An action plan to cut greenhouse gas emissions has been agreed by world environment ministers at the global climate talks in the Argentine capital.

The deal followed hours of tortuous negotiations that lasted through Friday night and into Saturday morning at the United Nations Climate Conference in Buenos Aires.

The UK Environment Minister and Deputy Prime Minister, John Prescott, denied that the agreement had been fudged at the last minute saying it was a good day for the environment.

"It didn't look as if it was going to come off but it has and I'm delighted," he said.

"There's still a lot of work to do. What we've done is set out a timetable for that programme so that we can achieve it."

After emerging from the marathon talks with representatives from several key countries, US Undersecretary of State Stuart Eizenstat said: "We're very pleased. We think it advances the momentum of Kyoto."

The agreement has been presented to all the delegates at the climate talks.

Verge of failure

BBC Environment Correspondent Richard Wilson said that at one point during the night the conference seemed on the verge of breaking down when the G77 Group of Developing Nations walked out.

Environmentalists satirised the US cash for emissions plan

With little sign of consensus there were as many as eight competing proposals circulating during the night.

The agreement sets a timetable for the gradual implementation of the 5% cut in greenhouse gas emissions agreed under the Kyoto Protocol in Japan last year.

There is also a framework for starting to transfer high technology and investment from the developed to the developing world.

The intention is to encourage investment in projects which reduce greenhouse gas pollution to create credits that can be used as offsets against pollution elsewhere.

To make the system work it is thought inevitable that a trade in carbon dioxide pollution permits will be set up.

Although not dealt with specifically in the text, such a system would require major polluting companies to buy the right to pollute in the form of tradable permits.

During the negotiations the 180 participating countries divided into three competing trading blocs unwilling to take on expensive clean-up commitments that might leave them at a disadvantage to competitors.

More than 130 countries remain outside the scope of the Kyoto Protocol.

Warming warning

Climate scientists predict that the global temperature will rise by up to 3.5C over the next century - greater than any climate change in the last 10,000 years.

They say sea levels will rise by 15cm-95cm by 2100 - and will go on rising for another 400 years.