G8 summit to pledge £12bn for Arab spring states

Arab transition to democracy are to be offered as much as £12bn in aid, loans and debt relief as a result of pledges being compiled at the G8 group of nations summit on Friday. The money will come from international financial institutions and members of the G8.

Leaders of both Egypt and Tunisia, the two chief recipients of the aid, will speak to leaders of the G8, currently chaired by the French on the second day of its summit in Deauville, and stress that they need money urgently to ensure their shift to democracy is smooth and not hampered by economic crisis.

Both countries have been severely hit by falling economic growth, high inflation, high youth unemployment and loss of tourism, on which both depend. Tunisia has been especially hit by the continuing war in neighbouring Libya.

Tunisia, the electoral commission is insisting elections are deferred from the summer to October to allow more time to prepare a workable electoral roll, a move that is disputed by the interim government.

Egypt, some of the groups responsible for the initial protests that led to the overthrow of Mubarak in February are calling for a second day of rage in Cairo on Friday to protest at the way in which the army appears to be dominating the transition process. Many groups, including the Muslim Brotherhood, have warned against further demonstrations.

The £12bn ($20bn) figure, although impressive-sounding, will have to be examined carefully to see how much represents grants as opposed to loans. The money will predominantly come from the International Monetary Fund, the World Bank, the US and the EU. Both the UK and France have offered bilateral sums: France offered Egypt up to $250m a year in development aid on Thursday and David Cameron set aside £110m over four years for political and economic development.

Britain and France have agreed to send ground attack helicopters to the region in a move that will intensify the attacks on the Libyan regime's command and control sites. Britain will send as many as eight Apache helicopters. Sarkozy has tried to persuade the US to deploy A-10 attack aircraft and AC-130 gunships in Libya.

The draft declaration by the G8 will urge Muammar Gaddafi to declare a ceasefire and agree to a political solution, officials said. The Arab Union meeting this week also called for a ceasefire, but did not call for Gaddafi to stand aside.

Russia's ambassador to France, Alexander Orlov, said the Nato coalition has gone too far.