G8 ministers meet without Paulson

Too busy to attend: US Treasury Secretary Henry Paulson

G8 finance ministers are starting a two-day meeting in Potsdam in Germany without the US Treasury Secretary Henry Paulson, who is too busy to attend.

Mr Paulson's deputy, Robert Kimmitt, will attend the talks that set the agenda for a full G8 meeting on 6 June.

They are expected to focus on ways to regulate the hedge fund industry and encourage good governance in Africa.

The G8 countries are the United States, Britain, Canada, France, Germany, Italy, Japan and Russia.

On holiday

Mr Paulson decided that he needed to stay at home to deal with legislative work and to prepare for the visit of a Chinese delegation next week.

A spokesman for the US Treasury denied that the decision had anything to do with the German Finance Minister Peer Steinbrueck missing the last meeting of G7 finance ministers in Washington because he was on holiday with his family.

"It has absolutely nothing to do with that fact," he said.

He also played down the extent of the disagreements between the US and Europe about how much regulation is needed of the hedge fund industry.

The German government is keen to tighten regulation of hedge funds with a code of conduct, but the US, Canada and Britain are understood to prefer a lighter approach.