Senior global policymakers have raised projections for the size of subprime-related credit losses in a move that implies financial institutions will have to increase write-offs.

After a meeting of Group of Seven finance leaders in Tokyo, Peer Steinbrück, German finance minister, said the G7 now feared that write-offs of losses on securities linked to US subprime mortgages could reach $400 billion (€275.58 billion).

This is sharply higher than the $120 billion credit losses that Wall Street banks and other institutions have revealed in recent weeks - and also far bigger than the US Federal Reserve's estimates for subprime losses last year of $100 billion to $150 billion.

But finance ministers in the G7 - which consists of the US, Britain, Canada, Italy, France, Germany and Japan - admitted that it remained unclear where much of this subprime pain would eventually emerge, not least because the path of the credit crunch was still uncertain.

Mr Steinbrück and other ministers appealed to financial institutions to provide "prompt and full disclosure" of losses, to restore confidence.

"The next 10 days to two weeks will be crucial because we are going to have the first audited accounts [ from financial institutions] since the crisis started," added Mario Draghi, Bank of Italy governor.

He did not rule out the possibility that governments might eventually need to inject capital into banks but stressed that market solutions should take precedence. The comments followed a weekend of talks dominated by the credit turmoil at which finance ministers said they stood braced for individual and collective action to ensure financial stability and avoid recession.

They conceded that growth was likely to slow in all their economies, since the world was facing what Hank Paulson, US treasury secretary, called a "challenging and uncertain environment".

Mr Paulson said he was not disappointed that Japan and European countries had rejected the idea, floated by the IMF, for joint efforts to stimulate their economies by fiscal packages. He implied other countries would not escape a US downturn, describing decoupling as a "myth".