Finance ministers from the world's wealthiest nations have agreed to a historic accord cancelling at least $40 billion US worth of debt owed by poor, developing countries.

Britain Treasury chief Gordon Brown said 18 of those countries -- mostly in sub-Saharan Africa -- will receive much-needed relief of 100 per cent of the debt they owe to the World Bank, the International Monetary Fund and the African Development Bank.

At the meeting of G-8 finance ministers in London on Saturday, Brown said that now was "not a time for timidity, but a time for boldness."

The total relief package could be worth more than $55 billion US, although it needs approval first by the lending institutions. Brown added that nine further countries are expected to have their debts written off in the next 12 to 18 months.

Ministers from Canada, the U.S., Britain, Japan, Russia, Germany, Italy and France agreed to the package during the two-day summit.

"A real milestone has been reached," U.S. Treasury Secretary John Snow said. "President Bush's commitment to lift the crushing debt burden on the world's poorest countries has been achieved. This is an achievement of historic proportions."

The package agreed to Saturday was put forward by the U.S. and Britain following last week's talks in Washington between Bush and British Prime Minister Tony Blair.

Finance Minister Ralph Goodale says Canada is prepared to assume its full fair share of the cost.

Aid agencies said the deal would save the countries a total of $1.5 billion US a year in debt repayments that could be used for health care, education and infrastructure development.

"This is a great deal for people in many of the very poorest countries, it reflects well on (Britain's Treasury chief) Gordon Brown and (U.S. Treasury Secretary) John Snow and is a tribute to the growing global campaigns to beat poverty," said Jamie Drummond, executive director of DATA, the organization founded by U2 singer Bono.

The finance ministers are also discussing high oil prices, the huge American budget deficit and the sluggish European economy.

With files from The Associated Press