Blair: Attending Budapest summit

The prime minister has hinted at tough action on benefits to fund increases in pensions.

Speaking in Budapest, Tony Blair put tackling those "languishing on benefits" at the top of his agenda.

He was speaking in the Hungarian capital, where he was attending a progressive governance conference organised by the Policy Network think tank.

With the shortfall in UK pensions now at the top of the political agenda following the landmark report from former CBI chief Adair Turner this week, the comments were a clear signal as to where Downing Street wants more money to come from.

"In the UK today we have a big debate about how we can provide pensions for people for the future," he said.

"And we will probably have to spend more as a government supporting pensioners in the future.

"But that will mean we have to spend less, particularly on areas where there are people who could work but who presently languish on benefits."

Number 10 adviser Patrick Diamond also used the event to argue for compulsory classes for the unemployed and for putting people into work in socially useful jobs such as community wardens.

Iraq row

Blair pulled out of a summit press conference where tensions over Iraq threatened to surface.

The decision was the second time in two weeks the prime minister had flown home early from an international event, having also ended a visit to Africa ahead of schedule.

The move also follows criticism that he has spent too much time on foreign affairs in this parliament and a spokesman said he wanted to concentrate on his domestic responsibilities.

"The prime minister has very good informal discussions with the other leaders last night and a good range of bilateral meetings this morning," a spokesman said.

"He has covered the ground he wanted to cover at this summit and is returning to the UK to get on with his busy schedule there."