The war began in 1946 between nationalist forces of the Communist Viet Minh under leader Ho Chi Minh and France, the occupying colonial power.

But there is no lasting agreement on peace in Korea, the main subject of the talks in Geneva, Switzerland between France, Britain, the USA, the USSR, China and countries of Indo-China.

The news of a ceasefire has come as a great relief in Europe and the United States.

The newly appointed French Prime Minister, Pierre Mendes-France, had set a deadline for an agreement that was finally signed in the early hours of this morning.

This afternoon he told the French Parliament he had achieved his aim of "an honourable settlement" to end a war that has cost at least 300,000 lives.

However, there is concern that the terms of the Geneva Accord concede too much to the Viet Minh - not least in the United States which gave $385m to equip the Vietnamese Army.

President Dwight D Eisenhower said in a statement from Washington the agreement contained elements which he did not like - such as the division of Vietnam between north and south - and a great deal depended on how they worked in practice.

Senate leaders from both parties went one step further and expressed their alarm at what is widely regarded as a victory for Communism.

"We may regret that such an agreement has been forced upon the French," said Senator William Knowland, Republican and Senate Majority Leader.

The conference was the first international meeting at which the Communist government of China took part.

The main provisions of the Geneva Accord are:

• Vietnam will be divided between north and south along the 17th parallel
• a Communist government under Viet Minh leader Ho Chi Minh will control the north and a nationalist one in the south under Emperor Bao Dai and prime minister Ngo Dinh Diem ;
• the capitals will be Hanoi in the north and Saigon in the south;
• elections will be held in 1956 with the aim of creating a unified government;
• prisoners of war will be released on both sides;
• French forces will withdraw from the north and the Viet Minh from the south;
• the Communists will recognise Laos and Cambodia as independent countries and agree to the withdrawal of their forces from both.

In Saigon, Supreme French Commander General Paul-Henri-Romuald Ely promised the Vietnamese Army that "in peace, as in war, we will remain at your sides".

In a message to the Vietnamese people he said France would pay for transportation of all those who wanted to leave Communist-controlled Vietnam.

Since the Geneva conference opened on 26 April the French have suffered major defeats at the hands of the Viet Minh, the last and most humiliating being the fall of Dien Bien Phu on 7 May after a 55-day siege. It signalled the end of French rule in Indo-China.

Last month France began a major retreat giving up the south zone of Tonkin's Red River delta leaving behind 2.5 million people and a fertile rice-growing region.

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