Taxpayers face paying extra £17bn to boost IMF

Britain looks set to be asked to commit more money to the International Monetary Fund (IMF) after the global organisation confirmed it was planning to raise an additional $500 billion (£324bn) to shore up ailing economies.

The announcement sparked warnings of a possible rebellion by government back-benchers, unhappy at the prospect of British taxpayers being asked to underwrite lending to eurozone countries struggling to cope with their debts.

The UK is currently liable for 4.5 per cent of the IMF’s $400bn (£259bn) lending capacity, leading to speculation that the planned increase would mean an additional British liability of around £17bn.

But Treasury sources said it would be misleading to put a figure on any possible additional contribution, stressing that talks were only at a preliminary stage and the IMF had put no firm proposals on the table.

Parliament has already approved around £40bn in support for the IMF, of which about £30bn is committed. Any new request going beyond the £10bn “headroom” available to Chancellor George Osborne would have to be approved by MPs.

Downing Street confirmed that Mr Osborne was ready to put any “decent” request from the IMF to MPs. But Prime Minister David Cameron made clear that any increase in UK funding would have to be designed to assist struggling countries and not to bail-out the euro.

Mr Cameron said: “We believe the IMF must always lend to countries, not to currencies. We would only act if that was with others, not just as part of a eurozone measure.”

Asked if Britain should give more money to the IMF, Mayor of London Boris Johnson said: “Everybody understands that the euro problem needs a resolution. It’s my belief that that won’t be achieved by endlessly bubble-gumming the thing together and that some kind of orderly readjustment is necessary.”