The mood of uneasy calm seen across Europe since the Greek bailout in February was shattered as financial markets took fright at evidence of a double-dip recession and growing popular opposition to welfare cuts and tax increases. Italy and Spain, the eurozone's third and fourth biggest economies, were at the centre of the market turmoil, with investors demanding an increasingly high premium for holding their bonds.

"Spain is right in the centre of a European storm," admitted finance minister Luis de Guindos, who declined to rule out an eventual bailout but insisted it could be avoided. In Italy, Mario Monti's coalition government is facing growing hostility to reforms of its labour market, while the sheer size of the country's public debt made it an obvious target for nervous traders. The prospect of Greek voters rejecting austerity and the French electorate denying Nicolas Sarkozy a second term as president was also weighing on the markets.

The Greek government said it would hold a general election on 6 May, with opinion polls showing support for the mainstream pro-austerity parties is too weak to allow them to form a government. "Spain is a big focus right now and even Greece will be coming back into the picture as it looks for another tranche of aid, so this eurozone debt tragedy is not going away, but seems to be getting worse," said Daniel Hwang, senior currency strategist at Forex.com in New York.

The markets closed in New York with Wall Street completing a fifth successive day of decline, with the Dow Jones having lost 213 points. In London, the FTSE 100 closed down 128 points, at 5,595.55. Oil prices also fell sharply amid concerns about the prospects for growth on both sides of the Atlantic and in Asia, with the price of a barrel of crude falling by more than $2. In contrast, safe haven assets such as gold, the US dollar and bonds in the US, Germany and Britain were all in demand.

After a tornado ripped through Springfield, Massachusetts, last year, R Paula Lazzari's home was badly damaged. The retired teacher found broken windows, missing siding and a damaged roof. Her insurer offered to fund repairs for one broken window and some of the siding. It took nine months - and mediation services from an independent adjuster and the Massachusetts Division of Insurance - to get her bills paid, according to the parties involved.

In this era of unpredictable weather patterns, Lazzari's case is not unique. Insurance companies are raising rates, cutting coverage, balking at some payouts and generally shifting more expense and liability to homeowners, according to reports from the industry and its critics. "Insurance companies have significantly and methodically decreased their financial responsibility for weather catastrophes like hurricanes, tornados and floods in recent years," the Consumer Federation of America said in a statement after studying industry data.

The industry concedes that it is trying to avoid getting trounced by those same punishing weather patterns. "Last year (2011) was an extraordinary year for natural disasters," said Michael Barry of the Insurance Information Institute (III), an industry trade group. "Insurers have taken a step back to assess whether or not they can absorb severe losses."

That leaves two options: raising private capital or turning to the EU for bailout funds. Prospects for a private sector solution are poor. Nothing on the horizon looks likely to persuade foreign fund managers to invest, such is the fear of the banks' growing bad loans, their holdings of shaky sovereign debt and the worsening economy. Already battered by a property market crash that began four years ago and continues unabated, few Spanish banks are able to borrow funds on wholesale credit markets and the majority are instead relying on the European Central Bank.

"Most are currently on liquidity life support from the ECB but asset quality continues to deteriorate as house prices keep falling and unemployment is still rising," said Georg Grodzki, head of credit research at Legal & General Investment Management. "Their funding remains constrained and competition for deposits intense," he told Reuters. Economy Minister Luis De Guindos told Reuters last week that all Spanish banks had met capital requirements set by the European Banking Authority under a 115-billion-euro recapitalization plan decided by European Union leaders in December.

But fund managers remain skeptical due to the slow-burning property crash. They include Mark Glazener, head of global equities at Dutch asset manager Robeco, who sold off his exposure to Spain at the end of last year. "Given the scale of over-building over all these years, the present provisioning that the banks have made does not appear to be enough," he said.

The decision to cast out Bo Xilai from the party's Central Committee and its Politburo effectively ends the career of the former high-flyer, widely seen as pressing for a top post in China's next leadership to be decided later this year. The official Xinhua news agency confirmed a Reuters report several hours earlier on Tuesday that Bo had been suspended from his party posts, and separately reported that his wife, Gu Kailai, was suspected in the murder of Briton Neil Heywood.

"Comrade Bo Xilai is suspected of being involved in serious disciplinary violations," said Xinhua, citing a decision by the central party leadership to banish Bo from its top ranks. "Police set up a team to reinvestigate the case of the British national Neil Heywood who was found dead in Chongqing," the news agency said, referring to the sprawling southwestern municipality where Bo was party chief until he was dismissed in March as a scandal surrounding him unfolded.

It was the most dramatic convulsion in China's secretive leadership since 1989, when Jiang Zemin was plucked from obscurity to head the Communist Party after the bloody crackdown on democracy protests in Beijing. Bo's ouster has sparked public contention and revealed friction among China's leaders, pitting reformist Premier Wen Jiabao against conservative officials who sources have said were dismayed by the upheavals months before the party congress that anoints the new leadership. There were even outlandish rumors of an attempted coup.

Prime Minister David Cameron said he was "very pleased" with the news. "It's quite right that we have a proper legal process, although sometimes you can be frustrated by how long things take," he added. The court's decision is one of its most important since 9/11 because it approves of human rights in US maximum security prisons, making it easier for the UK to send suspects to its closest ally. There could still hypothetically be an appeal against the court's ruling in its final Grand Chamber - but in practice, very few cases are re-examined in that final forum.

The men have three months to try to persuade the Grand Chamber to reopen the entire case and examine it. If the men fail to launch an appeal, they will be extradited to the United States. The family of one of the men, Babar Ahmad, who has been held for a record of nearly eight years without trial, said he would fight on against extradition.

Home Secretary Theresa May welcomed the ruling, and said she would work to ensure that the suspects were handed over to the US authorities "as quickly as possible". The US Justice Department also said it was "pleased" about the decision on the five. "We look forward to the court's decision becoming final and to the extradition of these defendants to stand trial in the United States," it said in a statement.

Worries over the eurozone debt crisis and the US economic recovery losing its steam hit shares of exporters. Sony fell 5%, a day after it doubled its forecast of an annual loss to $6.4 billion (£4 billion). "Japan's consumer electronics industry is facing defeat," said Fujio Ando, senior managing director of Chibagin Asset Management. "I don't think there is any guarantee that we will see the company return to black this year." he said.

One of the biggest fears among the global investors has been that the eurozone debt crisis, which has hurt growth countries such as Greece, may spread to the region's bigger economies. Those fears were fanned further on Tuesday after the interest rate on Spanish bonds traded in the secondary market rose further. The yield on 10-year bonds hit 5.99%, up from 5.74% on Monday, indicating that investors are getting increasingly concerned about Spain's ability to repay its debts.

The fear is that if the crisis in Spain, which makes up about 11% of the total output of the 17 countries that use the euro, is not managed properly, it will have a negative impact on the region's growth and also hurt the global economic recovery. On Tuesday, France's Cac 40 fell 3.1%, the UK's FTSE 100 and Germany's Dax lost about 2.5%.

Analysts warned that markets may fall even further amid a dip in investor morale. "2012 is at risk of being a carbon copy of 2011, where equity markets began the year with a spring in their step before sentiment turned very bearish as the European sovereign debt crisis spiralled out of control", said Angus Campbell of Capital Spreads. At the same time, weaker-than-expected jobs data from the US has raised concerns about the recovery in the world's biggest economy.

The Standard & Poor's 500-stock index declined 16 points, or 1.1%, to 1366. Both benchmarks are on pace to string together their longest losing streaks this year. The Nasdaq Composite fell 35 points, or 1.2%, to 3010.

Growth-sensitive energy, materials and industrial stocks weakened, although all 10 sectors of the S&P 500 declined. Alcoa, AA -2.08% set to kick off the first-quarter earnings season when it releases its results after the close, fell. Other blue-chip laggards included Caterpillar, CAT -2.80% Chevron CVX -1.58%and Exxon Mobil XOM -1.76%.

"We were priced for perfection and it's a lot less than perfect out there," said Uri Landesman, president of Platinum Partners LLP. "If earnings start to be disappointing, it's a perfect storm. And given how quickly the market's risen, it suggests to me that this market will find a base, and that it's going to be lower."

John Bolton, the American ambassador to the UN under George Bush, said: “Britain should renounce the jurisdiction of this court. It’s a question of what do British people want to do? Do you want to be an independent nation, or do you want to be a county in Europe?”

“This is just another example of Britain’s mistake in allowing European institutions to develop to the extent they have. It is yet another infringement on British sovereignty that undercuts its ability to cooperate with the United States. It also calls into question the ability of Europe as a whole to be an effective partner in the war against terrorism.”

Estimates obtained by The Daily Telegraph suggest that it has cost the taxpayer £2.6 million to keep the six men in high-security jails. A further £1.5 million is estimated to have been spent on legal costs, including legal aid for the men, and thousands more on benefit claims for their families. The men have been fighting extradition on human rights grounds for up to 14 years.

But instead of investigating or setting up parameters, the USDA asserts that it is safe in their view so there is no cause for alarm. It is currently forbidden by the agency itself for any producer to distribute or sell cloned meat.The news came back in August of 2010, when US Secretary of Agriculture Tom Vilsack went on record saying that he really doesn’t know whether or not cloned meat is being put on dinner tables nationwide.

The announcement was made after the United Kingdom’s Food Standards Agency told consumers that meat from descendants of cloned animals had already entered the food supply. Of course the agency made the statements a year after the cloned products leaked into the food chain. Still, just like the USDA, the UK’s FSA stated that they believe cloned meat poses no risk, so citizens should not panic.

The reason? They say that cloned meat has ‘no substantial difference’ to traditional meat, and therefore it is safe. The statements echo those of Monsanto, whose genetically modified creations have been linked to everything from organ damage to toxicity-induced cell death.

The number of people out of work will not peak until at least September with almost 5,000 Britons becoming jobless each week between now and the end of August, the report from the Institute for Public Policy Research (IPPR) found. The analysis, based on predictions for UK jobs by the Government’s independent forecaster, suggests Britain’s jobless toll may fall short of reaching 3 miliion as some analysts predicted at the start of the recession. Unemployment stands at 2.67 million at present.

However, the IPPR study paints a bleak picture in the year ahead for young people and jobseekers over 50, already hit disproportionately by the jobs crisis. The study said 41,000 more people aged between 16 and 24 will join the ranks of the unemployed, breaking a new record since records began in 1992, while an extra 7,000 older workers aged 50 or over will become jobless.

After months of drift following his initial approach to the UN Security Council last September, Mahmoud Abbas, the president of the Palestinian Authority, said he was willing to risk American ire by once again placing the statehood issue in the international arena. Mr Abbas is to send a long-promised letter to Benjamin Netanyahu, the Israeli prime minister, next week setting out Palestinian demands for resuming peace talks, which have been frozen since September, 2010.

He is to call for a total freeze of Jewish settlement construction in the West Bank and East Jerusalem and the release of Palestinian prisoners. He will also request an Israeli acknowledgement that a future Palestinian state should be founded on territory Israel occupied in the Six Day War of 1967, with mutually agreed land swaps to allow Israel to annex some of the larger settlements it has built on occupied land.

The letter will be delivered in person to Mr Netanyahu by senior Palestinian officials, making it the most high-profile encounter between the two sides in more than two years. But the likelihood of it eliciting a positive Israeli response is slight. Mr Netanyahu has persistently refused Palestinian and international calls to halt settlement construction, prompting accusations that it has broken pledges made during earlier peace talks. Israel says it is willing to resume peace talks only if the Palestinians drop what it characterizes as "preconditions".

The tyrant has undergone several bouts of therapy in Asia in recent years. But his condition has now deteriorated and there were claims tonight that he has agreed to hand over power to his feared henchman and defence minister, Emmerson Mnangagwa. Rumours over Mugabe’s health have been rife in recent weeks because of his frail appearance. There was heightened speculation today when the Zimbabwe government postponed a cabinet meeting at the last minute.

The Tehran Times said the tyrant had entered into a ‘gentleman’s agreement’ to hand over power to 65-year-old Mnangagwa, who helped orchestrate the violent opposition to Britain in the 1970s. The former Zimbabwe intelligence chief was also widely blamed for the brutality following the 2008 presidential election after Mugabe’s rival, Morgan Tsvangirai, took an early lead in the voting.

Pumping from boreholes, Severn Trent plans to flow water from sources beneath Birmingham into the River Tame, which joins the Trent. The water will then flow to Gainsborough, Lincs, where Anglian Water will take it up. News of the plan emerged as Britain suffered an Easter washout, with widespread rain and wind. With winds hitting 50 mph in parts of the south of England, Wales suffered the wettest weather, with two inches falling in areas. Parts of the south-west of England experienced an inch-and-a-half.

The Met Office said that the rest of the week is likely to remain the same, with unsettled weather everywhere. Severn Trent is still in talks with Anglian and the Environment Agency about the amount and the cost of the trade, but hopes to make a start by June. A Severn Trent spokesman said: “These are extreme circumstances as far as water resources are concerned. Severn Trent has been talking for a long time about water trading, but this is the first situation where we have been able to put it into practice.”

The deployment of the second aircraft is "routine and not specific to any threat," stated Commander Amy Derrick-Frost of the Bahrain-based Fifth Fleet. The Enterprise and its strike group entered the fleet’s area of responsibility on April 3. Routine deployment or not, the times when the Persian Gulf has seen two US aircraft carriers operating in the region at the same time have been during wars: in the US-led invasion of Iraq in March 2003 and in supporting the wars in Iraq and Afghanistan in February 2007.

Officially, the nuclear-powered USS Enterprise and its warships are to join the strike group headed by the USS Abraham Lincoln, which is providing air support to the allied mission in Afghanistan. The two groups are also to boost anti-pirate efforts off Somalia’s coast in the Gulf of Aden, after which the USS Enterprise will be homeward bound to be decommissioned in autumn.

The two groups are also expected to put into effect Washington’s pledge to keep the Strait of Hormuz, a major oil traffic lane for Gulf exporters, open. Iran has repeatedly threatened to block the strategic strait in retaliation for recent international sanctions targeting its oil and economic sectors.

USS Enterprise strike group consists of: Carrier Air Wing 1; guided-missile cruiser USS Vicksburg; and Destroyer Squadron 2, comprised of guided-missile destroyers USS Nitze, USS Porter and USS James E Williams. Source: Official Website of the US Navy.

The Bank of Portugal said the use by domestic banks for the various facilities available from the ECB rose to €56.3 billion in March – up from €47.5 billion in February and greater than the previous record level of €49.1 billion in August 2010. Bailed out by the EU and International Monetary Fund in April 2011 for €78 billion, Portugal has €12 billion earmarked for bolstering its banks' capital positions if necessary in the months ahead.

The plight of Portugal's banks was revealed following the cash injection by the ECB in February when the central bank lent €529 billion to 800 banks across the eurozone through its long-term refinancing operation (LTRO). Portuguese banks were among those frozen out from the wholesale funding markets – where banks borrow from each other or professional investors – during the height of the eurozone crisis and as a result are among a number in the eurozone that utilise ECB funding.

A weak auction of Spanish government bonds last week – when some €2.5 billion rather than €3.5 billion were sold – was regarded as a sign that the initial confidence the ECB created through its injections of cheap cash was evaporating. New data on Monday showed that industrial production in Greece – the first eurozone country to receive a bailout – continued to fall in an economy already on track for its fifth consecutive year of recession. In February industrial production fell 8.3% on the year, after falling 6% in January and almost 12% in December.