Roberto Flores, Honduran Ambassador to Britain: "30% of our income just services our foreign debt"

Speaking to the BBC, Nicaragua's Foreign Minister Eduardo Montealegre said his country wants the international community to write off at least 80% of its debt.

"That would allow us - instead of having significant amounts of our foreign reserves to service our debt - to be invested in schools, health, infrastructure, and economic development," he said

Asked if he meant the Nicaraguan debt should be written off immediately, he said that would be one way the international community could help significantly.

It could take as much as 20 years to repair the damage

The debt situation is very similar in Honduras.

The Honduran Ambassador to Britain, Roberto Flores, said: "To try to reconstruct Honduras with a foreign debt of over $3bn would be practically impossible."

Nicaragua spends about 40%, and Honduras 30% of its national wealth on repaying debt.

One of the aims of May's G7 summit in Birmingham was to look at putting countries on the fast track to debt relief through the World Bank's heavily-indebted poor countries (HIPC) initiative by 2000.

But even under the HIPC process it takes six years for a country to qualify for only limited relief.

And the scheme requires countries to sign up to the International Monetary Fund's structural adjustment programme.

Aid agencies say that the IMF requirements are inappropriate.

They argue that it is unrealistic to expect states to restructure their economies while still paying debts or recovering from paying debts.