After months in which creditor nations had looked set to miss their self-appointed target of easing the plight of 20 countries by the end of the year, 11th-hour talks in Washington resulted in a deal which the bank and the fund said would slash $34bn (about £23bn) from the debt burden of the countries involved, 18 of them in Africa. Debts outstanding to the UK which will be written off total £650m.

James Wolfensohn, the president of the World Bank, and Horst Köhler, managing director of the IMF, said they had delivered on the pledge made at the G7 summit in Okinawa in July to grant debt relief by the end of the year.

The announcement came less than 10 days before the formal winding up of the Jubilee 2000 campaign, which was set up in 1996 with the aim of persuading rich creditor nations and the international organisations to write off the debts of poor nations.

Ann Pettifor, director of Jubilee 2000, said: "The debt relief scheme is beginning to move but debt payments will still be too high. Unless the G7 rewrite the rules there is no chance of this scheme providing an end to the debt crisis for the poorest countries."

Although Jubilee 2000 will come to an end on December 31, the campaign will continue under a new name, Drop the Debt. Campaigners said they wanted deeper relief for those countries already helped, a widening of the scheme for those nations left without assistance, and reforms of the international system to ensure no repetition of the debt crisis.

Mr Wolfensohn and Mr Köhler pledged that the bank and fund would continue working to bring debt relief to countries that have yet to qualify for hel p under the heavily indebted poor country initiative. There were 41 poor countries originally designated as in need of relief, but Mr Wolfensohn and Mr Köhler said that in many cases countries had to put an end to civil wars or external conflicts before they could be helped.

They also stressed that the next stage for those countries given financial assistance was to channel the money into anti-poverty programmes. "To ensure that the relief is translated into poverty reduction, the beneficiary countries must continue with their economic, social and governance reforms, and will need to design and implement nationally owned poverty reduction strategies," they said.

"But the international community must play its full part to improve the lot of poor countries, for there cannot be a good future for the rich nations if the poor nations do not share prosperity.

"More broadly, we call upon industrial countries to raise their official development assistance towards internationally agreed levels. And we urge them to open their markets to the exports of the poor countries, giving them a better chance to succeed on their own."

Britain, which has been at the forefront of attempts to secure a more generous deal for poor countries, welcomed the news. A joint statement from the chancellor, Gordon Brown, and the international development secretary, Clare Short, said that the international community had exceeded its target. "On average these countries' debts will be reduced by two thirds.

"More importantly, this action has enabled us to take forward our efforts to tackle the extreme poverty which affects the lives of so many millions of people in these countries. We must create a virtuous circle of debt relief, poverty reduction and economic growth."

• The 22 countries are : Benin, Bolivia, Burkina Faso, Cameroon, Gambia, Guinea, Guinea-Bissau, Guyana, Honduras, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Tanzania, Uganda and Zambia.

© Guardian Newspapers Limited 2000

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