WASHINGTON, Nov 10: Congressional Republican leaders yesterday were close to reaching a compromise with the Clinton administration that would allow an IMF-led effort to cut the debts of the world's poorest nations to proceed, reports Reuters.

Sen Ten Stevens, chairman of the powerful Senate Appropriations Committee, said a tentative deal had been reached to allow the International Monetary Fund revalue part of its gold reserves to fund debt relief.

That has now. I understand. been resolved by the US Treasury." the Republican from Alaska told reporters.

The revaluation of up to 14 million ounces of the IMF's massive gold reserves would allow it to realise about $2 billion in paper profits to fund its obligations under an international debt-relief effort.

Treasury Secretary Lawrence Summers said he discussed authorisation of the debt relief plan with lawmakers during meetings at the Capitol on Tuesday that also focused on budget and tax Issues.

T think there is a growing understanding of the impor-

tance of debt relief as a policy issue and more especially the Importance of these authorisations as necessary to enable the United States to be crucial part of an initiative that commands -broad grass-roots support." Summers told reporters following the meetings.

He declined to say whether the administration had struck a deal with lawmakers.

"We've had useful discussion." Summers said.

The gold revaluation is the linchpin to the Heavily Indebted Poor Countries Initiative since it funds the IMF's obligations under the scheme. Many had feared that blocking the gold revaluation would cause the entire effort to collapse.

Coupled with debt relief from the Paris Club of creditor nations. the plan would cut the debts of 33 of the world's poorest nations to $45 billion from $90 billion.

But while a tentative deal appeared to be in place.-Treasury officials were still working with lawmakers on details. Sources close to the talks said that the compromise would allow the IMF to revalue its gold in instalments, one or two million ounces at a time, rather

than in one chunk.

“There's plenty of scepticism on the hill about the IMF." said one lobbyist for debt relief. This compromise would allow Congress to keep the IMF on a shorter leash."

Sources said House Majority Leader Dick Armey told Summers a deal could oe done, provided assurances were made that the money be used only for debt relief which was conditional on strong economic reforms.

Once a compromise is reached. House and Senate leaders will approve a final foreign aid bill In conference meetings. Sources said a deal could be struck as early as Wednesday.

Sources familiar with the talks said that Armey Is also demanding that the IMF's gold authorisation be linked to assurances of greater transparency at the IMF.

Some US lawmakers have opposed the HIPC plan on fears that ft gives the IMF a role In poverty reduction — an arena in which the organisation should not be involved. Others claimed funds should not be diverted overseas while problems remain at home.