• Association of British Insurers attacks bonus levels
• Bob Diamond stresses need to 'celebrate rewards for success'
• Annual bonuses for top executives down 48% on 2010
• Profits fall 3% to £5.9bn; return on equity down to 6.6%

Barclays bank is on a collision course with its shareholders despite insisting it has taken strong steps to show pay restraint at its Barclays Capital investment bank.

As the bank reported a 3% fall in profits to £5.9bn, major shareholders were considering whether to summon the bank's top executives, led by Bob Diamond, to explain the scale of the payouts at BarCap – where the average pay of the 24,000 bankers was some £200,000. The shareholders may even vote against the remuneration report, or even some directors, at the annual general meeting in April.

In the face of political pressure on bonuses following the furore surrounding the near-£1m bonus for the Royal Bank of Scotland's chief executive, Stephen Hester, Diamond said it was important to "celebrate rewards for success or then we won't have an economy".

"We need to be comfortable in this country talking about growth, growth, growth. Business, business, business. Jobs, jobs, jobs. Economy, economy, economy. And I think if we don't recognise the need to shift the mantle of growth from the public sector to the private sector, if we don't recognise that every time a leader talks about eradicating reward for failure they also talk about celebrating reward for success, then we won't have an economy," he said.

The size of Diamond's bonus will not be revealed until next month when the bank's annual report is published. However, a claim by the bank that the average pay of the top eight highest-paid bankers and the executive team was down 48% led to speculation that the chief executive's payout was between £900,000 and £3m.

Ahead of the bank reporting season, which kicked off with Barclays on Friday, one shareholder body, the Association of British Insurers, had written to banks to urge pay restraint – and held meetings with bank bosses themselves.

After learning that as a percentage of BarCap's profits, the bonus pool was 35% (against 36% a year ago), Robert Talbut, chairman of the ABI's investment committee, said on Friday there had been no step change at Barclays: "Whilst overall bonus levels at Barclays have been reduced, for Barclays Capital this reduction is only in line with the fall in profit before tax.

"This appears to be very close to business as usual. It is not the signal of the change required in order to improve the investment case."

Diamond had tried to head off a row with shareholders by capping cash bonuses at £65,000 even though he admitted the returns to shareholders were "unacceptable". Targets he set only last year – to produce a return on equity (a crucial measure of performance used by shareholders) of 13% by 2013 – are now likely to be missed as the bank's returns were just 6.6% in 2011, down on 2010's 6.8%.

Diamond shrugged off the ABI's unexpected criticism, saying: "We stay close with our shareholders and they are very supportive."

Providing more detail about bonuses than usual, the bank said the average bonus across the bank was down 21% year on year to £15,200, while the average bonus at BarCap was down 30% to £64,000 – just below the cap. Last year the average bonus was £91,000. In 2010 Barclays doubled the base salaries of its investment banking staff to combat restrictions on bonuses.

But the shareholder advisory group Pirc questioned whether the bank's assertion that it intended to pay out £2bn in deferred bonuses in the future was allowing the bank to flatter its performance.

Unions were also unimpressed. The TUC general secretary, Brendan Barber – who wants bonuses taxed – said that the payouts proved that "City bonuses have nothing to do with rewards for success".

Diamond again stressed the bank's commitment to "citizenship" and repeatedly refused to disclose whether he had been offered a bonus, what the size of it might be and whether he intended to take it. The chairman, Marcus Agius, also refused to disclose the size of the payouts. The bank also admitted it paid only "a relatively small amount" of UK corporation tax.

While the bank stressed that in 2011 bonuses were down 26% across the group and down 35% at BarCap compared with 2010, the proportion of revenue used to pay BarCap's staff actually rose to 47% from 43% a year ago. Revenue inside BarCap – which Diamond used to run until being elevated to chief executive a year ago – was down 22% and profits in that operation down 32%.

"Very weak BarCap revenues do most of the damage today," said Ian Gordon, banks analyst at Investec. On a volatile day, the shares closed at 234p, up just 1p.

The bonus pool in BarCap was down 32% to £1.5bn – but the World Development Movement noted this would pay for school meals for two years for the "23 million primary-age children who attend school hungry across Africa". About 20% of the profits generated by the bank – £1.3bn – were generated in Africa.

The total bonus pool for the bank's 141,000 staff was down 25% to £2.1bn - more than twice the £700m being used to pay a 6p dividend to shareholders.

Cash bonuses at the bailed-out banks Royal Bank of Scotland and Lloyds Banking Group, where neither boss is taking a bonus, are subjected to a £2,000 cap.

Diamond said the mood towards the bank ing industry was "not a positive" but said, of the move to cut bonuses, that "we need to balance remaining competitive with being responsive to the public mood."

BarCap, despite the 32% fall in profits, was still the biggest single contributor to profits at £2.9bn, while profits were dented by a £1.7bn impairment in the bank's stake in BlackRock, which bought the Barclays Global Investors fund management business in 2009, and a £427m goodwill impairment in Spain and restructuring charges there of £189m.

Deputy editor, chief correspondent and picture editor among five Sun newspaper staff and three others arrested

The Sun has been plunged into crisis following the arrest of five of its most senior journalists, including the deputy editor, over allegations of inappropriate payments to police and public officials.

The five Sun journalists are understood to be: deputy editor Geoff Webster, picture editor John Edwards, chief reporter John Kay, chief foreign correspondent Nick Parker and reporter John Sturgis.

A News International source said that the Sun editor, Dominic Mohan, was "not resigning" but added that it was "obviously a dramatic day for him".

A Surrey police officer, 39, a Ministry of Defence employee, 39, and a member of the armed forces, 36, were also arrested at their homes on Saturday on suspicion of corruption, misconduct in a public office and conspiracy in relation to both.

The new arrests at Britain's bestselling newspaper will further rock News International, which is still reeling from the closure of the Sun's sister title, the News of the World last year, after it emerged that journalists had hacked the phone of murdered schoolgirl Milly Dowler.

The journalists, aged between 45 and 68, were arrested at addresses in London, Kent and Essex on suspicion of corruption, aiding and abetting misconduct in a public office, and conspiracy in relation to both these offences. They are being questioned at police stations in London and Kent.

News Corporation, the parent company of News International which owns the Sun and the Times, confirmed that five employees of the Sun were among those arrested today.

It said its Management and Standards Committee (MSC) had provided information to the Elveden investigation which led to the arrests and had also provided the option of "immediate legal representation" to those arrested.

"News Corporation remains committed to ensuring that unacceptable news-gathering practices by individuals in the past will not be repeated and last summer authorised the MSC to co-operate with the relevant authorities," it said.

"The MSC will continue to ensure that all appropriate steps are taken to protect legitimate journalistic privilege and sources, private or personal information and legal privilege.

"News Corporation maintains its total support to the ongoing work of the MSC and is committed to making certain that legitimate journalism is vigorously pursued in both the public interest and in full compliance with the law."

The arrests come two weeks after four former and current Sun journalists and a serving Metropolitan police officer were arrested over alleged illegal police payments.

Senior Sun employees Chris Pharo, 42, and Mike Sullivan, along with former executives Fergus Shanahan, 57, and Graham Dudman, were named by sources as suspects facing corruption allegations. All five were released on bail.

Surrey police confirmed a serving officer was arrested at the officer's home address on Saturday as part of Operation Elveden.

A spokesman said: "Surrey police has been working closely with Operation Elveden since it was established in 2011, with a number of its officers seconded to the MPS to assist with the investigations.

"On learning about the involvement of one of its officers, the force immediately referred the matter to the Independent Police Complaints Commission (IPCC)."

Assistant Chief Constable Jerry Kirkby said: "The force takes matters of this nature extremely seriously and we will not hesitate to respond robustly to allegations where there is evidence to support them."

The MoD refused to comment.

Officers from Operation Elveden made the arrests between 6am and 8am as part of the investigation into allegations of inappropriate payments to police and public officials.

Operation Elveden, which runs alongside the Met's Operation Weeting team, was launched as the phone-hacking scandal erupted last July with allegations about the now-defunct News of the World targeting Milly Dowler's mobile phone.

All home addresses of all eight detained men are being searched and officers are also carrying out searches at the offices of News International in Wapping, east London, the Metropolitan police said. "

• Finance minister says Greece must decide by Sunday
• Street violence returns as ministers call bailout terms 'extortion'
• Merkel warns of default's 'uncontrollable consequences'

Greece is facing an acute political and social crisis this weekend as the bankrupt state prepares to decide whether it can stay in the single currency.

As riot police clashed with protesters on the streets of Athens, and five ministers resigned in protest at the scale of the spending cuts demanded in return for a new €130bn (£108bn) bailout, Evangelos Venizelos, the Greek finance minister and socialist leader, said the country had until Sunday to choose whether to swallow the eurozone medicine of more cuts – or default on its debt next month and be forced out of the euro.

In an emotional speech he said: "The choice we face is one of sacrifice or even greater sacrifice – on a scale that cannot be compared. Our country, our homeland, our society has to think and make a definitive, strategic decision. If we see the salvation and future of the country in the euro area, in Europe, we have to do whatever we have to do to get the programme approved."

Police ringed the Greek parliament building following the failure of eurozone finance ministers to approve the new bailout for Greece. Prime minister Lucas Papademos had offered new austerity measures worth €3.3bn to secure the euro lifeline, but he was told the cash would not be forthcoming until savings of an additional €325m were identified. He was told to get the €3.3bn programme endorsed and come up with a plan for the new cuts – to plug a gap in this year's budget – by Sunday.

George Karatzaferis, a Greek coalition leader, spoke of national humiliation and said he would not accept the new cuts, adding that Greece was labouring "under the German boot".

The scenes of violence in Athens shattered the mood of calm that has characterised the financial markets this year. The French and German stock markets closed down around 1.5%.

The anger from the extreme right in Greece was echoed on the left where a resigning socialist minister accused the eurozone of "extortion" in its policies towards Athens.

In Germany, Angela Merkel was reported to have warned her centre-right MPs of "uncontrollable consequences" for the eurozone should Greece become the first euro nation to declare sovereign default on its soaring debt. Her finance minister, Wolfgang Schäuble, told the same MPs, according to reports in Berlin, that Athens' latest pledges over spending cuts fell well short of what was needed.

EU ministers demanded that the three party leaders of the caretaker coalition under Papademos deliver signed pledges on the programme, making them binding and irreversible regardless of who wins an early general election expected in April.

"This certainly violates the sovereignty of the country and doesn't allow democratic choices to work," a government minister from a southern eurozone country told the Guardian. "But it's tough when you need the money."

Papademos told the cabinet, which endorsed the loan agreement tonight, the country had no choice – "our priority is to do whatever it takes to approve the new economic programme". Anyone who disagreed would have to leave the government.

The aim of the second Greek bailout in two years is to cut the country's debt from 160% of gross domestic product now to 120% by 2020. Ostensibly this is to be achieved by €130bn from the eurozone and the IMF, combined with swingeing spending cuts and tax rises and a write-down of debt by the country's private creditors through a debt swap pact halving the burden from €200bn to €100bn. But the €130bn is no longer viewed as sufficient and Schäuble was said to have told MPs that under Greek pledges the debt level would still be between 128% and 136% of GDP by 2020.

Separately, in an embarrassing admission captured on camera during a meeting in Brussels, Schäuble assured the Portuguese finance minister he would be prepared to adjust the terms of Portugal's €78bn bailout programme once the Greek situation was resolved – remarks viewed as incendiary given the tough line taken with Athens. "If there appears a necessity for an adjustment in the Portuguese programme we would be ready to do that," Schäuble said. Portugal's Vitor Gaspal replied: "That's much appreciated."

The eurozone's finance ministers are to meet again in Brussels on Wednesday to sign off on the bailout terms and the debt swap pact on condition that Athens has met the stringent conditions.

Karatzaferis, leader of the extreme right Laos party in the three-party coalition, said he would vote against the austerity package and was willing to quit the coalition in protest. "Greece can't and shouldn't do without the European Union, but it could do without the German boot," he said. "What has particularly bothered me is the humiliation of the country."

The other two coalition partners, the Pasok socialists and the conservative New Democracy, have a sweeping parliamentary majority and do not need Karatzaferis's 16 votes. The Pasok deputy labour minister, Yannis Koutsoukos, who resigned in protest on Thursday, accused the "troika" – officials from the European commission, ECB and IMF – of behaving "in an extortionate manner that is completely improper and shameless".

Without the new bailout, Greece will be unable to redeem more than €14bn of debt on 20 March, leaving the country in sovereign default and ushering in an even bigger crisis in the eurozone's distressed periphery.

No 10 attacks Tory blog critical of reforms and claims there is little serious dissent towards Andrew Lansley's health bill

David Cameron is said to be willing to endure three final months of political controversy to push the health bill through parliament, but is convinced there is no serious dissent in his cabinet, parliamentary party or in the country at large.

No 10 argues that if the coalition did suddenly drop the bill, as some ministers are privately suggesting, the Conservatives would still be unable to avoid the political blame for closures and job losses likely to happen anyway due to long-term financial pressures on the NHS.

Government sources turned their fire on Tim Montgomerie, editor of the influential Conservative Home website, who, citing the support of three cabinet ministers, wrote an editorial arguing the NHS bill was "potentially fatal to the Conservative party's electoral prospects" and "must be stopped before it's too late".

Montgomerie claimed he had been virtually instructed to write the opinion piece by Conservative cabinet members likening the NHS bill to the poll tax. He declined to identify the three cabinet members concerned.

Andrew Lansley, the health secretary, retains the confidence of the prime minister and insisted he was not going to resign to get the bill through parliament. "It is not about me," he said.

One government source was scathing, referring to Montgomerie's links to Iain Duncan Smith, the work and pensions secretary and former leader of the Tory party: "Tim's sole achievement in politics was to be chief of staff to the most unpopular leader in Conservative history, so forgive us if we don't take any lessons from him. He clearly wants to take the party back to the bad old days of constant infighting and no policy.

""

No 10 was more restrained, but strongly denied any cabinet ministers have complained directly to Cameron, or that the parliamentary party is in a state of revolt. One senior figure in the 1922 committee admitted the politics of the bill were dire, but said it would be worse to backtrack.

It was also stressed that the chancellor, George Osborne, was fully behind the reforms, and Liberal Democrat peers will ensure the bill reaches the statute book over the next two to three months. By the time of the next election much of the shroud-waving about the bill will have been exposed as false, No 10 expects.

No 10 recognises that collectively the government lost some health professionals over the past few months, but dismisses opposition to the bill as intellectually inchoate. It also feels that if Labour attacks the bill on grounds that the bill extends choice or competition, Labour will be on the wrong side of the argument.

Ministers are sanguine, expecting the controversy to die down once the bill becomes law, even if they are concerned at the way in which the rightwing commentariat has lined up against the bill.

Labour believes the next 72 hours could be critical to the bill's fate. The party's leader, Ed Miliband, took the unusual step of writing to all peers to reiterate a Labour offer "to put party differences aside and work with the government on reform objectives we all share, such as greater clinical involvement in commissioning and the funding of social care".

In a riposte on Conservative Home, the Tory co-chairman Lady Warsi claimed the bill represented "the most radical decentralisation of power that the NHS has witnessed in its history. As Conservatives it is our duty to support it. It passes power to patients. It gives control over the NHS budget to doctors and nurses, and gives greater freedoms to hospitals. It cuts out £4.5bn of bureaucracy. It is in every way a bill that hands power to the frontline."

In a bizarre twist, the Liberal Democrats, who have been wracked with internal divisions over the bill, called on their coalition partners to get a grip.

The Lib Dems were pointing to the way in which Baroness Williams on BBC1's Question Time on Thursday night had staunchly defended the revised bill.

But in a sign that Tory dissent is already stirring up Lib Dems, two left-leaning liberal groups, the Social Liberal Forum and Liberal Left, released separate statements calling for the controversial aspects of the bill to be dropped.

The SLF said: "Where the reforms underway enhance the social liberal aspects of the healthcare system, they should be completed with little further disruption, agreement across parliament and in concert with the medical profession.

"The rest of the bill should be abandoned in the interests of preserving a locally accountable, co-ordinated, comprehensive and co-operative [NHS]."

Liberal Left, in a letter to Clegg, argued that "the bitterness in the party, amongst professionals, and most importantly in the country, should now lead the government to cut their losses – show a little leadership and admit they got it wrong".

Dr Clare Gerada, chair of the Royal College of GPs, said she was consulting fellow health professionals of all sorts, including nurses and NHS managers, about a possible "plan B" to replace the bill.

"Andrew Lansley means well, but his are the wrong reforms. What he's done is galvanise people to talk about what's best for the NHS. There should now be an agreed 'plan B' as an alternative to the bill which would make the NHS safe in the first instance and then take it forward in the longer term," Gerada said.

The Department of Health is bracing itself for a potential second defeat on the bill in the Lords on Monday.

Government sources say that peers may well succeed in voting through an amendment which would put the NHS under a new legal "duty of candour" to admit when blunders are made that harm patients, and explain what happened.

The Royal College of Surgeons of England, which two weeks ago wrecked what would otherwise have been a united front against the bill by all of the royal colleges of medicine and associated faculties, is under pressure to adopt a more hardline stance against the bill.

Row escalates as Argentinian foreign minister lodges formal protest with UN, but Britain insists militarising claim is 'absurd'

Argentina has accused Britain of deploying nuclear weapons near the Falkland Islands and "militarising" the south Atlantic.

The Argentinian foreign minister, Héctor Timerman, lodged a formal protest at the United Nations on Friday and showed slides of British military bases in the region, saying they represented a threat to all south America.

He said Buenos Aires had intelligence that a Vanguard submarine was operating in the area. "Thus far the UK refuses to say whether it is true or not," he told a press conference in New York. "Are there nuclear weapons or are there not? The information Argentina has is that there are these nuclear weapons." Quoting John Lennon, he added: "Give peace a chance."

Britain's ambassador to the UN, Mark Lyall Grant, said London did not comment on the disposition of nuclear weapons or submarines but that it was "manifestly absurd" to say it was militarising the region. Britain's defence posture remained unchanged, he said.

The Daily Mail reported this week that Britain had deployed a Trafalgar-class nuclear-powered submarine armed only with conventional weapons.

Timerman said such a nuclear-armed submarine would violate the Treaty of Tlatelolco for the Prohibition of Nuclear Weapons in Latin America and the Caribbean.

After receiving Timerman's protest the UN secretary general, Ban Ki-moon, issued a statement expressing "concern" about the escalating row and reportedly offered to mediate.

Argentina's president, Cristina Fernández de Kirchner, said Britain's dispatch of a modern destroyer, HMS Dauntless, to replace an older vessel, as well as Prince William, in his role as a search and rescue helicopter pilot, were provocations and presented a "grave risk for international security". Britain said the deployments were routine.

Argentina claims Britain stole the islands, situated 300 miles off the coast of Patagonia, in 1833. Argentina calls the archipelago Las Malvinas.

On Thursday, David Cameron reiterated British sovereignty, saying: "As long as the people of the Falkland Islands want to maintain that status, we will make sure they do and we will defend the Falkland Islands properly to make sure that's the case."

Tensions between the two countries have surged in the run-up to the 30th anniversary of the Falklands war.

Relations thawed in the 1990s but cooled again in 2010 when British firms started drilling for oil, triggering a diplomatic and commercial squeeze by Argentina's president. She recently convinced much of Latin America to ban ships flying the Falkland Islands flag from their ports.

The islands have since experienced shortages of fresh fruit, notably bananas, but otherwise claim to be unaffected. However, they fear Argentina will close its airspace to a weekly commercial flight between Chile and the islands, their main link to south America and the world.

Up to 200,000 low-income families will lose out from little-noticed change, says shadow chief secretary to the Treasury

Up to 200,000 families could lose £4,000 a year because of a little-noticed change to the working tax credit coming into force in April, Rachel Reeves, the shadow chief secretary to the Treasury, will say in a speech on Saturday.

She will condemn the change, which will affect low-income families whose parents work between 16 and 24 hours a week, as a "deeply unfair change" that will penalise people unable to persuade their employer to let them work longer.

The change was originally announced in October 2010, but Labour believes that many people affected by the cut, which will save the Treasury £500m a year, have not yet grasped its implications.

Currently people on a low income can get working tax credits if they have at least one child and they are working at least 16 hours a week. But from April the rules for couples will change, and one partner will have to work 24 hours a week, or both partners will have to work a total of 24 hours between them, for them to continue to qualify.

There are 212,000 families where parents work between 16 and 24 hours a week. They earn less than around £17,000 a year. According to Labour, if they do not increase their hours, they will lose £3,870 a year in tax credits.

"In this climate, very few people in part-time work will find be able to increase their hours by up to 50% at the moment," Reeves will tell members of Usdaw, the shopworkers union, in a speech at their conference. "And for a couple with children losing around £4,000 a year, or £75 a week, from this change could mean going out to work makes no sense."

The Treasury has not disputed Labour's figures, although it does not accept that the change has in any way been hidden. It was announced by George Osborne, the chancellor, as part of the spending review.

A Treasury spokesman said Labour's figures ignored some of the other government measures being introduced to help working families.

"The chancellor has confirmed that working age benefits will go up by 5.2% in April and the child element of the child tax credit will increase by inflation from April – which could mean up to £135 extra per child. We also know that families are worried about the cost of living and so we've cut fuel duty and frozen council tax. Families will also benefit from the increases in the personal tax allowance," the spokesman said.

The spokesman also stressed that the government had to save money. "Ultimately there is nothing fair about running huge budget deficits and burdening future generations with debts we cannot afford to pay," he said.

"If the deficit is not tackled now, the impact on families will be worse in the long term with less money to deliver the public services that they rely on."

Further 175 hurt in security compound blasts but opposition blames attacks on security forces aiming to disrupt protests

Violence spread to Syria's largest city, Aleppo, on Friday with two blasts outside security compounds that left 28 people dead.

The explosions outside military intelligence and police compounds were blamed on terrorists by the state media. Some 175 people were injured, the worst day Aleppo has seen since the uprising against President Bashar al-Assad began last year. The northern city and economic hub has been largely quiet, but protests had been planned for Friday. Anti-Assad activists accused the regime of setting off the blasts to discredit the opposition and disrupt demonstrations.

In Homs, government forces continued their siege of rebel-held districts and other opposition areas, going house to house arresting people in the Insha'at district and keeping up an artillery and tank barrage on Baba Amr.

The intensified campaign began with the failure of the UN security council to agree on a common position last weekend, when Russia and China vetoed a resolution backing an Arab League peace plan and calling on Assad to step down. Moscow and Beijing stuck to their positions on Friday, dashing any residual hopes of a diplomatic breakthrough in the security council. Russia's deputy foreign minister, Sergey Ryabkov, accused the west of arming the rebel Free Syrian Army.

"Western states inciting Syrian opposition to uncompromising actions, as well as those sending arms to them, giving them advice and direction, are participating in the process of fomenting the crisis," he said, according to Itar-Tass news agency.

Western governments have denied supplying arms to the Free Syrian Army, which officials on on Friday referred to as a ragtag force of local militias and army deserters. "The Free Syrian Army is less cohesive than the name suggests. In a number of neighbourhoods it is a combination of local residents and defecting soldiers," a senior European diplomat said, on condition of anonymity. While there have been reports of Gulf states providing arms, observers said there were no sign of modern or sophisticated weapons in rebel hands and that the Free Syria Army had trouble smuggling arms across the Turkish and Jordanian borders.

The US ambassador to Syria yesterday posted satellite imagery on Facebook to show proof of government attacks on residential neighbourhoods in Homs. The commercial satellite image, posted days after closing the embassy in Damascus and titled "Security Operations Escalate in Homs," has labels pointing out burning buildings, smoke, impact craters, military vehicles and armored vehicles.

However Western capitals have stressed that diplomatic initiatives will be left to Arab states and Turkey. Foreign ministers from the Gulf Cooperation Council are due to meet on Saturday in Riyadh, Saudi Arabia, and the Arab League is due to convene in Cairo on Sunday, to draft a new strategy to raise pressure on Damascus without Russian or Chinese help. That strategy is expected to include the creation of a "friends of Syria" group excluding Moscow and Beijing, to impose new sanctions and to rally support for the Arab League peace plan in the UN general assembly.

Turkey and some Arab states have been pressing for urgent action to help pockets of Syrian civilians caught in the conflict with little access to food, water or medical supplies. US and European countries have been resolutely opposed to the creation of a "safe zone" or "humanitarian corridors" because they would require significant military backup to enforce.

"All this talk of humanitarian corridors and no-fly zones – once you start to go through with it and unless you follow it through, you do more harm than good," the European diplomat said. "A corridor has to be legal and properly protected. Otherwise you expose aid workers to danger, for example. You can't do this unless you are ready to go the whole hog."

Russian and Chinese resistance in the security council means it is impossible for now for the international criminal court to start investigating the Assad regime for crimes against humanity. The UN high commissioner for human rights, Navi Pillay, is due to address the general assembly on Monday to press the case for indictments.

"We believe, and we've said it and we'll keep repeating it, that the case of Syria belongs in the international criminal court. This would give a very, very strong message to those running the show," Rupert Colville, Pillay's spokesman, said It was also reported that western diplomats have told Syrian officials involved in the suppression of anti-regime protests that they will eventually be held accountable for their actions. Efforts are under way in Western capitals to assemble evidence of human rights abuses by members of president Bashar al Assad's regime with a view to use in future proceedings..

British officials said the UK government had been providing training and materials for independent human rights groups to record suspected atrocities, to provide admissible evidence for future trials at the international criminal court or elsewhere.

"The UK has funded and is continuing to fund work aimed at collecting evidence of crimes and preserve that evidence so that it can be used at a later date," the official said. "Even though these people may be out of reach of justice today, there may come a time when are they are not."

Ann Pettway enters a guilty plea to the kidnapping charge, saying: 'I went to the hospital. I took a child. It was wrong'

A woman who snatched a newborn baby from a New York City hospital in 1987, then raised the child as her own for more than two decades, pleaded guilty to a kidnapping charge on Friday as the girl's true mother wept in the courtroom.

Ann Pettway, 51, entered her plea at a federal courthouse in Manhattan. Her voice was flat as she briefly recounted how she took a train from her home in Connecticut to Harlem hospital, where she picked up Carlina White, a three-week-old baby who had been brought to the emergency room by her parents.

"I went to the hospital. I took a child," she said. "It was wrong."

Pettway said little else during the hearing and offered no explanation for her actions. As part of her plea bargain, prosecutors agreed to recommend between 10 and 12½ years in prison, although the actual term will be set by a judge.

As Pettway admitted her guilt, Carlina's birth mother, Joy White, quietly cried in the courtroom gallery. Afterward, she told reporters that she was outraged at the plea bargain and felt a decade in prison would be too light a punishment for the woman who had robbed her so cruelly. Justice, she said, would be a term of 23 years, one for every year she was separated from her daughter.

"I've lost 23 years of being with my daughter," she said, adding that those decades were filled with pain and heartache.

White said she still remembers encountering Pettway at the hospital on the day her daughter disappeared. She said the kidnapper was dressed like a nurse. "She came up to me and said to me, 'Don't cry. Your daughter is going to be OK.'"

A judge set a tentative sentencing date of 14 May.

The sensational mystery of the baby's kidnapping had stymied police for decades. In the end, the case was solved by Carlina herself.

As she grew up in Connecticut under the name Nejdra Nance, Carlina White had become increasingly suspicious of her own identity. Pettway ultimately told her a half-truth. She admitted that Carlina was someone else's daughter, but claimed she had been willingly given away by a drug addict.

Carlina eventually took to browsing the website of the National Centre for Missing and Exploited Children for clues to her identity. After matching a photo of herself with one on the site, she tracked down her true mother. The two reunited in January 2011. A DNA test later confirmed they were mother and child.

Now they speak every day, Joy White said.

"I love my daughter. She's a beautiful girl," she said, adding that she had kept a picture of her missing baby at her bedside for 23 years. "She told me yesterday, mommy, you're my valentine."

Communities minister defends right of councils to hold prayer sessions after landmark ruling against practice

A high court ruling that councils have no statutory rights to hold prayers at meetings has been strongly criticised by the communities secretary, Eric Pickles.

He said the judgment was "surprising and disappointing" and he believed that under the Localism Act councils ought to be allowed to say prayers.

Local authorities across the country will have to review their practice of holding prayers during formal meetings after the National Secular Society argued successfully against it.

Pickles said: "While welcoming and respecting fellow British citizens who belong to other faiths, we are a Christian country, with an established church governed by the Queen.

"Christianity plays an important part in the culture, heritage and fabric of our nation. Public authorities – be it parliament or a parish council – should have the right to say prayers before meetings if they wish. The right to worship is a fundamental and hard-fought British liberty.

"The Localism Act now gives councils a general power of competence – which allows them to undertake any general action that an individual could do unless it is specifically prohibited by law. Logically, this includes prayers before meetings."

Mr Justice Ouseley ruled in a landmark judgment that Bideford council in Devon had no statutory powers to hold prayers during council meetings. As many as half of UK local councils are believed to hold prayer sessions as part of their formal proceedings. In Bideford's case, the prayers were minuted.

The complaint against the practice was made by a councillor, Clive Bone, who was supported by the National Secular Society. The Christian Institute gave financial support to Bideford town council.

Ouseley said: "A local authority has no powers under section 111 of the Local Government Act 1972 to hold prayers as part of a formal local authority meeting or to summon councillors to such a meeting at which prayers are on the agenda.

"The saying of prayers in a local authority chamber before a formal meeting of such a body is lawful provided councillors are not formally summoned to attend."

Keith Porteous Wood, chief executive of the National Secular Society, welcomed the ruling. "We are delighted that the court has decided to make a ringingly secular decision, which will make the saying of prayers of whatever religion unlawful in local councils. This will mean no one will be disadvantaged or feel uncomfortable in performing their duties as a councillor in meetings."

Bone, the Bideford councillor who launched the action, said he was "delighted" when the Guardian broke the news of the judgment to him.

He said he was horrified when he became a councillor in 2007 to find prayers were being said. "It was outdated, antiquated and a turnoff," he said. He twice championed motions trying to get the practice halted but they were defeated.

Bone argued that the saying of prayers was bad for local democracy. "It sends out a signal that local governments are for particular types of people and not for everyone," he said.

The Christian Institute said: "The practice of saying prayers at Bideford town council meetings is understood to date back to the days of Queen Elizabeth I.

"The council has recently twice voted in support of continuing with the prayers. Individual councillors were free to not take part in the prayers if they wished, and the register of attendance was not taken until after the prayers had finished.

"Nevertheless, a court case was brought by the National Secular Society and a secularist former councillor, Mr Clive Bone, against Bideford town council."

The Christian Institute's spokesman, Simon Calvert, said: "We welcome the finding that the saying of prayers isn't discriminatory, or a breach of equality laws, or human rights laws. But it is extraordinary to rule that councils have no lawful authority to choose, if they so wish, to start their formal meetings with prayers. That is simply wrong.

"The logic of the ruling is that councils would also be going beyond the law if they took a vote and decided to start each formal council meeting with the national anthem."

Tony Inch, a councillor who supported the prayers, said the ruling was a "big shock and a shame". He added: "We seem to be going from one crisis to another. It has implications for councils up and down the country. Where is it going to end? It's eroding the whole basis of Christian life in this country."

The bishop of Exeter, the Right Rev Michael Langrish, said he would encourage councils in his diocese, including Bideford, to continue to say prayers before the statutory business of the meeting began.

He said it was a great pity that "a tiny minority are seeking to ban the majority" of people who were for the saying of prayers.

Speaking on the BBC, he said: "I've got no doubt the agenda of the National Secular Society is inch by inch to drive religion out of the public sphere.

"If they get their way it will have enormous implications for prayers in parliament, Remembrance Day, the jubilee celebrations, even the singing of the national anthem."

"The wider issue has got to be resisted. It strikes right at the heart of our understanding of ourself as a society. No one is compelled to participate in these activities. There is complete freedom. That freedom has to be respected."

The Bideford town clerk Heather Blackburn also expressed "surprise and disappointment" with the ruling.

But she noted that the court "has confirmed that prayers may be said in the council chamber immediately preceding formal business".

Blackburn said: "We are very pleased that the court has decided in favour of Bideford that we had not discriminated against Mr Bone nor infringed his human rights and that the practices adopted by the council did not infringe equality legislation.

"We will be speaking to our legal team to consider our options, including whether to appeal."

Usdaw wants chains to follow Sainsbury's and Waterstones and end long-term unpaid labour for young unemployed

Unions have called on Britain's biggest high street chains to withdraw from government programmes that make the unemployed work for up to six months unpaid or face losing their benefits.

The call comes as Sainsbury's, one of the UK's largest retailers, confirmed to the Guardian that it has stopped branch managers from taking on jobseekers under the work experience scheme.

The move follows that of Waterstones book chain, which last week announced it had pulled out of the scheme because it did not want to "encourage work for no pay".

Under the work experience scheme, hundreds of thousands of largely young jobseekers will work in charities and private businesses for 30 hours a week, for eight weeks, without pay, and can have their benefits removed if they withdraw. The government has also introduced a plethora of other schemes, such as mandatory work activity, sector-based work academies, and the community action programme, which can force jobseekers to take unpaid work for up to six months as a condition of their benefits.

The schemes are in operation at more than a dozen well-known chains, such as Boots, Tesco, Asda, Primark, Argos, TK Maxx, Poundland and the Arcadia group of stores run by billionaire Sir Philip Green, which includes Top Shop and Burton.

Shopworkers union Usdaw, which represents more than 400,000 workers in high street retail outlets, said it was currently in discussion with a number of major companies about their involvement.

John Hannett, Usdaw general secretary, said: "Usdaw is not opposed to schemes that genuinely aim to give young people appropriate work experience or help long-term unemployed people get back into work, but schemes should be voluntary, participants should receive the rate for the job, and there needs to be transparent checks and balances in place.

"We are in discussions with the participating companies we have agreements with to re-examine their continuing involvement in the […] various schemes."

Hannett added: "The unemployment crisis is never going to be solved by forcing people to work for nothing. What the country needs is a proper strategy for jobs and growth."

The TUC called for companies to pull out and warned that the government-mandated schemes were encouraging more unpaid work rather than creating actual jobs.

TUC general secretary Brendan Barber said: "While unemployed people may benefit from short periods of work experience, forcing them to work effectively for free for up to six months is not the way to solve the UK's jobs crisis.

"Not only are the high street names involved […] in danger of exploiting participants, the scheme also poses a very real threat to the jobs and pay of existing workers. It is also far from clear whether the placements actually involve any genuine degree of training or work experience that will be of any use to the unemployed taking part.

"The danger is that [this] is simply encouraging employers to continue using unpaid labour when what they should be doing is recruiting unemployed people into properly paid jobs."

Solicitors from Public Interest Lawyers in Birmingham this week issued letters to the heads of 15 companies to make them aware of legal proceedings they have lodged in the high court challenging the legality of such schemes.

Their client, geology graduate Cait Reilly, is currently arguing in the high court that she was made to work unpaid in Poundland, contrary to the forced labour provisions in the Human Rights Act.

Phil Shiner from Public Interest Lawyers said he welcomed the withdrawal of major high street chains from "exploitative" programmes.

"Some major companies are now waking up and turning their backs on compulsory unpaid labour schemes. We have written to a number of major retailers involved in work-for-your-benefit schemes and asked them whether they intend to continue in light of what the Guardian has reported and we have brought to the attention of the courts.

"Whilst our legal actions are against the Department of Work and Pensions, these household brands bear their own moral and social responsibility to ensure that they have nothing to do with these exploitative and ill-judged programmes."

Sainsbury's, which has more than 1,000 stores in the UK, says it only now participates in the work trial programme, in which people work a maximum of 16 hours a week for four weeks in an actual job vacancy, and can pull out at any point without sanction.

Sainsbury's stressed that the work trials were "entirely voluntary" and, unlike work experience schemes, "candidates did not lose their benefits if they didn't participate".

The supermarket added that it had taken on 4,300 employees through the scheme.

Defending its continued participation in schemes that have elements of compulsion, Tesco said: "We take our responsibility as Britain's biggest private sector employer seriously and are playing our part to help tackle unemployment in these challenging times."

Tesco said that over the last four months around 1,400 people had worked for free for a month as part of work experience in its stores, and since the scheme began 300 jobseekers had gained a job with the company.

Mohamed Nasheed, ousted in suspected military-backed coup, calls for elections as diplomats arrive to try to broker deal

Thousands of people have takento the streets in the capital of the Maldives in support of former president Mohamed Nasheed, ousted in what appeared to be a military-backed coup earlier this week.

On Thursday Nasheed was confined to his family home in Malé, facing detention after a court issued an arrest warrant against him. However, the political fortunes of the democracy activist and environmental campaigner appeared to be improving when thousands ignored a heavy presence of security forces to cheer him as he attended Friday prayers at the main mosque.

Though the police played a key role in forcing the 44-year-old out and in subsequent violence directed at his supporters, they did not intervene on Friday.

Nasheed called on his successor, former vice-president Mohamed Waheed Hussain Manik, to resign and told reporters: "I am not asking to be reinstated. I am asking for fresh elections within the next two months. Dr Waheed has to resign.

"There has to be judicial reform and reform of the criminal justice system in this country. Status quo cannot be maintained. [The] international community needs to do more, they have to see the situation in Maldives, the real picture."

Nasheed, who won the Maldives' first democratic elections in 2008 with 54% of the vote, says he was forced to resign by a group of soldiers who threatened violence. The new government denies coercion. Presidential polls are due in 2013.

Almost all the Maldives' 350,000 inhabitants are Sunni Muslims and crowds began gathering at the 17th-century Hukuru Miskiiy mosque when the word spread that Nasheed would be present. Many chanted "Long live Nasheed, he is our president."

Hundreds then followed the ousted leader, surrounded by members of his Maldivian Democratic party (MDP), when he walked home nearby. "He is our president. We refuse to accept a military dictatorship," said 25-year-old Ismail as he marched. A second man said that supporters would not be cowed: "[Nasheed] will remain our president."

Malé appeared calm on Friday, if tense. Scores were injured in violence earlier this week, several seriously. International diplomats are arriving in the Maldives to broker a deal between the MDP and the new government – which includes many individuals close to former president Mamoon Abdul Gayoom, whose 30-year rule was ended by the 2008 elections.

Nasheed loyalists accuse Gayoom, or elements loyal to him, of engineering the crisis which led to their leader's resignation last week. Oscar Fernandez-Taranco, the UN assistant secretary general for political affairs, met Manik at the start of a three-day visit to urge both sides to negotiate and avoid violence. Manik has denied that his predecessor was forced out of office and has described his own appointment as constitutional.

Diplomats from India, Britain, the US and EU are in Malé, or are expected this weekend. A Commonwealth delegation also was meeting all the political parties.

"We told the president that at this time, it is very important to ensure the police and military operate on an entirely constitutional level to cool the temperatures. The fragility of the democratic transition here was clearly demonstrated by recent events," Akbar Khan, the delegation head, told Reuters.

India, which has changed its position repeatedly in recent days after strongly backing the new government earlier this week, is understood to have asked Manik to make sure his predecessor was not arrested.

Though the clashes earlier in the week were concentrated on Malé itself, violence occurred on Addu, the southernmost island in the archipelago. Nasheed told reporters on Friday: "Police and military are ransacking ... dragging people out from their homes. If [they are] MDP, they are spraying them with pepper [spray], beating them and arresting them. We are losing a country as we speak."

Much of the economy of the Maldives, a former British protectorate, depends on the luxury tourist trade. This appeared unaffected on Friday with flights operating as usual. Most visitors to the country bypass the capital and are taken directly by aeroplane or speedboat to island resorts. Nasheed, who has won a series of international awards for his efforts to increase awareness on global warming, said that if no new elections were scheduled his supporters would take to the streets.

Father of 10-year-old boy fatally stabbed in 2000 calls for public inquiry after Ricky Preddie breaches licence for second time

The father of schoolboy Damilola Taylor has called for a public inquiry after one of his son's killers was recalled to prison for a second time, just 16 days after being released.

Ricky Preddie, who was jailed for eight years in 2006 for the manslaughter of the 10-year-old on a south London housing estate in 2000, was recalled to prison on Thursday for breaching the terms of his licence. He entered an exclusion zone in Southwark, south London, and might have met former gang members after being released from Pentonville prison in north London on 25 January.

Gary Trowsdale, a spokesman for the Damilola Taylor Trust, said the Taylor family was being tortured again with the news that Preddie had been recalled.

"The Taylor family, society at large, and also the boys themselves have been failed by the system and the academics that run it," he said. "Now we are demanding answers and believe a public inquiry is the only way of getting them. Richard Taylor, supported by the Damilola Taylor Trust and other victim families, is writing to the prime minister calling for a public inquiry into how the system has failed so badly in this case."

Two "bungled trials" had cost £16m to put his two killers in prison for four years, Trowsdale said. "During this period there were many reported incidents of their continuing to break the law. There was never a hint of remorse or reform."

The boys' age and association with other young offenders in the area had seen them labelled as "Peckham boys", with the area suffering by association, he said.

"It has since been well-documented that the case was a landmark in the birth of a new wave of 'branded' youth gangs. Given the seriousness to society this case represented, the Taylor family and the DTT (Damilola Taylor Trust) have always maintained that the reform of the boys should have been essential before their release. They knew nothing but the life of the street and so would have little chance of creating new lives for themselves unless this was the case."

He said every young gang member knew the name Preddie.

"Now with the Taylor family being tortured again by the media interest in the boy being recalled a second time, we are calling on the prime minister to act."

Preddie, 24, has now been recalled to prison twice for breaking the terms of his release by visiting Southwark and associating with gang members. He was originally released in September 2010 but sent back to jail last March for breaking the conditions of his licence. He was released again two weeks ago, but arrested at an address in London on Thursday night.

Harry Fletcher, assistant general secretary of the probation union Napo, said Preddie was recalled after police received information that he had entered the exclusion zone and may have been in contact with banned people – former gang members.

"This is his second recall for the same breach of trust," Fletcher said. "It will be treated seriously by the authorities and he could now serve as much as another 14 months in custody."

The case will be referred within 28 days to the parole board, which will consider whether Preddie – who was due to leave prison at the end of May 2013 – can be released.

A Ministry of Justice spokeswoman said the decision to release recalled offenders from custody was made by the independent parole board. "Serious offenders released on licence are subject to a strict set of conditions and controls. Examples include a strict curfew and other restrictions on their movements, as well as frequent meetings with their offender manager. If they fail to comply with their licence conditions, they are liable to be returned to custody."

Damilola bled to death after being stabbed in the leg with a broken bottle by Preddie and his brother, Danny, who was released in September last year after serving five years of his sentence. Damilola had recently moved with his family from Nigeria and was settling into a new school when he was attacked while walking home from the library after school by members of the brothers' street gang.

The brothers were convicted of manslaughter at the Old Bailey six years after Damilola's death, following three trials and two police investigations. Ricky Preddie, 13 at the time of the killing, was brought to court when forensic evidence, missed at the time, revealed tiny blood spots and fibres.

The nature of the crime and the young age of the victim grabbed headlines, sparking debate about gangs and youth violence.

Fraud worth £50m a year in unpaid duty and VAT afforded gang members a luxury lifestyle, investigators say

Four members of a criminal gang have been jailed for their roles in one of the biggest alcohol-smuggling frauds ever uncovered in Britain.

The scam, worth an estimated £50m a year in unpaid duty and VAT, allowed the men to buy fast cars and luxury homes, investigators said.

The four used their positions and contacts in the drinks trade to conceal dozens of truckloads of alcohol being moved into Britain without paying tax or duties in a scam known as diversion fraud.

The gang's ringleader, 49-year-old Kevin Burrage, and Gary Clarke, 55, were convicted of conspiracy to cheat the public revenue following a three-month trial at Canterbury crown court last month.

Their accomplices, Michael Turner, 52, and 32-year-old Davinder Dhaliwal, pleaded guilty at an earlier hearing to the same charges and fraudulent evasion of excise duty.

Sentencing them, Judge Michael O'Sullivan said: "All four of you were involved in a criminal enterprise to cheat the revenue. Alcohol was diverted into the UK without paying duty or tax due to the revenue."

Burrage, of Shoeburyness, Essex, was jailed for 10 years, and Clarke, of Thorpe Bay, also in Essex, was sentenced to six years and nine months. Turner, of Folkestone, Kent, was jailed for three years and two months and Dhaliwal, of Dartford, for 16 months.

Prosecutor Andrew Marshall said the scam focused on Promptstock Ltd, a bonded warehouse in Essex owned by Burrage. Alcohol can be stored and moved between bonded warehouses within the EU without paying excise duties.

But once the business needs to release the alcohol to retailers, the excise duty becomes payable at the rates applicable in the host country.

Burrage's brother-in-law, Clarke, managed the warehouse used by the pair to import and export alcohol without paying a penny in tax.

The gang bought beer, wine and spirits from bonded warehouses in France and imported them duty-free into Britain, destined for Promptstock Ltd. Once through Customs, the alcohol was illegally diverted to locations around the country and then sold without duty being added.

Marshall said: "What was planned and what took place was to cause enormous and continuous losses to the Revenue of millions of pounds, and those losses were only stopped by the arrests."

Over a 22-month period from January 2007, he said the total VAT and excise duty loss caused by the gang amounted to £7.49m.

Marshall said: "Mr Burrage was the organiser and ringleader of all of this trade. It was fraudulent from the very start. It has an international element, controlling goods abroad and from abroad."

A "web of corrupt players" was involved in the fraud, he said, including transport companies that diverted the loads from their intended destinations.

Investigators said the gang also reversed the fraud by appearing to send lorries loaded with non-duty paid alcohol to the continent. HMRC said the cargo of alcohol in fact remained in the UK and was sold on, again with no tax added.

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This poor man will be unable to do anything right, even if he does everything right: Phil Dowd (Staffordshire)

Liverpool: Suarez.
Supporting cast: Reina, Johnson, Skrtel, Agger, Jose Enrique, Spearing, Henderson, Kuyt, Gerrard, Downing.
Substitutes: Doni, Carroll, Carragher, Adam, Shelvey, Kelly, Bellamy.

Manchester United: Evra.
Supporting cast: De Gea, Rafael Da Silva, Ferdinand, Evans, Valencia, Carrick, Scholes, Giggs, Rooney, Welbeck.
Subs: Amos, Berbatov, Park, Hernandez, Fabio Da Silva, Cleverley, Pogba.

The match starts at: 12.45pm.

It kicks off at: 12.46pm.

Eventually, when we've all grown up, in the year 2525, there'll be no need for lame distraction techniques ahead of meetings between the two biggest clubs in the land. But as things stand, the rivalry between Manchester United and Liverpool whisks folk up into a proper froth. Even before the Suarez-Evra conflagration last October, which led to all this, the biggest fixture in English football regularly generated more heat than light. Barcelona and Real Madrid contest El Clásico, Internazionale and Juventus play the Derby d'Italia, Boca Juniors and River Plate fight out the Superclásico. But there's no fancy name for this anger-whipper. El Bullshitto? Superbullshitto? I haven't given this a great deal of thought, I've got to be honest. Though you've probably ascertained that already.

Look, everyone! A cute kitten! And a funny doggie.