A MULTI-BILLION dollar aid package for Africa agreed by the G8 last night will "lift the shadow of terrorism", Tony Blair said.

The Prime Minister contrasted the deal struck by leaders at Gleneagles with the aims of those behind the London bombings.

After uniting to condemn the attacks on Thursday, the heads of the eight richest nations had come together to help Africa, Mr Blair said.

He conceded the $50bn (£30bn) package did not meet the demands of all anti-poverty campaigners, but insisted: "We have made very substantial progress indeed. We do not, simply by this communique, make poverty history. But we do show it can be done and we do signify the political will to do it."

Campaigner Bob Geldof said measures agreed at the summit would save ten million lives.

"Today is a great day for those ten million people," he told a Press conference at Gleneagles.

He added: "Was this a success? On aid, ten out of ten, on debt, eight out of ten.

"Time will tell, time only will tell if this has been historic or not."

African development and climate change were the twin key issues placed on the agenda of the summit in Scotland by Mr Blair.

Environmentalists criticised the conclusions on global warming, which they say left the G8 "treading water" in the face of US intransigence.

Agencies also expressed disappointment over the development package, particularly the lack of moves to end subsidies in western countries.

Mr Blair said the agreements set a course to end global poverty and eventually to bring the US on board to tackle greenhouse gas emissions.

In addition to the Africa deal, leaders had agreed to $3bn (£1.80bn) for the Palestinian Authority so "two states, Israel and Palestine, two peoples and two religions can live side-by-side in peace" Mr Blair said.

He admitted pushing for a deadline to end subsidies but predicted that would happen at trade talks in December.

US President George Bush had paved the way for an agreement by suggesting US subsidies if the Common Agricultural Policy was scrapped. "I believe it should be and will be 2010 when we can end subsidies," he said.

That move was among the demands of the Africa Commissioner, established by Mr Blair, which also set the target of increasing annual aid to Africa by $50bn within ten years.

It has been described as a minimum by many aid experts, who say the sum is relatively small by G8 standards and could be given immediately.

But Mr Blair said that, taken with debt cancellation and agreements on providing Aids and malaria treatment, it would make a real difference.