His warning came as the leaders of the world's most powerful economies last night struggled to bridge divisions over the summit's priorities amid violent anti-capitalist demonstrations in London. Protesters besieged the Bank of England and smashed their way into a Royal Bank of Scotland branch, sparking clashes with riot police. One man died after apparently collapsing, police said last night.

On the eve of the summit called to agree a "global plan for recovery and reform", Dominique Strauss-Kahn, IMF managing director, told the Financial Times the fund's experience from 122 banking crises suggested "that you never recover before the cleaning up of the banking sector has been done. The US . . . is rightly insisting on stimulus and the EU rightly insisting on regulation. They are not yet moving quickly enough in doing the cleaning up of the financial system."