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The head of Barclays bank predicted that the economic gloom gripping the UK would deepen further, with house prices set to tumble as unemployment figures soar.

John Varley, group chief executive of Barclays, painted a bleak outlook, predicting that property prices could fall by up to 30%.

In an interview with Jeff Randall Live on Sky News, the bank boss also criticised mortgage borrowing levels over the last decade.

The comments will be seen as highly significant in the City as they come from such an eminent figure.

Mr Varley warned that the UK was only "halfway" through the slump with house prices set for even greater falls.

He said: "Our view was that from the top to the bottom, you would see a fall of something like 25 to 30%.

"I suspect we're about halfway through that at the moment. I mean that slowdown, the negative house price inflation started in 2007, it's accelerated in 2008.

"We're probably about halfway through that period, so in other words we've got another 10 to 15% to fall between now and the end of next year. That would be our assessment."

Mr Varley's bleak prediction extended into the jobs market. He said: "Our view is that unemployment will rise. Unemployment is likely to go north of 7% over the course of the next 12 months or so, it might be as high as 7.5%.

"I think an additional 700,000 people unemployed over the course of the next 12 months is certainly possible to contemplate."

-Nova

A man wanted by Interpol for terrorist offences has been advising Scotland Yard, it was reported.

The Times claimed Mohamed Ali Harrath had been advising the Metropolitan Police, the UK's biggest force, on countering Muslim extremism.

Tunisian-born Mr Harrath, 45, is listed as wanted on the Interpol website. Interpol is the world's largest international police organisation.

The site lists his categories of offences as counterfeiting, forgery, crimes involving the use of weapons, explosives and terrorism.

The Interpol website reveals that an arrest warrant for Mr Harrath was issued by Tunisia.

The Times reported that Mr Harrath had been appointed by Scotland Yard as an adviser to its Muslim Contact Unit on preventing terrorism.

Mr Harrath is reportedly the chief executive of the broadcaster, the Islam Channel, based in London.

The Met has so far refused to comment on the story.

-Nova

Financial giants have revealed potential losses of almost £4 billion as they joined a queue of investors caught up in an alleged fraud by Wall Street investment manager Bernard Madoff.

The Royal Bank of Scotland, HSBC and Abbey owner Santander as well as France's BNP Paribas and Japan's Nomura Holdings all reported they had fallen victim to Madoff's alleged 50-billion US dollar (£33 billion) pyramid scheme.

The Wunderkinder charity connected to film director Steven Spielberg and the foundation of Nobel laureate Elie Wiesel were also reportedly among the investors.

Madoff, 70, a well respected investment manager and former chairman of New York's Nasdaq stock exchange, was arrested last week after apparently telling his employees his operations were "all just one big lie" and "basically, a giant Ponzi scheme".

A Ponzi scheme is a fraudulent investment vehicle which pays very high returns to existing investors paid for by money put into the fund by newcomers.

The arrest has raised questions about the competence of financial regulators.

Hedge fund giant Man Group said: "Based on information available to date, it appears that a systematic and comprehensive fraud may have been committed, evading a range of structural controls." The company, which said it had approximately 360 million US dollars (£239 million) of exposure, said Madoff Securities was registered with the Securities and Exchange Commission (SEC), which monitors investment funds.

Madoff Securities was also a member of five self-regulatory organisations, including US independent securities regulator Finra and the Nasdaq.

The Royal Bank of Scotland - 58% owned by the taxpayer - said £400 million was at risk while Spanish bank Santander, which owns Abbey and the savings business of Bradford & Bingley, said its potential exposure was around £2.1 billion.

HSBC said it believed it had a potential exposure of around 1 billion US dollars (£668 million) from providing finance to "a small number" of clients who then invested with Madoff.

-Nova

The Government has pledged an extra £100 million to help first-time buyers get on to the property ladder.

Housing Minister Margaret Beckett said £400 million would be made available through the Government's HomeBuy Direct scheme, up from £300 million when the initiative was first announced in September.

More than 130 developers have also agreed to take part in the scheme, which enables households with incomes below £60,000 to buy a new build property with an equity loan.

It is hoped the scheme will help up to 18,000 first-time buyers, 8,000 more than first planned, as well as offering support to the housebuilding industry during the downturn by buying up unsold properties.

Under the HomeBuy Direct scheme, first-time buyers will be able to purchase a new home from selected plots on certain sites in England with the help of an equity loan.

The loan, which will be funded in part by the Government and in part by the developer, will be free of charge for five years and can be used as a deposit.

The loan can cover up to 30% of the purchase price of the property.

Eligible first-time buyers will be able to apply to take part in the scheme from early next year.

Stewart Baseley, executive chairman of the Home Builders Federation, said: "The announcement is very welcome and great news for home buyers and the industry alike.

"HBF has worked closely with Government to design a workable product for both customer and seller, and HomeBuy Direct will assist to both deliver desperately needed affordable housing, and protect house building industry capacity - so vital if we are to provide the houses we know this country needs in the future."

-Nova

Pakistan will not let British investigators question suspects detained in Pakistan over the Mumbai terrorist attacks, the prime minister has said.

Gordon Brown asked for access to the suspects during a visit to Islamabad on Sunday. But his Pakistani counterpart Yousuf Raza Gilani has said he turned him down.

Gilani said in parliament he also told Brown that 'if there were any proofs, these persons will be prosecuted under the law of Pakistan', Gilani's office said.

India has blamed a Pakistan-based militant group called Lashkar-e-Taiba for last month's attacks in Mumbai, which killed more than 160 people, including three British citizens.

Pakistan has pledged full co-operation with the investigation, arrested at least two key suspects and clamped down on an Islamic charity after the UN declared it a front for terrorism.

Brown said co-operation among investigators was vital to defeat transnational terrorism and said three-quarters of the most serious terrorist plots investigated in Britain had links to al Qaida in Pakistan.

Brown also asked India to let British police question the only gunman captured alive during the Mumbai attacks. India has made no public response.

The attacks heightened tension between India and Pakistan, nuclear-armed neighbours who have already fought three wars, and added to the strain on the pro-Western government in Islamabad.

Islamist parties and nationalist commentators have criticised the government for moving against the charity, Jamaat-ud-Dawa, under US and Indian pressure.

Gilani told governors the charity's extensive welfare activities, which includes running schools and clinics, would continue under government oversight and different names. He said Pakistan had tried hard to lower the tension, but reiterated it was ready for war "if it is thrust on us".

-Nova

The parents of a British oil worker who was freed after more than a fortnight in captivity have spoken of their relief.

Bruce Strachan, in Nigeria working for Aberdeen-based Global Lifting Services, was kidnapped in November in the dangerous oil-rich south of the country.

It was confirmed that the worker was released unharmed on December 12.

In a joint statement issued through Grampian Police, Mr Strachan's mother and father, Harold and Moyra, said: "We are absolutely delighted that Bruce has been released and are looking forward to seeing him again.

"We were very relieved to get the phone call from him saying he had been released. He was very tired but the main thing is he is safe.

"We would like to thank all of our family, friends and neighbours who have been a tremendous support to us at this trying time."

A Foreign Office spokesman said: "We can confirm the safe release of a British national on December 12. We are providing full consular assistance."

The Scot was taken on November 28 in the southern city of Port Harcourt by people who have yet to be identified.

He was the latest of more than 200 foreign workers in almost three years to be abducted in southern Nigeria.

Hostages are normally released unharmed after a ransom is paid.

-Nova

An NHS doctor freed by the courts after being held captive by her family in Bangladesh is on her way home.

Dr Humayra Abedin, 33, from east London, was being held by her parents against her will in the Bangladeshi capital of Dhaka and put under pressure to marry against her will.

A spokesman for the British High Commission confirmed she had boarded a non-direct flight from Dhaka.

Her lawyer in the UK, Anne-Marie Hutchinson, said she had been due to arrive at Heathrow airport but her first flight from Bangladesh was delayed.

A spokeswoman for Heathrow airport said Dr Abedin would not walk through the terminal after she landed.

After speaking to Dr Abedin on Sunday night, Ms Hutchinson said: "She's fine, but obviously exhausted and was anxious to leave before people changed their minds."

Dr Abedin came to the UK six years ago to study for a Masters degree in public health at Leeds University.

She had hoped to become a registrar at a GP surgery in east London in August but, after receiving news her mother had taken ill, returned to Dhaka where she was then held captive.

Judge Syed Mahmud Hossain had refused to reveal the evidence of Dr Abedin because the closed-door hearing contained some "objectionable elements". However, he branded the parents' actions "not acceptable".

While in captivity Dr Abedin raised the alarm when she sent an email to a friend requesting help. The British High Court issued an order on December 5 under Britain's new Forced Marriage Act - the legislation allows British courts to prevent someone from being forced into marriage.

-Nova

Britain is facing a recession "deeper than any that we have known", a Cabinet minister has warned.

Tessa Jowell, the Olympics Minister, issued the stark forecast as she defended London's bid for the 2012 games.

Her remarks were immediately seized upon by the Tories as a "stunning admission" of the scale of the economic difficulties the UK is in.

They were made in response to concern about the £9.325 billion budget for London 2012 as the country slides into recession.

Challenged as to whether the Government should have pursued the bid in the first place, Ms Jowell told BBC2's The Daily Politics: "We certainly were right. We were right to go because of the sporting legacy that the Olympics will create.

"But, as it turns out, facing a recession deeper than any that we have known, almost certainly, the Olympics is, I mean, it's economic gold at a time of economic need.

"It is creating jobs not just in the East End of London, but also creating business and commercial opportunities for firms right around the country. It is a £6 billion shot in the arm."

Shadow chancellor George Osborne said Ms Jowell's comments demolished Alistair Darling's predictions in last month's Pre-Budget Report.

The Chancellor has been predicting that the economy would return to growth in the second half of 2009.

Mr Osborne said: "This is a stunning admission of the true disaster that Gordon Brown and the Labour Government has visited on the country. For months they tried to pretend that Britain would be better off than previous recessions. Now someone who sits round Gordon Brown's Cabinet table admits that it will be worse."

-Nova