World Bank President James Wolfensohn said Monday he was sceptical about calls for debt relief for more developing countries, saying such a policy, if adopted, could force international lenders to close.

“There’s now a debate to extend debt relief to ... up to 64 countries and as a further initiative to make (he debt relief complete, saying what we have done to reduce it to sustainable levels is not enough," Wolfensohn told a hearing in Germany’s parliament.

“The hysteria that’s going on about this needs to be looked at very carefully because if you advance the notion that you have complete debt relief you will of course wipe out the World Bank ... severely limit the (International

Monetary) Fund, and in the end it will come back on your governments," Wolfensohn said.

Wolfensohn said offering 100 per cent debt forgiveness to 64 countries would mean writing off some $460 billion in loans compared with $190 billion potentially covered by the World Bank and IMF’s highly indebted poor countries (HIPC) initiative.

The cost of such forgiveness to multilateral lenders alone would be $175 billion, up from $70 billion at present. He noted the World Bank only had $29 billion in capital.

fhe five-year-old HIPC initiative covers 41. mainly African, countries of which half have received or been promised debt relief. Critics have said HIPC is not doing enough io help the poor.