GROUP of Seven (G7) finance ministers gave their blessings at the weekend to a new effort by bilateral and multilateral creditors to ease the debt burden of the poorest countries.

In lengthy talks, they carefully skirted the issue of gold sales by the International Monetary Fund (IMF), thus avoiding the threat of a deadlock between Germany on the one hand and the United States and Britain on the other.

In a prepared chairman's statement, US Treasury Secretary Mr Robert Rubin confirmed that official creditors in the Paris Club were now set to ago beyond the Naples terms in providing debt reduction of up to 80 per cent."

He said finance ministers of Britain, Canada, France, Germany, Italy, Japan and the United States were looking forward to formally endorsing the participation in the debt initiative of the International Monetary Fund (IMF) and the World Bank.

Mr Rubin said the formal go ahead would be given in the Interim Committee, and today in the Development Committee, the policy making bodies of the two Bretton Woods institutions.

German Finance Minister Mr Theo Waigel said there had been no discussion of gold sales in order to finance the participation of the International Monetary Fund (IMF) in the scheme.

The idea of IMF gold sales - strongly advocated by the US and Britain but firmly opposed by Germany - "played no role" in the talks, according to Mr Waigel.