A debt freeze will help affected countries rebuild after the disaster

Leading members of the group had spent the day discussing the terms of a deal and a call for debts to be written off.

Paris Club chairman Jean-Pierre Jouyet said Indonesia, Sri Lanka and the Seychelles are the only countries so far to have expressed an interest.

The Paris Club would be owed about $5bn (£2.7bn) in debt repayments this year.

The moratorium would halt debt payments with immediate effect.

The group said it did not expect payments from affected countries to resume until after the World Bank and the International Monetary Fund (IMF) had assessed their needs.

The move had been agreed "in order to allow these countries to dedicate all available resources to address humanitarian and reconstruction needs", the Paris Club said in a statement.

Write-off call

Some development lobby groups, including UK aid agencies Oxfam and Action Aid, had urged the Paris Club to write off the debt altogether and not just defer the payments.

Oxfam said the Paris Club had failed to "take the bold steps needed on debt".

"Instead of ensuring the tsunami becomes a turning point out of poverty for the region, rich countries seem set to rebuild the poverty of the past," it said.

The Paris Club is made up of creditor nations including the UK, France, Germany, Japan, Russia and the US, and meets about 10 times a year to discuss debts owed to them.

It is an informal gathering, which describes itself as a "non-institution" and has 19 permanent members including all the G7 nations.

Hidden costs?

Not every nation is willing to accept a suspension of repayments, however, either because their level of indebtedness is low or because they are concerned about the effect on their credit rating.

Putting off payments may lower a country's rating, making it more expensive and more difficult for them to borrow money in the future, analysts said.

Total external debt Indonesia $132.2bn India $104.4bn Thailand $59.2bn Malaysia $48.6bn Sri Lanka $9.6bn Somalia $2.7bn Seychelles $560m Maldives $270m Source: World Bank

Thailand is one of the countries that has indicated it prefers to keep up with its payments. India also has said it will rely on its own resources rather than international aid.

Meanwhile, Indonesia, one of the world's most indebted countries, has called for greater help.

It was the worst hit by the tsunami and is facing repayment costs on its foreign debt this year of close to $3bn.

"We are perfectly grateful for the efforts made to relieve our debt in the form of a moratorium, but it is obvious that we would appreciate receiving donations rather than new credits," said Indonesian Foreign Minister Hassan Wirajuda.

The Paris Club meeting came after Jan Egeland, the United Nations official co-ordinating tsunami aid, welcomed a commitment by nations to release relief cash swiftly.

Speaking after a conference in Geneva, he said donor countries had promised $717m over the next six months to help the survivors.

Mr Egeland added it was the first time the UN had collected so much money in such a short space of time after a disaster, calling it an "extraordinary effort".

We're seeing humanity at its very best in the beginning of 2005 Jan Egeland UN relief co-ordinator

The G7 leading industrialised nations, currently chaired by UK finance minister Gordon Brown, had already backed a freeze on repayments.

They will now work with the other Paris Club members to discuss how the deal would work and whether each affected country should be treated on an individual basis according to need.

The idea is that the governments of countries such as Indonesia and Sri Lanka will be able to use their own financial resources to respond to the disaster, rather than having to make debt payments.

"The money spent by Indonesia on one day's debt repayments could instead pay for 100 much-needed aid flights," said the Jubilee Debt Campaign, which represents charity groups such as Oxfam, Christian Aid and ActionAid.

More than 105,000 people were killed in Indonesia by the tsunami and foreign minister Mr Wirajuda on Wednesday estimated reconstruction costs at "around $2.5 billion".

Heavier burden

Economists have warned that any debt relief must be structured carefully to avoid creating a heavier burden in the long-term. Wednesday's deal falls a long way short of this, involving only a deferment.

A write-off was not thought to be under consideration even though the $5bn owing for 2005 would be, in purely financial terms, insignificant for the rich creditor nations.

The meeting came days after UN Secretary General Kofi Annan issued a call for urgent aid.

The amount now promised over the next six months is equivalent to 73% of the $977m that Mr Annan requested.