Debt cancellation as a solution to the economic crisis in many developing countries had been rejected by the Minister for Finance, Mr McCreevy, the Debt and Development Coalition group claimed yesterday.

The group met Mr McCreevy yesterday in advance of his address to the International Monetary Fund and World Bank annual general meeting next month.

Mr Michael O'Brien, a director of the group, said concerns had been expressed that "resources for education and health services have been diverted to meet debt repayments, undermining the development process in many of the world's poorest countries".

The Department of Finance said the Minister intended to make a statement on his policy towards Third World debt "following discussion at Government". The Department said a debt relief package with "a set of new principles" would underline the State's future policy on Third World debt. "The debt relief package will represent the first serious attempt by an Irish Government to make a meaningful contribution to resolving the Third World debt problem," the Department stated.