Gordon Brown was yesterday warned that China could be the main stumbling block to his goal of tightening global financial rules at London’s of the Group of 20 key world economies summit next month.

The Prime Minister defended Chinese cooperation wih the G20 process after Jose Manuel Barroso, the President of the European Commission, suggested that Beijing could resist new plans for common standards of regulation in the battle to restore confidence to markets.

Mr Brown’s problems preparing for the summit on April 2 suffered a further blow when, minutes after EU leaders agreed in Brussels to work together to fight protectionism, carmaker Renault announced plans to “repatriate” Clio production from Slovenia to France, using money from a government bail-out.

Nicolas Sarkozy, the French President, insisted that no Slovenian jobs would be lost because production of the Twingo would be expanded at the Slovenian plant. But the European Commission immediately expressed its surprise that the funding it signed off for the car industry was being used in this way and announced an inquiry.

EU leaders yesterday announced that they would double a rescue fund for Central and Eastern European countries from €25 to €50 billion (£23.5 billion to £47 billion). This followed an appeal earlier this month from Hungarian Prime Minister Ferenc Gyursany who warned of a new Iron Curtain dividing Europe between the richer countries of the west and the collapsing economies of the east.

The EU leaders also agreed to find $75 to $100 billion in loans for the International Monetary Fund as part of an attempt to double its resources for failing economies to $500 billion. Mr Brown refused to say how much Britain would contribute.

Both Mr Brown and Mr Barroso insisted that the EU and the United States shared the same goals for the G20, namely to revive the global economic system and introduce better regulation, with crackdowns on tax havens, hedge funds and executive remuneration. The insistence on a unified approach followed rejections from many EU leaders of US calls for extra fiscal stimulus funds as part of their recovery plans.

Mr Barroso suggested that the main difficulty for the G20 would lie in the east rather than the west.

“While I recognise there are differences of legal and financial culture between the so-called Anglo-Saxon and continental models, what I see as a trend is convergence, and not at all that there is some big fight,” Mr Barroso said.

“The main problem will come from other countries, like China, for example, that do not have the culture of a common setting of rules.”

Mr Brown later rejected this, saying: “Any suggestion that China does not want to see a positive outcome from the G20 discussions is wrong.

“The significance of the G20 is that all the major economies are coming together. They all have the same problems. We have a common interest.”

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive