Guardian Unlimited

Rockets rain down on towns that residents can neither defend nor leave, as Bashar al-Assad's forces besiege Free Syria Army

In the heartland of the uprising against Bashar al-Assad a grinding war of attrition has now become an unforgiving battle to the death.

The Free Syria Army has held this territory of orchards and farmland since September, during which time loyalist forces have never been closer, nor seemed more menacing. As rockets regularly thundered on Thursday into towns that residents could neither defend nor leave, the three months of freedom they had savoured now seemed illusory.

There is little left in the town in which the Guardian was based on Thursday, or in the equally deprived and forsaken villages that dot the hinterland near Homs. Electricity here was switched off two months ago, the phone lines were downed last week. And on Wednesday, contact by road was cut with Homs, Syria's besieged third city, whose fate is seen as a dire warning of what lies ahead for the rest of the area.

Homs was on Thursday a very difficult place from which to flee. Only three seriously wounded residents are known to have made it out of the devastated opposition held sectors of the city into the relative safety of nearby Lebanon. Two of the wounded are unlikely to survive.

The rest face a desperate plight, barricaded in concrete homes that are crumbling in the face of the relentless onslaught now spreading to nearby farmland and villages. Some residents of this town say a small number of families from the heaviest hit areas of Homs, Baba Amr and al-Khalidiyeh, have managed to hole up in other areas of the city. However they can no longer speak to those left behind, who they now fear face a gruesome fate.

"We'll be next," said a doctor at a makeshift medical centre in the heart of this town. The doctors and nurses on duty here had fled the state hospital, one kilometre away, and set up a triage centre and a surgical ward in a derelict house. All day they were tending to dead and seriously wounded men, many of them members of the badly outgunned rebel army.

The patterned plastic sheets the medics had placed on the floor were slick with blood and iodine as more and more war wounded were brought in by their colleagues.

One hulking man in military fatigue pants was carried in on a stretcher with a gaping wound in his navel. "He's a first lieutentant," said one of the clinic's nurses, Abdul Karem, who like everyone else in this overwrought hub, doubles as a revolutionary. The seriously wounded officer was taken to the improvised operating room, as nurses outside prepped themselves for surgery by washing their hands with kerosene and water.

Among those tending to him was an old French surgeon, a veteran of conflict zones dating back to the Vietnam war, who arrived in Syria on Thursday with a suitcase of medical supplies and a readiness to stay as long as he's needed.

The carnage of the rest of the day suggests he may be here awhile. Minutes after the lieutenant's treatment began, a truck screamed to a stop outside and Free Syria Army soldiers bellowed for a stretcher. The triage centre rapidly emptied, as the medics inside grabbed their flip flops ? one also reached for his Kalashnikov ? and hurried into the courtyard outside. They stopped next to the truck and looked inside and visibly stopped in their tracks. "Finished," one man said. "Take him to the graveyard." The dead man was a major, the leader of the Free Syria Army in this town, and one of many wounded by an attack on an outpost not far from here.

As night fell, the numbers of dead and wounded appeared to increase. Every massive boom in the near distance seemed to herald the arrival of more patients.

"There coming from the hospital that we ran away from," said one medic, Dr Qassem. "It's only a kilometre away."

Regime snipers were also wreaking havoc from a nearby intersection on the road to Homs. Opposition forces, meanwhile for the most part watched from hideouts in apricot and peach orchards and farm-houses dotted along muddy brown laneways.

More wounded were brought in, a rebel shot in the hand, another two with bullets in their back. The television showing footage of the carnage in Homs had by now been switched off as the triage room swarmed with walking wounded, frantic medics and others taking refuge from the shelling.

The first lieutenant inside was fading fast. As other surgeons piled the patient's intestines onto his stomach, Dr Qassem, who was holding a lamp over the operation said: "They are coming for us now. It is going to be very bad."

And then he added an optimistic note to a day that had so far offered nothing but misery. "The vote at the UN could be good for us in the future," he said. "All our students and doctors study in Russia and the standards are not good. "All our factories have Chinese equipment and it's the same thing. If we win, things will change, God willing."

He switched back to the dying patient as attention switched to the newest casualty, a man shot in the wrist, his blood streaming over shoes piled at the room entrance.

"There have been more than 100 people killed today," said one young university medical student as he held an x-ray machine over a patient lying prostrate on the floor. "We all have family in Homs and we are very worried about the situation there. It is much worse than here.

"Every day it has been getting worse here and there. No one is coming for us and we accept our fate."

Early in the day, a re-supply ? of sorts ? did arrive for the rebels; three sacks of rockets and rusting mortar tubes. They too were brought into the medical clinic and stored out of sight. It was hardly an arsenal to embolden a clearly struggling rebel army, but it was a sign that some weapons are finding their way across the porous Turkish and Lebanese borders.

"These are old," said one young fighter. "But they will do. We are grateful for everything that we get."

Plans being laid for call at Liberal Democrat spring conference for bill to be scrapped

The government's beleaguered health bill has run into fresh trouble after it emerged that plans are being laid for a call for it to be scrapped at the Liberal Democrat spring conference.

It is also expected that the influential Conservative Home website, seen as the voice of the party grassroots, will publish an editorial on Friday calling for the bill to be dropped altogether. It is understood that Conservative Home has been urged to make the call by three cabinet members who believe David Cameron is not listening on the issue. One source said: "We have almost been instructed to write this." It is extraordinary that cabinet members feel so frustrated at the political deadlock that they have resorted to urging Conservative Home to raise the flag of rebellion.

It has been widely canvassed within the government that non-contentious parts of the bill covering public health, social care and GP commissioning could be retained, while controversial parts dealing with an extension of the private sector could be abandoned altogether, something that would be a humiliation for the health secretary, Andrew Lansley.

Stephen Dorrell, Conservative chairman of the health select committee, has been one of many Tory MPs pointing out that many of the changes could have been implemented without the need for legislation or such controversy.

The shadow health secretary, Andy Burnham, has offered to strike a deal to bring in wider GP commissioning. Labour tabled a vote on Thursday to force the government to publish a report assessing the threats posed by proposed changes to NHS finances and patient care.

Senior Lib Dems have acknowledged that they are in a terrible place over the bill, but in discussions at the beginning of the week with Cameron, Nick Clegg agreed to let the bill continue in the Lords.

There is frustration in Downing Street that the support of health professionals has been lost after they were laboriously courted and consulted during the pause last year, agreed after the Lib Dems' spring conference voted to oppose large tracts of the bill. The current move is being organised by the same group of party activists.

The Lib Dem leadership managed to keep a second health rebellion off the agenda of the autumn conference, but will face intense grassroots pressure if it tries to prevent debate again.

An emergency motion can be kept off the floor of the conference if it is not deemed an emergency by the federal conference committee, or it is not selected for debate in a ballot of delegates.

It is being argued by diehards in the cabinet that the struggle to get the legislation on the statute book will last only a few more months and after that it will be shown that the warnings of the protesters were ridiculously overblown. Cameron is trying to resell the package as a way of reducing bureaucracy in the NHS.

In an effort to keep up the pressure, the shadow cabinet agreed to hold an opposition day debate later this month on making the risk assessment public, in what Burnham said would be a defining moment in the campaign to get the bill axed.

Critics believe the risk register, which Lansley has repeatedly refused to publish, contains damning warnings about rising costs and confusion. Concern has been heightened after it emerged on Wednesday that a risk assessment by the London NHS warned some organisations could fail financially and care, including maternity and children's services and public health, could suffer. Such is the anger about the register that nine Liberal Democrats are already among 50 MPs who have signed an early day motion also calling for it to be published ? and Labour believes more Lib Dems will support its move.

To put further pressure on the coalition, Burnham will urge Labour MPs to visit hospitals and surgeries during next week's half-term break, so they can recount their stories from the NHS front-line in the debate on 22 February. "The defining question in this debate now is, by pressing on and not listening, to what extent are they putting patient safety and quality of services at risk, and that's why the risk register becomes absolutely central to this," said Burnham.

Labour's move follows another torrid week for the government over the bill, with former supporters of the plans coming out against the current version ? which has had more than 1,000 amendments ? and the coalition's first defeat on the bill in the House of Lords on Wednesday.

Reflecting growing frustration inside the government at Lansley's handling of the bill, a Downing Street insider was quoted earlier this week saying the health secretary should be "taken out and shot". In response, the prime minister's spokesman said the Tory minister had David Cameron's "full support".

Lansley will face fresh embarrassment on Friday when a report by the right-of-centre thinktank Reform says the government's entire reform of public services is being undermined by the Department of Health's management of NHS changes.

The Scorecard report on 10 government departments with responsibility for different areas of public sector reform also singles out the prime minister for criticism for personally intervening with detailed promises on issues such as waiting times and nurses visiting patients' beds every hour. The criticisms by Reform will be particularly damaging because they accuse the health bill of causing exactly the opposite of what it is intended to achieve ? holding back reform of the NHS and damaging services for patients.

Burnham has offered the government a compromise, that in return for dropping the bill Labour would enter talks about how to introduce GP-led commissioning of healthcare, without the wider reform of the NHS structure proposed by the bill.

Leveson inquiry sees editor reject call to withdraw claim actor lied as Max Clifford says phone hacking a 'cancer' by a minority

The editor of the Daily Mail, Paul Dacre, refused to retract his accusations that the actor Hugh Grant had lied, during sometimes angry exchanges at the Leveson inquiry on Thursday.

Asked to apologise and withdraw his claim that Grant had made a "mendacious smear" against the Mail group, he said he would only do so if Grant withdrew his own statements attacking his papers.

He claimed: "Hugh Grant was obsessed by trying to drag the Daily Mail into another newspaper's scandal."

The veteran editor, asked to answer allegations that an article about Grant's love life might have been obtained by phone hacking, made plain his resentment that he was being subjected to further cross-examination. He repeatedly interrupted David Sherborne, counsel for Grant and other hacking victims, and talked across him.

Dacre described questions as irrelevant and at one point said loudly: "I'm not going to answer any more questions on that particular point." He had not studied one witness statement immediately before testifying, he said, because he had been busy "trying to edit my paper".

Despite the jousting, the editor-in-chief of Associated Newspapers shed no more light on the question of how one of his papers, the Mail on Sunday, came to publish a an article in 2007 containing allegations of a non-existent affair involving telephone messages between Grant and a "plummy-voiced woman".

Dacre accused Grant of bad faith, asserting he had subsequently produced evidence "out of a hat" suggesting the story must have been based on a misunderstanding of "flirtatious" late-night phone messages left by a film industry contact. Dacre said: "Hey presto! He conveniently remembers it!"

Dacre said he had been assured the tabloid's story had been obtained by legitimate methods. The paper's editor had told him that a reporter had explained that the story had come from a freelance, Sharon Feinstein, who in turn claimed to have got it "from a source in the Grant camp".

Lord Justice Leveson, who said he was determined to allow Grant's counsel to have a fair chance to put points to Dacre, told the editor that he would not make a finding of fact about what actually happened over the "plummy-voiced woman". His only concern was that Dacre had called Grant's testimony on oath "a mendacious smear". "He's deliberately lying! That's what it means!"

Dacre claimed that the opening testimony in the Leveson inquiry had made it "an extraordinary day ? a unique occasion". Grant was the "poster boy for the Hacked Off campaign" who had deliberately brought out his allegations. "He knew the damage it would cause."

Dacre had heard of Grant's testimony on the 4pm radio news while he was in a car and became angry because Grant had been previously put on notice by the Mail group's legal department that his repeated allegations of their involvement in phone hacking were not true.

"We felt we had to respond even more robustly," he said. "We needed to fight fire with fire." He told Leveson: "I don't think you understand the speed of 24-hour instant news."

Creditors demand to see action on new pledges as sovereign debt default looms in weeks if rescue package is withheld

Greece's hopes of promptly securing a ?130bn lifeline were set back early this morning after the finance ministers of the eurozone responded with scepticism to Athens's declaration that it is committed to slashing public spending to the bone under orders from the rest of Europe.

With the clock ticking on a possible sovereign debt default by Athens within weeks, eurozone finance ministers postponed a decision on Greece's rescue until next week, piling the pressure on the Papademos government.

Following weeks of brinkmanship that have poisoned relations between the bankrupt country and its eurozone creditors, the ministers and senior officials from the eurogroup, the European central bank, the European commission, and the International Monetary Fund voiced exasperation with Greek delaying tactics.

The meeting in Brussels declined to activate the bailout to prevent an outright Greek insolvency by the end of March when the country has to redeem more than ?14bn in debt.

The Greek finance minister, Evangelos Venizelos, left the Brussels meeting reportedly stating that his country now needed to decide whether or not to remain in the single currency.

Despite announcements earlier that the coalition government in Athens had yielded to savage new terms from the eurozone to qualify for the bailout, the eurozone finance ministers were unimpressed. The emphasis was on first getting Greece to deliver its side of the bargain.

"On the condition that the Greek parliament takes decisions on the prior actions over the coming days, then next week we can finalise decision on the overall package," said Olli Rehn, the European commissioner for monetary affairs.

"It's up to the Greek government by concrete actions through legislation and other actions to convince its European partners that the second [bailout] programme can be made to work."

Luxembourg's prime minister, Jean-Claude Juncker, the president of the eurogroup, said that the ministers would reconvene next week to review Athens's conduct and possibly sign off on the new rescue plan.

The Greek government still had to close a ?325m funding gap before it would qualify for a new bailout.

"Not everything that we need is on the table," said Juncker.

Earlier Venizelos had demanded a conclusion to the bailout saga, but ran into stiff reservations from the key creditor country, Germany. "We finally have a staff level agreement for a new, strong and credible programme," said Venizelos. "We also have a deal with the private creditors on the basic parameters. We now need the political endorsement of the Eurogroup for the final step."

Amid a mounting sense of despair over Greece, any deal that might be struck may already prove inadequate to its purpose.

With unemployment soaring in Greece, revenue sources drying up, recession deepening, and social unrest increasing, there is pessimism and resentment on both sides, a sense that the austerity cannot work, and that a default is more of a question of when, not if.

"Just because Greek leaders have agreed on targets does not mean that they will or indeed can be delivered," said Sony Kapoor of Re-Define, an economics thinktank in Brussels. "We have just reached a temporary truce. The war will continue to be fought for some time to come."

The ?130bn, even if agreed, is unlikely to be enough to achieve the goal of returning Greek debt to sustainable levels, given the country's deteriorating fiscal position.

Mario Draghi, the ECB's chief, and Christine Lagarde, the head of the IMF, attended the Brussels meeting of eurozone finance ministers. European commission sources said a signed memorandum committing the Greek government to a further ?3.3bn in savings ? which still has to go through parliament in Athens this weekend ? had to be delivered within five days to meet the tight deadlines for avoiding a Greek default. If a deal is struck on the new bailout, the IMF will need to rule that the arrangement will eventually render Greek debt levels sustainable.

Swagg Security publishes staff passwords online on the day campaigners around world demand ethically-made iPhone5

Apple's controversial Chinese supplier Foxconn was battling on Thursday to contain a security breach after hackers joined the mounting protest over iPhone factory conditions by leaking the login details of its entire staff.

A group calling itself Swagg Security taunted Terry Gou, the chief executive of Foxconn's parent company Hon Hai Industries, by posting his username and password along with a mass of other sensitive information on the PirateBay and Pastebin websites.

The hack, publicised in a series of Twitter alerts, came as campaigners delivered petitions demanding an ethically-made iPhone 5 ? the new model is expected later this year ? at Apple stores in London, New York, San Francisco, Sydney and Bangalore. The controversy could also marr the release of Apple's iPad 3, now expected in March.

More than 250,000 people have signed two petitions, organised by campaign platforms SumOfUs and Change.org.

"Everyone here is an avid Apple user, we just want to ensure those products are made in working conditions that are ethical and fair and safe," said the UK campaigns director of Change.org, Brie Rogers Lowery, who delivered four boxes of signatures to Apple's Regent Street store.

"Finding out about the conditions under which iPhones and iPads are produced makes me disturbed to own one. We are hoping to push Apple to set a precedent for other technology companies."

Media exposure of suicides, deaths from explosions, maimings and 16-hour shifts at the factories assembling Apple's electronics goods mean pressure is mounting for the world's most valuable listed company to improve conditions for workers at Foxconn and other suppliers.

Swagg Security took aim at Foxconn in an anonymous letter: "They say you got your employees all worked up, committing suicide 'n stuff ? Your not gonna' know what hit you by the time you finish this release. Your company gonna' crumble, and you deserve it."

The website 9to5Mac verified the leak, and said the passwords provided access to several Foxconn servers, most of them hosting intranet sites for company clients. "The passwords inside these files could allow individuals to make fraudulent orders under big companies like Microsoft, Apple, IBM, Intel, and Dell," Swagg Security claimed on its Pastebin page.

Foxconn responded by shutting down the compromised server and taking down a website detailing the services it provides to Apple and other clients including HP, Cisco, Acer and Sony.

Apple's chief executive, Tim Cook, who masterminded the company's supply chain before succeeding Steve Jobs at the head of the company, said last month he had never turned a blind eye to working conditions. Apple produced annual audits of its factories but last month appointed an independent group, the Fair Labour Association, to take over inspections.

Ministry's 'culture of over optimism' to blame for underestimating cost of 15 projects as well as delays, says committee of MPs

Britain's 15 biggest defence projects are expected to cost £6bn more than first estimated and will be delayed by a combined total of 26 years, a parliamentary watchdog reports today.

Too often the taxpayer has had to pick up the bill for the Ministry of Defence underestimating the risks involved in procuring complex weapons systems, the Commons public accounts committee (PAC) says.

The committee identifies three large projects bedevilled by long delays and huge overspend. These include the repeatedly delayed Nimrod maritime patrol aircraft, upon which £3.4bn was spent before it was scrapped, to save an estimated £1.9bn in running costs over the next 10 years.

The MoD will incur further costs from cancelling contracts and substituting alternative capabilities. The committee has asked the National Audit Office to investigate the decision to scrap Nimrod aircraft as well as all of Britain's Harrier jump-jets.

It also wants investigation of the delays surrounding the nuclear-powered Astute submarine fleet, which led to an extra £1.9bn in costs, and of the expenditure on two large aircraft carriers, the cost of which has so far risen by £2.8bn over the £3.5bn estimated when first approved in 2008. The PAC believes the carriers could end up costing as much as £12bn.

The report says that hurried attempts to save money have created problems for the future. "Decisions to save cash in the short term ? deferring spending and reducing equipment numbers ? have added significant long-term costs to the defence programme, and so represent poor value for money," it says.

It adds that last year's strategic defence and security review had to address the £42bn gap between the defence budget and forecast expenditure, including spending on the equipment programme. Since then there have been two more reviews, which have made further cuts in that programme in attempt to save further money.

Despite three reviews, Friday's report says, the MoD can say only that the defence budget is "broadly in balance".

The MPs comment: "It is unacceptable that the department still cannot identify the extent of the current gap between resources and expenditure."

They add that a culture of over-optimism continues at the ministry when it comes to costing projects. They point out that the financial burden incurred by underestimating project costs has fallen mainly on taxpayers, who have had to underwrite them.

The forecast for completion of the 15 largest defence projects increased by £466m last year alone.

Since the projects were first approved their estimated costs have risen by £6.1bn, bringing the combined total to about £60bn. Together, the projects are expected to be completed 322 months later than planned.

The PAC says the MoD's performance has improved, and that recent projects have had lower cost increases and fewer technical problems than earlier ones.

Today's report also points out that cutting equipment numbers after contracts have been signed usually represents poor value for money, as it invariably increases unit costs.

The MoD has recently decided to reduce the number of Puma and Chinook helicopters by four and 10 respectively, and it is buying three fewer European A400M transport aircraft. This reportedly has contributed to a 46% increase in the cost of each A400M plane.

Margaret Hodge MP, the Labour chair of the PAC, said: "Decisions to delay or cut programmes to save money in the short term continue to lead to increased costs in the longer term and do not represent good value for money."

She added: "We welcome the fact that there are signs of improvement. Projects approved since 2002 have shown significantly lower cost increases."

However, she said, the committee was concerned that the MoD was still unable to set out openly the extent of the gap between its income and expenditure, and how and by when it would balance this year's budget. "The department must publish that information urgently."

The MPs say that in light of current economic conditions it would be unrealistic for the MoD to plan spending on the assumption it will get a 1% increase in its equipment budget after 2015? a factor defence chiefs had been demanding.

Nine members of al-Qaida-inspired terror group planned to bomb the London exchange and set up a terrorist camp in Pakistan

Nine members of an al-Qaida-inspired terror group that plotted to bomb the London Stock Exchange and build a terrorist training camp have been jailed.

Three of the Islamist extremists, who planned to raise funds for the camp in Pakistan and recruit Britons to attend it, received indeterminate sentences for public protection at London's Woolwich crown court.

Mohammed Shahjahan, 27, was jailed for a minimum term of eight years and 10 months, while fellow Stoke-on-Trent-based radicals Usman Khan, 20, and Nazam Hussain, 26, were ordered to serve at least eight years behind bars.

The court heard that the trio planned to establish the terrorist camp on land in Pakistan-controlled Kashmir owned by Khan's family and encourage a "significant" number of British Muslims to undergo training there.

Khan and Hussain planned to travel to the camp and receive military instruction themselves before "obtaining first-hand terrorist experience in Kashmir", the hearing was told.

Passing sentence, the judge, Mr Justice Wilkie, said this was a "serious, long-term venture in terrorism" that could also have resulted in atrocities in Britain.

He noted: "It was envisaged by them all that ultimately they and the other recruits may return to the UK as trained and experienced terrorists available to perform terrorist attacks in this country."

The Stoke extremists talked about setting off pipe bombs in the toilets of pubs in their home town, the court heard.

The judge said the trio were more serious jihadists than their fellow defendants and observed that father-of-two Shahjahan was regarded as the "emir", or leader, of the group.

The four who plotted to plant a pipe bomb in the toilets of the London Stock Exchange all received extended sentences, meaning they will have to spend an extra five years on licence after they are freed from prison.

Mr Justice Wilkie jailed Abdul Miah, 25, from Cardiff, for 16 years and 10 months, noting that he was the leader of a branch of the terrorist network and set the agenda "by virtue of his maturity, criminal nous, experience and personality".

His brother, Gurukanth Desai, 30, from Cardiff, and Shah Rahman, 28, from east London, were jailed for 12 years, and Mohammed Chowdhury, 22, from east London, who was described as the lynchpin of the group, was sentenced to 13 years and eight months. He spoke about carrying out a "Mumbai-style" attack at the Houses of Parliament or the London Eye, the court heard.

And a handwritten target list found at Chowdhury's home listed the names and addresses of London Mayor Boris Johnson, the Dean of St Paul's Cathedral, two rabbis, the US embassy in London and the Stock Exchange.

Desai and Miah were bugged and were heard claiming that fewer than 100,000 Jews died in the Holocaust and talking about how Hitler had been on the same side as the Muslims because he understood that "the Jews were dangerous".

The judge noted that Chowdhury was a "compulsive self-publicist", Shah Rahman failed to impress the Cardiff members, Miah was "criminally experienced" but repeatedly failed to conceal his wrongdoing, and Desai was "very much subordinate" to his brother.

Omar Latif, 28, from Cardiff, was jailed for 10 years and four months, with an extended period on licence of another five years, for attending meetings with the intention of assisting others to prepare or commit acts of terrorism.

The judge said: "By his presence at those meetings he was contributing by encouraging the others to form the intention to commit those terrorist acts and to prepare for them."

Mohibur Rahman, 27, from Stoke-on-Trent, received a five-year prison sentence for possessing two copies of the online al-Qaida magazine Inspire for terrorist purposes.

The men - who are all British citizens apart from Bangladesh-born Chowdhury and Shah Rahman - have spent a total 408 days on remand and this will be deducted from their sentences.

OECD study finds countries that stream pupils into ability groups at an early age tend to have lower levels of achievement

Thousands of UK primary schools are locking their pupils into a cycle of disadvantage by separating them into ability groups, a major international study has warned.

The Organisation for Economic Co-operation and Development (OECD), a Paris-based thinktank, analysed successes and failures in education systems in 39 of the world's most developed nations.

It found that countries that divided pupils into ability groups at an early age tended to have higher numbers of school drop-outs and lower levels of achievement.

In the UK one in six pupils are divided according to their academic ability by the age of seven, according to a study conducted last year by the London University's Institute of Education.

Beatriz Pont, an education analyst and one of the authors of the OECD's study, said streaming by ability at an early age "fuelled a vicious cycle" in which teachers had low expectations of students in the lowest sets.

These students were often "locked into a lower educational environment before they had a chance to develop ? their potential," she said.

Her study ? Equity and Quality in Education: Supporting Disadvantaged Students and Schools ? found the most experienced and capable teachers often taught pupils in the highest sets.

Streaming by ability "exacerbates inequities" because immigrants and pupils from low-income families are more likely to be placed in low-ability groups, she said.

The UK and the US had the joint highest proportion of pupils in schools that divide according to ability at 99% each. Countries, such as Finland, that are well-known for their high-performing education systems, had a far lower proportion ? 58%.

Dividing pupils into ability groups was commonplace in the UK in the 1940s and early 1950s. By the early 1990s it had virtually disappeared because studies had shown it had no effect on overall attainment. It is gradually being re-introduced into UK schools.

The OECD study also shows the UK has a higher proportion of pupils with poor reading skills than our rival nations. In the UK, 18% of 15-year-olds do not have basic reading skills. This is average for OECD countries, but several countries have considerably lower proportions than we do. Finland, Norway and Sweden have 8%, 15% and 17% respectively, while Shanghai-China ? which have been grouped together for the purpose of the study ? only had 4%.

Almost a fifth ? 18% ? of 25 to 34-year-olds in the UK did not complete the last years of secondary school. In Canada, the US and Germany, the figures were 8%, 12% and 14% respectively.

The researchers showed that the UK is better than most of its rivals at managing to reduce the gap between pupils who are new to the country and those who are born here. The gap in reading skills is considerably more narrow in the UK than France, Germany and Finland.

A far higher proportion of pupils in UK schools opt for academic subjects, rather than vocational ones compared with most rich countries of the world, the study shows. In the UK, 69.5% of pupils in the last years of secondary school are on academic courses, while 30.5% are on vocational courses. This is the eighth lowest proportion on vocational courses of all countries. Across the OECD, the split between the two types of courses is almost equal, while in Germany, Austria and Finland a higher proportion of pupils are enrolled on vocational courses than academic ones.

Pont said that countries should strive to make academic and vocational courses equivalent. The study recommends countries improve their education systems by stopping pupils from re-taking a year, eliminating setting by ability and allocating funding according to students needs.

A spokesman from the Department for Education said it was for schools to decide how and when to group and set pupils by ability. "Research shows that when setting is done well, it can be an effective way to personalise teaching and learning to the differing needs of groups of pupils," he said.

"When setting is not based on accurate assessment of ability, or isn't used to adapt teaching to the needs of the group, then it can be divisive and limit pupils' aspirations."

Fears of renewed street violence after more than 48 hours of political turmoil since Mohamed Nasheed forced out of office

The future of Mohammed Nasheed, the first democratically-elected president of the Maldives, appeared increasingly bleak on Thursday after a criminal court on the island nation issued a warrant for his arrest.

Nasheed, who has been internationally recognised for his campaigns about global warming, was ousted earlier in the week by middle-ranking officers within the Maldives' military and mutinous policemen after pitched battles between factions in the centre of the capital, Male.

The exact details of the charges against him are unclear but the 44-year-old politician has told supporters that he "expected to be in jail tomorrow".

Paul Roberts, an aide, revealed that Nasheed had been ordered to resign by a meeting of army officers at the military headquarters on Tuesday.

"He refused to resign there and then so they took him to the presidential office and he wrote a letter there. They weren't actually pointing their guns at him but they were all armed and made it very clear they were prepared to use their weapons. It was a coup d'etat," said Roberts, who is in hiding.

Ahmed Naseem, foreign minister of the Maldives and a supporter of Nasheed, made an impassioned plea for foreign intervention. "We need them to help solve the issue of this illegal government that has come to power in a coup," Naseem said.

Scores were injured, some seriously, in violence on Wednesday night when police used teargas and baton charges to break up what witnesses said were peaceful marches by the ousted premier's supporters.

Casualties included senior politicians loyal to Nasheed. At least one remains in intensive car after being beaten and kicked. Many outlying areas also reported violence with police stations attacked.

On Thursday, Male and other cities appeared calm.

Western and local governments were scrambling to gain assurances from the new president of the country, the former vice-president Mohammed Waheed Hassan, that Nasheed, who took power in 2008, would be treated well.

In the Commons, William Hague, the foreign secretary, called on "the new leadership" of the Maldives "to establish its legitimacy with its own people and with the international community".

"We hope that the new leadership will demonstrate its respect for the rule of law, including peaceful demonstrations," Hague said.

John Rankin, the British high commissioner to Sri Lanka and the Maldives, said he was concerned for Nasheed. "We are concerned that no harm comes to him. If it did, it would be a matter of serious concern for us and the international community," Rankin said.

A senior American envoy will arrive in Male on Saturday. President Mahinda Rajapaksa of Sri Lanka has telephoned the new president and asked him to ensure the safety of his predecessor.

In contrast, India's prime minister, Manmohan Singh, wrote immediately to the Maldives' new ruler to convey his "warm felicitations".

Concerns remain that the power struggle will result in fresh violence. After more than 48 hours of political turmoil, the atmosphere in Male is "very very tense", one official said.

"If they arrest [Nasheed]. I don't know what will happen if they do. God help us," said Naseem, the former foreign minister.

However, it appears likely that the ousted president's probable strategy will be to contest elections due in 2013 rather than launch a campaign on the streets.

"The ballot should decide, not battles," Nasheed told reporters outside his home in Male. He appeared confident he would win.

Nasheed won the election in 2008 with 54% of the vote. Those polls ended 30 years of rule by Mamoun Abdul Gayoom, who had been repeatedly criticised by human rights groups.

Hassan has repeatedly denied that Nasheed was forced out and has called for a government of national unity.

Officials from Nasheed's Maldivian Democratic Party said they will not join any such administration and will campaign for the return of Nasheed to power.

Senior MDP officials accuse elements within the security forces loyal to Gayoom of engineering Nasheed's removal.

This week's events were the culmination of weeks of protests after a presidential order to the military to arrest a judge accused of blocking multimillion dollar corruption cases against members of Gayoom's government.

Nasheed, educated in the UK, was detained more than 25 times during the rule of Gayoom, earning the nickname "the Mandela of the Maldives". But he struggled to contain inflation and has been criticised by Islamist groups in the Maldives, where almost all 330,000 inhabitants are Sunni Muslim.

Events appear not to have had any impact on tourists in the luxury resorts of the archipelago.

Inter-Services Intelligence accused of kidnapping and torturing 11 men, four of whom have been found dead

Pakistan's all-powerful military will this week face a rare challenge by the courts over the case of 11 men who were allegedly abducted and tortured by the Inter-Services Intelligence spy agency .

The case, due to be heard on Friday, will offer a window into the workings of the ISI and its sister agency, Military Intelligence, and charges that they have made hundreds of Pakistanis disappear.

Four of the 11 men kidnapped from the high security Adiala jail in Rawalpindi in May 2010 have turned up dead in recent months. The families of the rest are petitioning the court for their return. Although apparently terrorist suspects, they have not been charged with any crime.

Before the hearing, the military stated in a written response to the court that they would not bring the remaining men before the judges, as had been ordered by the court, arguing that some were in such poor health that they could not be produced. Critics said this only confirmed the allegations of mistreatment.

The case is also a test for the supreme court, which is accused of pursuing a single-minded campaign against President Asif Zardari and his government, an agenda that plays into the hands of the military.

"This is a historic case. It is the first time the ISI has confessed to holding people," said Amina Janjua, chairperson of Defence of Human Rights, a group that campaigns for Pakistan's disappeared. "The courts are nothing in front of the agencies. The agencies think they are the masters. The ones who were killed did not die natural deaths. Their bodies were blue and black."

The intelligence agencies are allegedly responsible for over 1,000 disappearances since 2001, of whom about 500 are still missing, while in the western province of Baluchistan, dumped bodies of dissidents are regularly found.

Four of the remaining seven detainees in this case are now being held at the Lady Reading hospital in Peshawar, while the three others are being kept at a facility in Parachinar, a tribal area close to the Afghan border.

Abdul Qudoos, the brother of three of the detainees, said he believed they had been given "slow poison". In January this year his family received a phone call to pick up the body of one of his brothers, Abdur Saboor, 29, from an ambulance parked outside Peshawar. "His arms were as thin as sugar cane. Just a skull and skin left of him," said Qudoos.

Lawyers for the ISI told the court that those kept at the hospital were not in a condition to be produced before the court, while those held in Parachinar could be brought only after a "highly confidential" letter from the "internment authority" is considered by the court.

"The allegation of poison and torture, contained in the petition [from the families] is without any shred of evidence," the military's response said. "These are wild, diabolical and vicious allegations against a superior agency of the country."

The military claims that the men, who were ordered to be freed by the courts from Adiala jail, were abducted by people pretending to be intelligence agents and says that it rescued them during anti-Taliban operations in the tribal area.

"These men were in good condition. How did their health deteriorate?" said Inam ul Rahiem, a lawyer for the families.

According to the families, all the men were picked up by intelligence agents in late 2007 and early 2008 and abducted by the spy agencies a second time, from the jail. The men were all highly religious and many were associated with Islamabad's radical Red Mosque. Qudoos's brothers used to supply the mosque with copies of the Qur'an and other religious texts.

"The lies of the agencies have been exposed but they keep telling them," said Qudoos. "These private jails and torture cells, which are in every district, must be closed."

Swedish perk allows half of cost to be deducted, but No 10 insists no overnight change in policy

David Cameron is examining the idea of tax breaks for people who hire cleaning or other household services, as a way of generating extra jobs and freeing more women so they can join the workforce.

Speaking at a Nordic summit in Sweden, he said he was interested in its government's tax break that has been praised for reducing the black economy in cheap domestic labour.

The break, however, has proved hugely controversial in Sweden, leading to claims that it is regressive and class bound.

The Swedish government allows people to deduct from their tax bill half the cost of household services such as cleaning, cooking, lawn-mowing, snow-shovelling and babysitting. The concession is said to have created more than 5,000 jobs.

But social democrats have claimed that a relatively small group of wealthy Swedes, earning more than 50,000 kronor (£4,700) a month, are far more likely to make use of the subsidised services than lower paid households. And mainly immigrant labour has benefited, they say.

Of the nine countries at the summit, seven were outside the eurozone. Speaking after the meeting with Nordic leaders, Cameron said he had been inspired by the measures in those countries designed to boost women's participation in the labour force. "I think the importance of the flexible parental leave that many of the countries here already have, and we are looking to introduce, is absolutely vital. That point was made by a number of participants."

He also said he did not rule out introducing quotas for women in boardrooms as a last resort, but his preference was to see indicative targets. He said there was overwhelming evidence that companies were better run if men and women worked alongside each other.

"So the real nub of the issue is how do we accelerate, how do we fast-forward to having at least 30% of boards made up by women? That's where you get down to quotas, which I don't think you should ever rule out," he said. "If you can't get there in other ways, then maybe you have to have quotas." But he later clarified that he wanted to "go as far as we can on this agenda without taking that step".

Fredrik Reinfeldt, the Swedish prime minister, claimed at the summit that a male atmosphere created more risk and a greater chance of corruption. "To say the least, more women in the financial sector would be very good in bringing down the risk level."

His remarks took him close to the view of some feminists who claim the financial crash would never have happened had Lehman Brothers been Lehman Sisters.

Britain is working to implement the recommendations of a February 2011 report by Mervyn Davies concerned with increasing the number of women on company boards.

Women now account for 15% of directors of companies in the FTSE-100 index, up from 12.5% last year; and all-male boards in the FTSE, have dropped from 21 last year to 10 at present.

Cameron also discussed the need for workers to stay in the labour force for longer. He said: "I don't think anyone is saying you must work until you are 75. I think what we are all saying is that we need to have greater flexibility."

He said he was interested in a scheme in Norway where the state pension age rose automatically as people lived longer, and allows for a more flexible retirement.

Norwegians are free to choose the age at which they start to claim their pension, with higher payments to those who choose to wait the longest, up to 75.

But a Downing Street spokesman insisted Cameron was only exchanging policy ideas, and said nothing was going to be rushed into hard policy overnight.

Reinfeldt said the fact that the average global life expectancy has risen from around 46 years in 1950, to nearly 70 today ? and 80 in the EU ? has changed the premise for pension systems.

He singled out Iceland as a country that has managed to keep people in the work force longer. Prime minister Johanna Sigurdardottir is still working at 69, and the nation's average retirement age is 67.

Date set for WikiLeaks suspect's arraignment hearing amid continued questions over length of time he has been in custody

The formal trial stage in the case of the WikiLeaks suspect Bradley Manning will begin on February 23, the US military has announced, when the soldier will be arraigned on all 22 counts relating to the largest leak of state secrets in American history.

Manning will be transferred on that day from his current imprisonment at Fort Leavenworth in Kansas to Fort Meade in Maryland, where he will be read all the charges against him and asked to give his plea. It will be the first occasion that he has come in front of a military judge representing the full power of the court martial system.

In most cases, the arraignment is a short and routine hearing that marks the accused's official bringing to trial. In Manning's case, however, it presents his trial lawyer David Coombs with the opportunity to raise objections to the conduct of the prosecution against his client.

In particular, Coombs has the option to complain about the exceptional length of time that Manning has been languishing in military jail. Under the US constitution, court martial cases must be brought within 120 days of charges being preferred against a suspect.

The military rule book, under rule 707 for speedy trial, makes clear that military justice must be dispensed quickly. It says that in some circumstances, delays may be prejudicial to the accused and may result in dismissal of the case.

A military spokesperson said that Manning's 120 days, known as his "speedy trial clock", began on 29 May 2010, yet he has continued to be held at the brig at Quantico marine base in Virginia and latterly at Fort Leavenworth for months beyond the deadline. The extra time taken to come to trial was due, the spokesperson said, to requests by Manning's own defence team and the period in which classified documents were being handled.

"Offenses ordinarily should be disposed of promptly to serve the interests of good order and discipline. Priority shall be given to persons in arrest or confinement."

Against that, the rule book allows for delays in exceptional circumstances, that can include a request by the defence for more time to prepare their case, delays relating to the mental capacity of the accused, and time needed to obtain security clearance for classified documents. Security clearance has been cited by the military authorities as an explanation for the delays that will see Manning spend almost two years in custody before his court martial begins.

The intelligence analyst was arrested in Iraq on May 26 2010 under suspicion of having leaked hundreds of thousands of secret documents and videos to the whistleblower website WikiLeaks.

It is not known whether Coombs intends to make the delayed proceedings an issue at the arraingment. But under the terms of the rule book, he has the right to lodge a motion to dismiss the case.

The burden would then fall on the military prosecutors to prove to the court that the delays were reasonable under army law.

Jeff Patterson, a leading member of the US branch of the Bradley Manning support network, said that the official opening of the trial stage would finally allow the defence to raise serious complaints about the process so far in front of a fully-designated military judge. "We hope that the real issues of this case ? Manning's torture in Quantico, unlawful command influence, and the real and largely positive influence the documents had around the world ? will now be properly addressed."

The alleged "unlawful command influence" refers to a comment by Barack Obama, commander in chief of the US military, who implied that Manning was guilty thus arguably prejudicing his fair trial.

Manning's charges include: aiding the enemy; wrongfully causing intelligence to be published on the internet knowing that it is accessible to the enemy; theft of public property or records; transmitting defense information; and fraud and related activity in connection with computers. If convicted he faces life in military custody.

Supporters protest in Madrid after Spanish human rights champion barred for 11 years over illegal recordings of lawyers

To the victims of human rights criminals he was a crusading knight fearlessly wielding the sword of justice wherever it was needed across the globe. Now Judge Baltasar Garzón, the Spanish magistrate who pursued dictators, terrorists and drug barons, has himself been condemned in a remarkable court verdict that claims he behaved like the totalitarian regimes he famously pursued.

Garzón's career effectively came to a dramatic end on Thursday as he began an 11-year suspension for illegally wiretapping conversations between remand prisoners and their lawyers in a corruption case involving the prime minister, Mariano Rajoy's People's party (PP).

The furious reaction of Garzón's supporters and the euphoria of his enemies revealed bitter divisions over a man who first landed himself in trouble by investigating the abuses of Spain's former dictator, General Francisco Franco.

As his supporters gathered to demonstrate in Puerta del Sol square in central Madrid on Thursday evening, many claimed there was a conspiracy to bring down one of the world's best-known human rights investigators. They pointed to the unprecedented coincidence of a Spanish investigating magistrate being tried in three different cases of alleged abuse of authority at the same time.

"It was clear they were out to get him, and now they have," said Emilio Silva, head of the Historical Memory Association that campaigns to shed light on Francoist killings. "It is very sad. Plenty of other judges have committed the same irregularities and have not been treated this way."

"I cannot accept this," said Gaspar Llamazares, a deputy for the United Left party. Francisco Jorquera, a deputy for the Galician National Block party, claimed the sentence was a public lynching and proof of a vendetta against Garzón.

Reed Brody of Human Rights Watch said: "It looks like Garzón's enemies got what they wanted ? the criminal prosecution of a judge for his judicial actions undermines the independence of the judiciary. The accumulation of charges against him raise the appearance that they have been brought in revenge for his handling of cases involving vested interests."

That he should be banned for investigating the sort of corruption that brought the country's indignados, or indignant ones, on to the streets in protest last year only added insult to the injury felt by some. The guilty verdict against Garzón, they pointed out, made him one of the first people to be punished in the long-running Gürtel case involving corruption in the PP regional governments of Valencia and Madrid.

The case alleges public money was siphoned off by PP politicians and crooked businessmen during, among numerous other cases, a visit to Spain by Pope Benedict. "Garzón has become the first victim of the Gürtel clan," the Garzón solidarity group, which called Thursday's protests, said.

Critics rejoiced at the downfall of a man they saw as vain, media-loving, transparently leftwing and a loose cannon in the Spanish judicial system.

"This puts things in their place," said José Antono Choclán, one of the lawyers.

"The judge stuck a finger up at our constitution, which ensures that all Spaniards have the same rights at trial," said Agapito Maestre on the rightwing Libertad Digital blog.

"It was about time," said Carlos Rodríguez in a fierce Twitter debate between supporters and detractors. "He thought he was Superman."

PP politicians struggled to hide their joy at the demise of a judge who, despite a stormy relationship with the Socialist party that once made him a parliamentary deputy, they felt was out to get them. "It is a happy day for the rule of law," said Esperanza Aguirre, the PP president of the Madrid regional government.

Even Garzón's supporters recognised he may have overstepped the mark by recording the conversations as he attempted to prove some lawyers were involved in money laundering, but they said the punishment was excessive.

"They could easily have come to the opposite conclusion," said José Antonio Martín Pallín, an emeritus supreme court magistrate. "This was an important investigation into organised crime and corruption."

Pallin pointed out that a second magistrate had ordered that the wiretaps continue. "If they were to be rigorous [in their logic], they would go after the other magistrate too," he said.

Garzón claimed he had put into place measures to safeguard the right of suspects to prepare their defence in private.

State attorneys had backed Garzón at his trial, saying investigating magistrates in other cases had made similar orders without facing charges.

But the supreme court said Garzón not only illegally wiretapped the prisoners' conversations but committed a second crime by doing so in the full knowledge that he was breaking the law.

"We shall carry on fighting, carry on appealing. We have a long road ahead, but I believe both he and I are more than strong enough," Garzón's lawyer, Javier Baena, said after the verdict.

Garzón cannot appeal in a Spanish court, despite European Union insistence that this right should be available to everyone. He has previously said that he will take his case to the European court of human rights in Strasbourg if he has to.

The 56-year-old judge, best known for his groundbreaking use of international human rights law when he ordered the 1998 arrest of Chile's former dictator Augusto Pinochet, must also pay a ?2,500 fine. That money reportedly goes to those at the centre of the Gürtel case.

Wang Lijun's visit to US consulate triggers speculation of political power struggle with local party chief tipped for Beijing promotion

The Chinese police chief at the heart of an unfolding political drama is under investigation after spending a day at a US consulate, state media has reported, following widespread speculation that he attempted to defect.

The terse, one-line statement about Wang Lijun from official news agency Xinhua - issued at around 11pm Beijing time on Thursday? came one day after the announcement that he was receiving "vacation-style treatment" owing to stress.

The fall from grace of Chongqing's vice-mayor and former police boss has triggered intense speculation of a political struggle because of his close ties to the city's ambitious party secretary, Bo Xilai, who had been tipped for promotion when a new generation of leaders takes power this year.

Wang's transfer to non-police duties last week led to suggestions that the two men had fallen out amid a possible corruption investigation.

Asked about Wang on Thursday, a top Chinese diplomat said it was an "isolated incident" and had been "resolved quite smoothly", AP reported.

Vice-minister Cui Tiankai, who was briefing reporters on the vice-president Xi Jinping's trip to the US next week, said it would not affect that visit.

American officials had already confirmed that Wang had visited the US consulate in Chengdu, which was surrounded by scores of Chinese police on Tuesday.

A US state department spokeswoman, Victoria Nuland, told reporters in Washington: "Wang Lijun did request a meeting at the US consulate general in Chengdu earlier this week in his capacity as vice-mayor.

"The meeting was scheduled, our folks met with him, he did visit the consulate and he later left the consulate of his own volition ? Obviously, we don't talk about issues having to do with refugee status, asylum."

She added that to her knowledge, the consulate had not been in contact with Wang since then.

The South China Morning Post cited claims that Wang had since been flown to Beijing.

Wang, 52, began his career as a traffic police officer but soon rose through the ranks, earning a reputation as a gang buster ? and, according to Chinese media reports, a 6m yuan (£600,000) price on his head from enraged triads.

Beijing based political analyst Russell Leigh Moses noted several pointed remarks from Bo recently, attacking people who blew their own horns, which might easily be taken as directed at Wang.

"Perhaps Wang saw himself as a political alternative to Bo should the latter leave for Beijing and his sudden departure was the result of being told that outcome was impossible.

"Was Wang concerned enough about his own future?at the hands of his political adversaries or the enemies in the underworld he was fighting ? that he thought political asylum...offered his best protection against retaliation?" he wrote in an article for the Wall Street Journal website.

"Or did Wang have no intention of fleeing the country in the first place? Was he instead trying to signal others that he had something that threatened to bring down the political temple that Bo has built?"

While the party secretary's charismatic style and energetic leadership has won him many admirers, others in the party are said to be alarmed by his ambition. Observers suggest the fallout from events in Chongqing could recast the broader political outlook, potentially to the benefit of liberals alarmed by what they see as Bo's leftist tendencies.

"The first shiv was squarely stuck into flamboyant Chongqing party secretary Bo Xilai," wrote Arthur Kroeber of the Beijing research firm Gavekal-Dragonomics.

But Kerry Brown, head of the Asia programme at the Chatham House thinktank, said: "It's an incredibly risky time to mandate this kind of swoop on anyone ? for everyone, not just for Bo. The party cannot have these scraps with themselves as the time towards the leadership [changes] goes by. If anything, I think the hands of people have been forced.

"He's got enemies and this plays into their hands ? [But] there are other ways to deal with Bo's potential leadership than this way, which is pretty noisy."

It is widely assumed that Xi will become general secretary and president of China, with Li Keqiang taking over as vice-president. But in a system of collective leadership, the composition of the full standing committee is crucial and analysts have warned that competition for places is fierce.

"The growing openness of self-promotion campaigns by some of these ambitious politicians, their idiosyncratic initiatives and policy interests, and their respective strengths and weaknesses have made this upcoming political succession a particularly challenging one for the [Communist party] leadership," wrote the Brookings Institute analyst Cheng Li in a recent paper.

A box-office hit in its native Australia, Red Dog is the tale of the legendary pooch who embodied the country's outback spirit ? and has a made a star of its canine lead, Koko

Australia's hottest movie star fixes me with his soulful brown eyes and greets me with a firm lick on the hand. Then, with a clack-clack of claws on the wooden floor of his airy home, Koko shows me through to the kitchen. For the next 20 minutes, the six-year-old star of Red Dog embarks on an impressive charm offensive, gazing up charismatically and fixing a gimlet eye on the bowl of cashew nuts placed before us.

Koko, a red cloud kelpie, has been the surprise breakout talent of 2011 in Australia. The underdog project to adapt Louis de Bernières's book about a real dog that breathed life into a desolate mining town, took $21.3m (£13.4m) at the Australian box office last year, putting Red Dog among the 10 highest grossing Australian films of all time alongside Moulin Rouge and Strictly Ballroom. As with Uggie, the Jack Russell star of The Artist, and the equine heroes of War Horse, the canine lead in Red Dog does not suffer the indignity of having his features contorted by CGI. Red Dog may not talk but he and his film make an eloquent statement about the power of stories.

"It is about this outback community that was brought together by a dog," says Nelson Woss, Red Dog's producer. "And we were this film crew in a remote location that was brought together by the same dog." In fact, Woss enjoyed working with his leading man so much that he adopted him. When not trotting down red carpets together, the pair now reside in Perth, Western Australia. Koko enjoys frequent walks in the park, where the only concession to his stardom is a special ramp that enables him to easily disembark from Woss's 4x4.

The against-the-odds making of Red Dog began when Woss read a review of de Bernières's book on a flight back from LA, where Woss produced films including Ned Kelly, the retelling of another popular Australian legend. Woss beat off interest from DreamWorks to get the film rights to Red Dog, with de Bernières apparently persuaded by the producer's vision of a local film shot in the Pilbara, the remote north-west corner of Australia where the real Red Dog lived.

Kriv Stenders, the director, describes it as "a story about stories, a folk tale celebrating that very Australian tradition of the yarn". Like Waltzing Matilda and other outback tales, Red Dog also features tragedy. As de Bernières's deceptively simple novella showed, Red Dog became a powerful founding story for the tough towns that grew up around the hardscrabble mines of the 1970s. Red Dog was simply a dog without a particular home who was adopted by the miners. He earned the nickname "the Pilbara wanderer" because he would hitch rides with truckers for hundreds of miles but always return to his favourite seat on the miners' bus. He became a member of local clubs and was even given his own bank account. Like many miners, the dog was gregarious but also self-sufficient and solitary. He appeared to be searching for something, although no one quite knew what.

The making of Red Dog was an unorthodox undertaking from the very beginning. Woss started with a dog, buying Koko from a breeder two and a half years before filming began, and getting him trained by Luke Hura, a protege of Karl Miller, the legendary Hollywood animal trainer who worked with the stars of Babe. The film's American lead, Josh Lucas, drove himself through the outback for five days to get to the shoot, where Woss, in "guerrilla fashion", managed to cadge several helicopters and a mile-long train from a mining company for a week. "That's a big toy to play with," smiles Woss, who is described by Stenders as the kind of producer who "could sell snow to the Eskimos and finds money under a rock".

And so a meagre budget was able to produce a film with the sweep and zest of Danny Boyle. There were still some hitches, however. After a year of expert training, it appeared that Koko had learned very little. It took three weeks for the dog to master a short scene in which Red Dog pushes a woman off "his" seat on the miners' bus. Luckily, the dog (and his two doggy-doubles) came good during the eight-week shoot. Another problem was Stenders being allergic to dogs: the director had to struggle through the shoot with a lot of antihistamines and a no-touching policy for his leading canine.

True to the spirit of the 70s, when the film is set, Stenders resisted CGI and instead shot real dogs doing real things (with one exception, when Red Dog meets his nemesis, Red Cat). "We wanted to go back to the old-fashioned dog movie ? Lassie and Benji," says Stenders. "Red Dog is just a dog. He doesn't do anything remarkable. The film is about people and the lives this dog changes. He's a very wise observer who sees the world in a very laconic way. He's a very Australian character." Stenders previously made grungy urban films such as Boxing Day, about a father who takes his family hostage. How did he direct a dog? "Just like you would an actor," he says. "They are personalities. They have their idiosyncrasies. You are dealing with a soul, a living, breathing thing."

Stenders was relieved they stuck with the decision to make it a period piece, complete with an excellent 70s soundtrack. "You can't fuck with the legend. There is an innocence about the 70s that is very evocative and unique." Woss likens Red Dog to feel-good Australian classics such as Muriel's Wedding and both he and Stenders were inspired by Wake in Fright, a cult and very unnerving film about the outback. Red Dog is rather more comforting in its nostalgic portrayal of the beginnings of the modern mining boom, the rarely seen industry upon which Australia's current economic success is based. With its dry wit, the film casts these vital but enormously destructive industries in an appealingly human light. Stenders admits it is a "celebration" of the birth of that industry. "When you are up there you realise that this is the heartbeat of Australia. It's very sobering to see the infrastructure and scale of it," he says. The film also showcases the lunar-like landscape of the Pilbara ? usually completely overlooked by tourists ? with its red rock and enormous cargo ships sitting in crystal clear turquoise water. "It's so starkly beautiful it's overwhelming," says Stenders. "You couldn't come up with anything as graphic as that with CGI. You can't help but make it look beautiful because it's stunning. You see man-made industry dwarfed by this amazing landscape."

Australians have good cause to celebrate the miners who have made them rich but another reason Red Dog has attained such mythical status is the dog's egalitarian qualities. Back in the 70s, there was a proposal to erect a statue of William Dampier, the English explorer who landed in north-west Australia in 1699. Dampier swiftly disappeared again after sniffily concluding there were "too many flies" and, as the film relays, the miners argue that Red Dog should be honoured instead. "We should have somebody who understands this place, who lives and breathes this vastness, this desolation. Somebody who has red dust up their nostrils. And their arsehole," says one of the miners in the film. Australians approve of Red Dog: "It doesn't matter where you are from in the world or what echelons of society you were born into, Red Dog got on with you the same," explains Woss, when we take Koko for a walk.

Woss sees a lot of Red Dog in Koko. "Love the one you're with, that's Koko, and to some extent that was the same with Red Dog too," he says. "He's a very smart, independent dog and he has a mind of his own." Dogs are supposed to be on leads in the park "but Koko doesn't like leads", waves Woss airily, as his leading man trots along, breaking into a desultory dash to see off a couple of crows.

Later that night, I meet Koko again at a screening of Red Dog in Perth. He looks perfectly relaxed when he is recognised in the street and yet, like the biggest Hollywood stars, there is a sheen of distance about him ? he is perfectly polite, but floats above the fawning of those around him. Like a middle-aged heartthrob, Koko has a graceful grey grizzle around the mouth now, and Woss says his leading man will not take on any more films. "He quite likes his retirement," says Woss. "When he does promotional events, people want him to do tricks and that so isn't cool."

Red Dog is released on 24 February.