World leaders pledged yesterday to cut taxes and boost government spending to drag their economies out of recession, and to begin work on a new system for regulating the battered global financial system.

The heads of 20 countries, meeting in Washington, endorsed a series of broad goals to fend off future economic calamities and to revive economic growth. They are expected to reconvene in London in April, with the incoming US President, Barack Obama, to decide on longer-term measures. "We must lay the foundation for reform to help ensure that a global crisis, such as this one, does not happen again," the leaders said in a joint communiqué issued after the conclusion of the G20's emergency two-day economic summit.

Gordon Brown called the deal a "road map" to pull the world out of the credit crisis and predicted that participating countries will, in the coming weeks, unveil packages of tax cuts or spending programmes designed to stimulate their economies. If all 20 governments, accounting for 90 per cent of the world's GDP, acted in concert, he said, the effect on the world economy would be magnified. Among other things, leaders agreed to reform international financial institutions such as the World Bank and the International Monetary Fund to help developing countries weather the economic storm. And they promised to restart a round of international trade talks moribund since July.