Philip Lader: "Everyone should be playing by the rules"

"I regret this very much," Mr Clinton said of the fight which escalated when the US stepped up threats to slap 100% duties on selected European goods.

"We still have time to fix this ... and I hope very much we will in the next few weeks get a resolution of this."

He was speaking ahead of Saturday's meeting between US Secretary of State Madeleine Albright and UK Foreign Minister Robin Cook to try and resolve the trade war.

The row centres on allegations that Europe favours Caribbean bananas over those from Central American companies - many of which are owned by US firms.

'We must stick to rules'

President Clinton said the dispute was not really about bananas, but about the need for rules to govern world trade.

"We cannot maintain an open trading system, which I am convinced is essential for global prosperity, unless we also have rules that are abided by," he added.

Mr Cook, speaking on the eve of his meeting with Mrs Albright, said: "We are both committed to free trade and I would certainly wish to argue that it is not helpful for America unilaterally to impose trade sanctions on Britain."

Emergency talks

Meanwhile, the World Trade Organisation has called emergency talks on Monday to discuss the US's decision to impose import restrictions on many European goods.

The EU has accused Washington of "irresponsible unilateral action" and "blatant disregard" of WTO dispute procedures.

Philip Lader: "Everyone should be playing by the rules"

The move follows unprecedented pressure by London on Washington to back down over the action.

On Friday, the US Ambassador to London, Philip Lader, was summoned by the UK Government for a second time in two days to discuss the dispute.

The Foreign Office called him in to underline "the seriousness with which the UK regards the issue".

Baroness Symons expressed her "shock and concern'' at the US decision to take action ahead of a ruling by the WTO on the EU's revised banana regime.

Mr Lader insisted the US would work hard with Britain to find a solution.

"The United States did not take these actions lightly. We don't take the potential consequences lightly," he added.

US imposes charges

Peter Morgan reports: "£300 million worth of trade is being penalised"

The six-year quarrel blew up on Wednesday, when the US said importers of a range of European products - varying from French cheese to Scottish cashmere - would have to pay a bond to customs before the goods would be allowed to be imported.

The bonds will cover the cost of duties that Washington might impose in future, if the WTO finds in its favour.

About $520m a year of EU exports are affected by the action, and thousands of jobs could be put at risk.

Fergus Nicoll: "There are still some tough decisions ahead"

The EU maintains that its policy on banana imports has been changed to bring it into line with WTO regulations.

But the US has lost patience with both the EU and the WTO, which has so far delayed a decision on whether Brussels is breaking trading laws.