdom believes arrangements can be reached with the poorest countries so that, with savings from debt relief, they will fund free primary education and free secondary education.”

Asked if the Bush administration might stymie his proposals, Brown replied that he believed the United States was ready to support the idea for 100 per cent debt relief. “What we now have to work out is the mechanics and I believe we will see progress in the next few days on exactly that agenda,” he said. The G8 comprises Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.