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Administrators pullout leaves Borders in chaos

Accountants BDO Stoy Hayward cite 'a conflict' over taking control of the book chain

The future of Borders was plunged into fresh uncertainty today when the administrators lined up to take control of the troubled book chain pulled out.

The high court had been expected to confirm BDO Stoy Hayward as administrators later today, but in an unusual move the firm revealed that "a conflict" meant it could not take on the task of rescuing the company. A spokeswoman for BDO refused to say what the conflict was, adding that it had "robust and thorough processes" to assess the risk of taking on such work.

Borders's future has been uncertain for several days since it emerged that a deal to sell some stores to WH Smith had probably collapsed. On Tuesday it suspended orders on its website.

Borders runs 45 stores in the UK employing about 1,100 people. Since July it has been owned by Valco Capital Partners, part of Hilco, which specialises in distressed retailers. On Monday a court in Manchester granted Valco's request to start the process of naming BDO as administrators.

Without selling some stores to WH Smith, it is unclear whether Borders, also owns the Books Etc chain, which it is closing down, has enough money to trade through Christmas. Anyone visiting borders.co.uk in the hope of ordering a book receives the message: "Sorry, title cannot be purchased." Two major publishers, Random House and Hachette UK, have stopped selling directly to Borders.

HMV, which owns Waterstone's, has been named as a potential buyer of some Borders stores. However it is understood to only be interested in a few outlets.

Borders's accounts show the company made a loss of £13.6m in 2008, up from £10.3m in 2007. Its auditor, Ernst & Young, raised doubts about its ability to continue as a going concern.

German army chief quits over Afghan air strike

Wolfgang Schneiderhan quits as defence ministry accused of withholding information about civilian casualties in Nato bombing

Germany's top army officer resigned today after it emerged that the defence ministry had withheld information about civilian casualties caused by a Nato air strike in Afghanistan.

The resignation of Wolfgang Schneiderhan, the Bundeswehr's chief of staff, amounts to an admission by the defence ministry that it suppressed information about civilian casualties following the September bombing which killed scores of civilians.

Schneiderhan's resignation was announced by Germany's new defence minister Karl-Theodor zu Guttenberg during a parliamentary debate.

According to Nato information, 142 insurgents and civilians were killed when the Bundeswehr called in US bombers to attack two oil tankers which had been seized by the Taliban in the northern Afghan province of Kunduz.

The then defence minister, Franz Josef Jung, initially dismissed reports that civilians had been among the victims, claiming that only insurgents had been killed.

But following a report this morning in the tabloid Bild, the defence ministry confirmed that on the day of the attack Jung received a top-secret video and an extensive Bundeswehr report containing details of the casualties, including eyewitness descriptions of wounded children, dead teenagers and "six patients between the ages of 10 to 20" who were being treated by doctors in Kunduz.

Days after the attack, Jung told parliament that Colonel Georg Klein, who ordered the strikes, had done so via the proper channels, despite a Nato report saying that the order had been based on flimsy evidence including blurred video images and statements from an informant who was not considered reliable.

This morning Guttenberg criticised the previous government for not passing on all the "relevant information" to him.

Jung, who is now labour minister, sought to defend himself today. "I said clearly right from the start, notably on 6 September, that we could not rule out that there had been civilian casualties," he said,

Germany has around 4,500 troops in Afghanistan in a mission that has become ever more unpopular at home as the dangers in the region have increased.

Water companies told to cut bills

Ofwat decides average household bill will stay broadly flat at around £340 a year as record £22bn investment programme is announced

Water watchdog Ofwat pulled back from deep cuts in household bills today in its final decision on prices for the next five years.

The regulator is now calling for a much smaller £3 cut in average bills to £340 before inflation for the 2010-15 period – compared with the £14 reduction put forward in July.

Ofwat said its decision to leave prices broadly flat still meant bills would be £34 or 10% lower on average than under plans submitted by water companies.

Whether bills rise or fall will depend on where customers live. Customers of Essex and Southern Water will face the biggest jump in prices – 13% over the period – with Bristol Water's bills up 7%.

The UK's biggest water company, Thames Water, will be allowed to raise prices by 3% compared with Ofwat's initial call for flat prices from the firm.

In other areas, customers of Anglian Water and Welsh Water will see price cuts of 7% over the five-year period.

The Consumer Council for Water gave Ofwat's final decision "seven out of 10" and said the regulator's original price cutting plans were "arguably unrealistic".

Chair Dame Yve Buckland said: "Even though prices are generally flat, there is still an issue of affordability for many water customers.

"When we ask them 'are your water bills affordable?' one in five customers tells us no. We are concerned that this reduction in prices still isn't sufficient to solve the problem, so we will continue to press government to provide better support for such households."

But Ofwat chief executive Regina Finn said: "Customers have told us that they want us to keep water and sewage charges flat while maintaining a safe, reliable supply of water. That's what we've delivered.

"There's more to this than just low bills, it's about what customers get for their money. We've scrutinised every pound in the companies' plans to make sure they deliver what customers want."

Ofwat's decision to keep bills largely flat comes as the regulator unveiled a record £22bn programme of investment in the network – about £935 for every property in England and Wales.

The bulk of this money – £12.9bn – will be pumped in to maintain and replace assets from pipes to water treatment works. There will also be £1.1bn earmarked to help prevent sewer flooding.

But shares in major listed water companies United Utilities, Severn Trent and Northumbrian Water all rose on a poor day for the wider market as investors reacted to an easier settlement.

Since Ofwat's initial decision in July, water companies have had a chance to plead their own cases with the regulator. The industry argues it should be allowed to make a fair return to encourage the outside funds needed to spend on the network.

If firms are forced to cut dividends – or even raise money by tapping shareholders – investors could be scared away and improvements to the network threatened, water companies have said.

Pamela Taylor, chief executive of industry body Water UK, said firms could be forced to cut work such as fixing leaks if the funding proved inadequate. "It is quite possible that companies will have to adjust or stop their leakage programmes. That is what they will be looking at.

"They will need to look at a whole raft of things, not just that. The quality of drinking water, their legal obligations. They will need to make sure they can fulfil those legal obligations," she said.

The Institution of Civil Engineers added: "Water companies will need to invest heavily in maintaining, upgrading and building new infrastructure in coming years if we are to meet growing demand, while always ensuring best value for the consumer.

"We have seen what happens when key infrastructure fails over the last few days, with hundreds of people without water or power in Cumbria."

Portsmouth appoint Grant manager

• Grant's first game will be against Manchester United
• Chief executive says he was the 'logical choice'

Portsmouth have confirmed that Avram Grant will be the club's new manager, as predicted in the Guardian today. The former Chelsea manager has been granted a work permit and his first match in charge will be the club's home game against Manchester United on Saturday.

"Avram is a very experienced and respected manager who has managed at the highest level. The board believes he is the man to help steer the club out of the relegation zone," said Portsmouth's chief executive, Peter Storrie.

"He knows the club, the players and the set-up at Fratton Park, so it was the logical move to make him the next manager, once the board had decided to relieve Paul Hart of the role. He will take charge of training on Friday alongside first-team coaches Paul Groves and Ian Woan."

Grant will still, technically, be the Portsmouth director of football for Saturday's game. However, the club will then apply to the Football Association to change his permit status to manager. Grant spent the 2006-07 season as Portsmouth's technical director before he joined Chelsea as director of football.

Following José Mourinho's departure from Stamford Bridge, he guided Chelsea to the 2008 Champions League final but was sacked after the defeat by Manchester United. He rejoined Portsmouth in October.

Telegraph appoints new editor

Telegraph Media Group editor in chief Will Lewis to launch and manage new digital division, Tony Gallagher to edit daily paper

The Telegraph Media Group's editor in chief, Will Lewis, was today promoted to launch and manage a new digital division at the company, while Daily Telegraph deputy editor Tony Gallagher was promoted to editor.

Lewis will set up and run the new digital division, an "entrepreneurial unit" which will have a staff of 50 and be based in Euston, away from the company's main office in Victoria. As managing director, digital, he will also oversee TMG's existing digital businesses.

He will also remain editor in chief of the Telegraph titles and website and will continue to report to the chief executive, Murdoch MacLennan.

MacLennan said the new venture would "fast-forward to the next stage of our digital transformation" and would use the Telegraph brand to "capitalise on cutting-edge ideas, driving new revenue streams by better serving our customers".

Lewis added: "It is a tribute to our chairman, Aidan Barclay, and the Barclay family that they have invested millions of pounds in this exciting venture, which will help us rapidly expand our digital operations."

The appointment will increase speculation that Lewis will take over from MacLennan when the latter retires in the next few years.

TMG, a wholly owned subsidiary of Press Holdings, owned by Sir David and Sir Frederick Barclay, also said today its 2009 profit was expected to be ahead of its 2008 result.

Gallagher has spent much of the year editing the Daily Telegraph while Lewis went on the advanced management programme in Harvard. He joined the paper in 2006 as executive head of news from the Daily Mail. He became deputy editor in 2007.

Benedict Brogan, the Daily Telegraph chief political commentator and associate editor, has been appointed deputy editor.

Gallagher, who Lewis described as an "excellent" deputy, and Sunday Telegraph editor Ian MacGregor will continue to report to Lewis. Mark Skipworth remains executive editor, overseeing the Saturday edition. Chris Evans, executive head of news, becomes Gallagher's number three.

Lewis was appointed editor of the Daily Telegraph in 2006 and then TMG editor-in-chief the following year. He joined the paper in August 2005 as business editor.

In August 2006, Lewis was promoted to the specially created role of managing director editorial.

"I am delighted that Will has taken up this vital challenge. For the last three years, he has done a first-class job editing the Daily Telegraph while successfully integrating our print and digital editorial operations. Will also orchestrated undoubtedly the biggest story of the decade: our highlighting of the systematic abuse of MPs' expenses," said MacLennan.

Earlier this year the Telegraph papers dominated the news agenda with a string of exclusives on MPs' expenses, which led to them selling more than 1 million extra copies after the story broke on 8 May.

According to one TMG source, Gallagher "made his reputation" by his marshalling of the paper's reporting resources to cover the scandal, which has led to files on several MPs' expenses claims being handed to prosecutors.

One industry source estimated that the paper gained about £6m of publicity as a result of its scoop, for which it paid £110,000 to get hold of unredacted details of MPs' expenses.

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Couple 'gatecrash' White House meal

Secret Service investigating reports that US reality TV stars breached White House security to attend state dinner

The step up from socialite to celebrity can be a tricky one. In the UK this is usually achieved through a romantic tryst with a famous person, swiftly followed by an appearance on a reality TV show.

Americans Tareq and Michaele Salahi appear to have taken a more direct route to fame, however, by allegedly gatecrashing President Obama's first White House dinner on Tuesday night.

The US Secret Service is investigating how the couple, who its spokesman, Ed Donovan, confirmed was not on the guest list, managed to breach security and attend the 300-strong event.

Donovan said an initial finding indicated that a checkpoint did not follow proper procedures to ensure the two were on the list.

The Salahis, who were described by the Washington Post as "polo-playing socialites," are also reportedly auditioning for roles in the TV programme "The real housewives of Washington".

Michaele Salahi's Facebook page – she has a fan page rather than a profile – was dutifully updated within hours of the White House dinner. Salahi, a former model and cheerleader who had 2,213 "fans" at the time of writing, posted a photo album named "White House State Dinner," showing herself and her husband posing with America's great and good.

"I was honoured to be invited to attend the first state dinner hosted by President Obama and the First Lady to honour India," Michaele explains on her page.

The album features the Salahis with White House chief of staff Rahm Emanuel, mayor of DC Adrian Fenty and vice-president Joe Biden.

There are no pictures posted of Tareq and Michaele with the president, but one imagines that was not for want of trying.

The "bio" on the Michaele Salahi's Twitter page, which appears to be genuine, reads: "Loving, Passionate, Energetic, Charismatic, Giving, Beautiful, Always Positive, Faithful, I see the good in everyone, Love Fashion, Polo & OASIS Champagne."

But after this stunt it seems not everyone agrees. Hundreds of comments have been left on Michaele Salahi's Facebook page, many of them decidedly negative: "You are absolutely pathetic. People will really do anything for attention," said one commenter.

Another post said: "Enjoy going to jail."

But opinion appears to be divided on the issue, with others congratulating the pair. "You pulled the caper of the millennium!!" wrote one.

Donovan said the couple did not pose any danger: "It's important to note that they went through all the security screenings and the magnetometer screening, just like all the other guests did."

He added that Obama and others under Secret Service protection had their usual guards with them at the dinner.

Manchester United react to Besiktas defeat

Alex Ferguson, Gary Neville and Danny Welbeck on last night's defeat against Besiktas in the Champions League

Anglo-Saxon treasure worth £3.3m

Proceeds of sale of 1,800 gold, silver and jewelled objects to be split between amateur metal detectorist and farmer

The glittering heap of treasure of the Staffordshire hoard, the largest and arguably most beautiful hoard of Anglo Saxon gold ever found in Britain, has been valued at nearly £3.3m by a panel of experts, a reward that will be shared between the amateur metal detectorist who found it and the farmer in whose pasture it lay hidden for 1,300 years.

Professor Norman Palmer, chair of the Treasure Valuation Committee, whose members pored over 1,800 gold, silver and jewelled objects in a session at the British Museum said: "It was breathtaking – we all agreed that it was not only a challenge but a privilege to be dealing with material of such quantity, quality and beauty. It was hard to stop our imaginations running away with us."

The scramble will now begin between local museums in Staffordshire to raise the money – £3.285m to be precise – which will be paid as compensation to metal detectorist Terry Herbert, and farmer Fred Johnson.

"We dealt with masses of paperwork before the meeting, and solicited four independent expert valuations in advance of the meeting, which is unprecedented in my experience," Palmer said. "When we met we were driven by two lodestars, scrupulous accuracy obviously, and a determination not to allow the process to drag on and on but to arrive at a figure which would be acceptable to all parties. I don't think they would have been happy if it had dragged on beyond Christmas."

Herbert found the first pieces of gold last July, some lying just below the surface or tangled in grassroots in the field which Johnson had ploughed deeper than usual the previous season. When he reported the find a small army of archaeologists and forensic investigators hit the field, giving the local cover story that police were investigating a murder. They recovered box after box of exquisitely worked gold, including a cheek flap from a helmet, dozens of pommel and hilt decorations from swords, a gold processional cross and a cryptic inscription from the Bible on a strip of gold.

Archaeologists will be poring over the find for years, and have already said it will rewrite the history of Anglo Saxon England, and the pugnacious kingdom of Mercia where it was found.

When the find was announced in September the news went round the world. Some mud caked pieces went on display for a fortnight at Birmingham city museum and people queued for up to four hours to see them, with the museum having to double its opening hours. Highlights of the collection now on display at the British Museum have created the same buzz of excitement.

"There was some speculation that because there was just so much in this hoard it might drive down its value," Palmer said. "But others of us held the opposite opinion, that because it had created so much excitement if it were ever to go to auction, people who wouldn't normally be interested in this field would want to own a piece of it, driving up the value."

Palmer added: "We are satisfied that we have arrived at a value which is both fair, and reflects the extraordinary interest and importance of this hoard."

300 evacuated as fire crews tackle London blaze

• Up to 180 firefighters attend huge fire in Peckham
• More than 300 evacuated as reports emerge of exploding cars

Hundreds of people were evacuated from their homes in south London early this morning after a fire at building site spread rapidly to neighbouring flats.

London fire brigade said around 180 firefighters were called to the blaze in Peckham, south-east London.

More than 300 people were evacuated from the area and four people taken to hospital, including a police officer. Several homes and a local pub, the Golden Lion, are reported to have been destroyed.

Amateur video footage showed flames several metres above the roofline. Other footage appeared to show an explosion close to where several people had gathered on the street to watch the blaze. Harriet Harman, the local MP and deputy leader of the Labour party, said cars had exploded on the street.

"The whole community is in shock," she told the radio station BBC London.

One resident spoke of flames shooting six metres high from the three and four-storey blocks as residents, including mothers with babies, sheltered on the street. Another told BBC London that had "lost everything" in the blaze.

By dawn, live TV images showed the fire apparently under control but a huge area still smouldering in thick smoke.

The blaze started at about 4.30am at a building site in Sumner Road and spread rapidly after gas cylinders exploded.

London Fire Brigade's assistant commissioner, Steve Turek, said three sites, including two blocks of flats, were burning when firefighters arrived at the scene.

"The ferocity of the fire was a challenge when we first arrived because all the buildings were simultaneously burning," he said.

"Homes were a particular concern to us because residents would have been sleeping at home at that time of the morning."

One witness told BBC London: "There was flying debris all over the place and there were cars ablaze and we were told to get out of the area."

Another resident, Lucy Pope, told Sky News that dozens of people were sheltering away from their homes while firefighters tackled the blaze.

"People are scared. They are standing in bus shelters and there are babies who have been woken up," she said.

Evacuated people were moved to emergency accommodation provided by the local authority.

In July, six people died in nearby Camberwell when a fire ripped through a block of flats, Lakanal House, leading to concerns about the design of the building.

Harman paid tribute to the emergency services at the Peckham blaze.

"They have been incredibly brave to go into these buildings," she said. "You can see they are incredibly unsafe and it is still so hot. The heat of the blaze must have been unimaginable. It's really a miracle that nobody lost their life."

The fire and ambulance teams were the same emergency workers who fought the fire at Lakanal House.

"They were thinking 'no, not again', but I think we're really hopeful that there are no fatalities," Harman said. "That's our first concern, and our second is to help people who are in a state of shock.

"We have to make sure that people are rehoused and they are helped to just get on with their lives."

China sets carbon targets

• China plans to slow emissions growth by up to 45%
• PM Wen Jiabao to attend Copenhagen climate talks

The Chinese prime minister, Wen Jiabao, will attend the Copenhagen climate talks next month, the government said today, as it unveiled targets for reducing the world's biggest carbon footprint.

A day after the US president, Barack Obama, confirmed he would attend the early stages of the conference, the Chinese foreign ministry spokesman, Qin Gang, said Wen would join the gathering, which aims to set a global strategy for reducing emissions.

China also announced that it would cut emissions of carbon relative to economic growth by 40% to 45% by 2020 compared with 2005 levels.

"This is a voluntary action taken by the Chinese government based on its own national conditions and is a major contribution to the global effort in tackling climate change," the state council was quoted as saying by the Xinhua news agency.

Because of its high economic growth rate, China's emissions will continue to rise rapidly for at least a decade. But this target commits China to slowing the speed of emissions growth through the adoption of renewable energy, replacing old power stations with more efficient plants, and possibly capturing and storing more carbon. It is also likely to galvanise moves to introduce a carbon trading scheme and a carbon tax.

By setting its first carbon target, China moves its policies more closely into line with international efforts to reduce greenhouse gases.

But the figure is unlikely to be high enough to satisfy European and US negotiators, who have indicated that anything below 50% would represent a less ambitious target than its current efforts to improve energy efficiency.

China's negotiators counter that it is doing far more than wealthy nations at a similar stage of development, particularly given the greater historical and per capita responsibility of the US and Europe.

European diplomats expressed disappointment that China would not be represented in Copenhagen by President Hu Jintao, which may weaken the negotiating team's ability to set an emissions reduction strategy.

Wen ranks considerably lower than Hu in the Communist party hierarchy.

However, Qin said: "Wen Jiabao's attendance at the meeting shows the importance that the Chinese government places on this issue, and shows that the Chinese government is willing to co-operate with the international community."

Other observers said Wen was the best choice because he headed the climate leading group in the state council, China's cabinet, and may be better versed on the issues than the president.

"Wen is the one really driving the action," said Wu Changhua, China director for the Climate Group. "There is not a major difference in terms of decision-making at Copenhagen. They all speak with one voice."

Other environmental groups said China's representation may have been partly determined by the US announcement that Obama would attend only the first part of the meeting.

"We would have liked Hu Jintao to go because he has more power and is in a better position to make decisions in the final stages of the meeting," said Yang Ailun of Greenpeace.

"But if Obama is not going to be there at the end, then China may have decided that the prime minister should go instead."

The announcement comes ahead of two hastily scheduled press conferences by senior officials in the national development and reform commission, which heads China's climate policies.

Brazil, Indonesia and South Korea have recently released their carbon goals. The US has said it will bring a numerical commitment to the negotiating table.