Asia Pacific leaders making up half the global economy have vowed quick and decisive action to prevent a global depression on the last day of the Asia-Pacific Cooperation forum (APEC) summit in Peru.

Leaders of the 21-member forum offered no specific action to halt economic downturn, but in a joint statement described the slowdown as "one of the most serious economic challenges we have ever faced."

They said free trade and higher government spending were key to resolving the economic crisis gripping the world, and agreed the need to revive world trade talks.

In a joint statement, the leaders promised to "take all necessary economic and financial measures to resolve this crisis."

Their declaration at the end of the two-day summit in Lima echoed measures called for by the G20 meeting in Washington last week, and widened support for drastic action to stimulate lending and spending.

In an unusual move, a separate statement on the global economy released Saturday was modified in the middle of the night to voice more optimism.

"We are convinced that we can overcome this crisis in a period of 18 months," said the added language.

Delegates said that the stronger wording came at the urging of Peruvian President Alan Garcia, the host of the summit.

"We have agreed on this firm statement that will break the vicious circle of anxiety and uncertainty," Mr Garcia said. "We are going to fight this crisis to the bitter end."

He spoke in front of leaders gathered next to him in shapeless brown ponchos, fulfilling an APEC tradition of wearing local outfits for the final group picture.

However not all leaders agreed with the 18 month time frame. Stephen Harper, the Prime Minister of Canada, said it sounded too optimistic and Kevin Rudd, the Prime Minister of Australia, said it was Mr Garcia's opinion and was not shared by all APEC members.

Nor was it clear how trade talks could be resumed. Seven years of global trade negotiations have been hampered by disputes between the United States, China, India among others, and there was no mention of what concessions they would beprepared to make now.

The APEC leaders pledged to work together to ease the turmoil, agreed not to adopt new trade barriers for a year and called for better regulation of the financial industry.

But President Bush clashed with China's Hu Jintao on financial regulation, with Mr Bush, on his last scheduled foreign trip before leaving office in January pressing the case for free markets and Mr Hu calling for a "new international financial order" including tougher regulation of the world's financial system.

The opposing speeches made by the world's most powerful leaders brought into the open resentment among many developing economices against the US which is blamed for triggering the crisis through inadequate financial regulation.

The crisis is threatening Asian nations, some of which, including Singapore and Hong Kong have slipped into recession.

APEC members account for more than half of the world's economic output and also include Canada, Indonesia, Mexico, Chile, New Zealand, Singapore, South Korea and Hong Kong. Nine of them belong to the G20.

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