LONDON | Fri Jul 27, 2012 12:21pm EDT

LONDON (Reuters) - Auctioneer Christie's should return the sum of 1.5 million pounds ($2.4 million) paid by a wealthy Russian art collector for a painting that was probably fake, a High Court judge ruled on Friday.

Mr Justice Newey concluded that the painting, "Odalisque," which shows a nude woman asleep on a bed, was probably not painted by Boris Kustodiev, a Russian artist who has been compared with English painter L.S. Lowry.

The judge ruled that Christie's had not been negligent, but should return the money paid for the work to Avrora Fine Arts Investment, a firm run by Russian businessman Viktor Vekselberg, the Press Association reported.

"It follows that Avrora is entitled to cancel its purchase of the painting and recover the money it paid," the judge said.

Kustodiev, who lived from 1878 to 1927, was much better known in Russia than outside, the judge said, adding one art expert had suggested Kustodiev was "to the Russians what Lawrence Stephen Lowry is to the English in terms of affection in which he is held".

Vekselberg's company bought the painting at a Christie's auction in London in 2005.

The work had been described in the sale catalogue as "one of the best examples of Kustodiev's idea of the provincial merchant class", and displayed the inscription "B. Kustodiev - 1919".

But Avrora took legal action against Christie's when an art dealer expressed doubts that the painting was genuine.

An expert called by Christie's thought the painting was authentic, although "not one of Kustodiev's best works".

Christie's lawyers insisted that Odalisque was authentic and the auction house could not be blamed if the painting was no masterpiece.

(Reporting by Alice Baghdjian; editing by Steve Addison)

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* Says no discussions taking place on nationalisation

* Move would have put UK's AAA rating at risk - analysts

* RBS braced for mis-selling IT provisions - Sky News

By Matt Scuffham

LONDON, Aug 2 (Reuters) - Britain has no plans to fully nationalise Royal Bank of Scotland, government sources told Reuters on Thursday, contradicting a report in the Financial Times.

The FT said senior government ministers were discussing the possibility of buying out private investors in the bank but sources told Reuters such a move was not on the agenda.

"There is no discussion on the table, there is no proposal, it is just not an active thing we are discussing at the moment at all," one of the sources said.

Mediobanca analysts said a full nationalisation would increase Britain's debt burden in relation to GDP and almost certainly cost the country its AAA credit rating.

"Having seen the taxpayer already suffer through the rescue of RBS, to saddle them with a book of questionable loans in the interests of political expediency is quite frankly ludicrous," they said in a research note.

Britain already owns 82 percent of the bank after bailing it out during the 2008 financial crisis. The remaining 18 percent of the bank is owned by private investors and would need to be bought out at a premium to the current market price. The shares are worth 4.2 billion pounds at Wednesday's closing price.

The FT report said ministers had become exasperated by the barriers they believe banks are placing on lending and some think taking full control of RBS and forcing it to lend could push other banks into action.

The government is under increasing pressure to stimulate the economy which official data has shown to be in a much deeper recession than previously thought.

The latest programme to get banks lending was launched on Wednesday offering banks 80 billion pounds worth of cheap funding on condition they lend it to small firms and households.

RBS reports first-half results on Friday.

Sky News reported that the bank will set aside a further 130 million pounds to compensate customers mis-sold loan insurance, take a hit of 125 million pounds for problems related to a computer systems failure and make a provision of 50 million pounds to settle claims by small firms wrongly sold interest rate hedging products.

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WASHINGTON | Thu Aug 2, 2012 11:41am EDT

Senate Majority Leader Harry Reid failed to come up with the 60 votes needed to cut off debate on cybersecurity legislation, dimming hopes for passing the bill this year.

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* Tourism is driving demand for suborbital thrill flights

* First commercial suborbital flights could start by 2014

* Advance fares range from $95,000 to $200,000 per seat

By Irene Klotz

CAPE CANAVERAL, Fla., Aug 1 (Reuters) - Commercial suborbital spaceflights should bring in between $600 million and $1.6 billion in revenue in their first decade of operations, according to a study commissioned by the U.S. and Florida governments and released on Wednesday.

Tourism drives about 80 percent of the demand for suborbital flights, which reach about 63 miles (100 km) above the planet's surface before plunging back through the atmosphere.

The thrill ride gives fliers a few minutes to float in microgravity and a view of the Earth set against the blackness of space.

Virgin Galactic, an offshoot of Richard Branson's London-based Virgin Group, is one of six firms developing reusable suborbital spaceships, an analysis by The Tauri Group of Alexandria, Virginia, found.

Prices currently range from $200,000 for a ride on Virgin Galactic's SpaceShipTwo, a six-passenger, two-pilot vehicle currently undergoing testing, to $95,000 for a flight on privately held XCOR Aerospace's planned two-seater Lynx vehicle.

Virgin Galactic, which is aiming to begin commercial service around 2014, already has $70 million in deposits from 536 people, Chief Executive George Whitesides said at a related congressional hearing on Wednesday.

The Tauri Group believes there are about another 7,500 wealthy people waiting in the wings.

"“Our analysis indicates that about 8,000 high-net-worth individuals from across the globe are sufficiently interested and have spending patterns likely to result in the purchase of a suborbital flight - one-third from the United States," the report said.

"“We estimate that about 40 percent of the interested, high-net-worth population, or 3,600 individuals, will fly within the 10-year forecast," it added.

The study, which included surveys of 200 people with a net worth of least $5 million, valued the fledgling industry at $600 million in its first decade, based on current market conditions and interest.

The market could be worth nearly three times that if marketing and consumer interest grows in the wake of successful flights, the study said.

"“Further potential could be realized through price reductions and unpredictable achievements such as major research discoveries, the identification of new commercial applications, the emergence of global brand value, and new government (especially military) uses for suborbital reusable vehicles," the study said.

After tourists, the next biggest group of potential users are in the research community. Other potential markets include technology flight demonstrations, media and public relations, education, satellite launching, remote sensing and suborbital travel from one destination to another, a technology that is likely beyond the study's 10-year time frame.

The $277,000 study, titled “"Suborbital Reusable Vehicles: A Ten-Year Forecast of Market Demand," was paid for by the U.S. Federal Aviation Administration, which oversees commercial spaceflight, and the state of Florida, which is home to NASA's Kennedy Space Center. (Editing by Jane Sutton and Cynthia Osterman)

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HELSINKI | Thu Aug 2, 2012 10:04am EDT

HELSINKI Aug 2 (Reuters) - Google will invest 150 million euros ($184.5 million) in doubling the size of a data centre housed in a former paper mill in eastern Finland, the company said, as it responds to growing demand for its services.

Companies like Google have been expanding data centres due to the increasing popularity of cloud computing services, which allow users to store and process data at massive remote data centres instead of on their own computers.

Finland and other Northern European countries are popular sites for data centres, with vast amounts of hydro-power and cold climates which cut the need for cooling, the main cost for many data centres.

Google's data centre in Hamina uses a sea water cooling system that was part of the old paper mill which Google bought from Stora Enso in 2009.

Europe's top paper maker closed the loss-making mill in 2008 after nearly 53 years of operation. Older parts of the mill were designed by renowned Finnish architect Alvar Aalto.

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(Company corrects comments on Olympic corporate ticket packages in final paragraphs having originally said that it had a third of the packages left unsold and that about 95 percent of the tickets repackaged for sale to the public had now been sold.)

* Harriet Green says will tap on technology expertise

* Q3 operating loss 26.5 mln stg vs 20.1 mln stg profit yoy

* Says rainy weather boosted foreign holiday bookings

* Sees full-year results broadly in line with expectations

By Brenda Goh

LONDON, Aug 2 (Reuters) - Thomas Cook's new chief executive said technology would be the salvation of the struggling British tour operator and gave herself nine months to deliver a turnaround plan to end over a year of poor performance.

The company posted an underlying operating loss of 26.5 million pounds ($41.3 million) in the three months ended June, versus a profit of 20.1 million pounds in the same period last year despite a lift in foreign bookings from Britons exasperated with rainy weather at home.

Harriet Green, who joined the 171-year-old company from electronic parts distributor Premier Farrell in July, told reporters on Thursday she would be able to "bring a fresh pair of eyes" to existing industry problems.

"I don't think moving from one industry (to another) is so much of a challenge ... There are many things that are actually very similar and in my view of business, all roads ultimately lead to technology," she said.

Thomas Cook has been hit hard by tough trading conditions, particularly in Britain where its core customer base of families with young children is suffering in the economic downturn. It has also been affected by unrest in popular destinations such as Egypt, Tunisia and Morocco.

In May it reported half-year pretax loss of 328.3 million pounds and completed the sale and leaseback of 19 of its planes as it struggled to find cash.

"In our view they (new management) face a very difficult turnaround task. We expect early views from the new team in November and a detailed plan to be announced in the Spring," Numis analysts said.

Thomas Cook said foreign holiday bookings had picked up in recent weeks after subdued demand in April and May, as the sodden European summer drove rain-weary Britons, Germans and Russians to seek the sun in Greece and Tunisia.

UK bookings as of July 29 were flat versus the same time last year, while bookings in central Europe were 1 percent higher, boosted by demand from Germany.

In comparison, bookings in west Europe were down 9 percent compared with the same time last year, as trading, particularly in France, stayed tough.

Net debt at June 30 was 1.01 billion pounds, versus 902.5 million pounds at the same time last year. It has striven to pay down its debt through selling its Spanish hotel chain Hotels Y Clubs De Vacaciones and expects to complete the 87 million pound sale of its Indian unit by Aug. 22.

While the outlook remained challenging, the company said its quarterly financial trend was improving and it expects to post a full-year result broadly in line with expectations.

At 0943 GMT shares in Thomas Cook, which have fallen more than 70 percent over the past year, were down 1.5 percent to 16.32 pence, valuing the company at around 148 million pounds.

It also said plans to cash in on the Olympics by selling packages to corporate clients had not gone as well as expected after the implementation of the UK bribery act made corporates nervous about offering or accepting corporate hospitality.

It had originally allocated 25 percent of its tickets to corporate packages but has since repackaged more than half of these to sell to the public a nd said it has now so ld 99 percent of its Olympic tickets. ($1=0.6415 British pounds) (Reporting by Brenda Goh; Editing by Mark Potter and David Cowell)

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* Spanish tech start-ups expand beyond troubled home market

* Young entrepreneurs cheaper than in U.S., Britain

* New ventures aim to bring down sky-high jobless rate

By Clare Kane

MADRID, Aug 2 (Reuters) - Half of Spain's youth are unemployed, and yet at the Wayra business start-up project on Madrid's majestic Gran Via avenue, young people buzz around an office chatting animatedly, typing furiously and holding up trails of wire and computer parts.

These are Spain's technology entrepreneurs, and they're positive about the future - even as Prime Minister Mariano Rajoy tries to avert a full international rescue for a country beset by recession, a property market collapse and a banking crisis.

Almost all plan to expand beyond Spain's borders, if they aren't operating internationally already. For domestic and foreign investors in their ventures, the dire state of the nation can even be an advantage: put bluntly, young Spanish entrepreneurs come cheaper than their U.S. and British rivals.

"There is no crisis. The crisis is outside. But here what we have is people working, setting up companies and creating employment," said Gonzalo Martin-Villa, global head of Wayra.

Wayra is a project set up by Spanish telecoms giant Telefonica where about 40 people work for 10 companies in a minimalist open-plan office, housed in a building that was one of Europe's first skyscrapers when it opened in the 1920s.

They live in a world far removed from the grinding reality of a Spain beset by near-daily street protests against Rajoy's budget cuts and media reports fretting about the cost of government borrowing and the possibility of a state bailout.

Telefonica operates widely in Latin America - Wayra means "wind" in the Quecha language of the Andes - but it is not immune from Spain's problems. Last week it scrapped this year's dividend due to its weak home market, but it still believes entrepreneurs will bring in ideas to set Spain up for a better future.

Under Martin-Villa, who heads Telefonica Digital, the group is nurturing the young companies with start-up capital, accommodation and help with technology and marketing. It also supplies mentors from within Telefonica or brings in outside experts to offer advice.

This help is limited. After a year, the firms must leave Wayra and fend for themselves in the business world. However, Telefonica keeps a shareholding in return for the start up capital which the entrepreneurs must match by raising funds elsewhere.

FORTUNE IN MISFORTUNE

David Moreno, founder of online investment platform Impok, is one entrepreneur based at Wayra who is trying to create a successful business out of Spain's misfortunes.

Moreno and his team used to work in the financial sector and, seeing Spaniards' distrust of banks, decided to offer people the opportunity to invest directly, without the spin laid on by investment advisers, and share money-making ideas.

Moreno compares Impok with Napster, a website which originally allowed users to share music files online, although it ran into legal trouble over copyright infringements before changing its business model.

"What Napster did to music, we're going to do to banks," Moreno said, standing proudly in the firm's office in Wayra.

Impok users can see others' portfolios and returns (although not the amount invested) and make decisions based on others' financial performance. The firm is hoping for 1.5 million euros in its second round of financing, after raising 460,000 euros in initial capital from business angels, Wayra and public funding.

Impok will now target investors in Spain, the rest of the Europe and the United States to raise further funds.

Telefonica is not alone in Spain. Oil major Repsol also has a start-up hub and brewer Mahou-San Miguel has offered to help young people with business ideas.

Likewise, travel firm Pullmantur will mentor Seville-based Past View, which offers tourists the opportunity to see what a city looked like in the past through 3D goggles.

INVESTMENT ON THE CHEAP

Foreign investors are drawn to Spanish tech companies, unworried by the crisis, as location is generally not important for start-ups planning to operate internationally.

Spain's problems can even work to their advantage. While overall unemployment is just short of 25 percent, the highest in the euro zone, the rate among young people is double that. In short, unemployed talent can be contracted cheaply.

While the price may be low, the quality is not. Many of the entrepreneurs interviewed by Reuters studied at top universities abroad, especially in the United States and Britain, before returning home to Spain to work.

Tech companies can also offer an attractive investment alternative to Spain's troubled stock market and government debt. I f successful, innovative products can rapidly bring high returns. Global expansion is often more straightforward than in other sectors as tech by its nature crosses borders easily.

It's a phenomenon also seen in Ireland, which suffered an even deeper banking crisis after its property market collapsed, like Spain's. Dublin has also encouraged people to set up businesses to revive the fallen Celtic Tiger economy, and data company EMC has predicted Ireland is on the verge of a new tech boom that will create thousands of jobs.

Irish brothers John and Patrick Collinson attracted millions of dollars of investment from the likes of venture capitalist Peter Thiel for their Silicon Valley-based Internet payments system Stripe, something Spanish entrepreneurs hope to emulate.

ProFounders Capital, a venture capital fund run by entrepreneurs including lastminute.com co-founder, Brent Hoberman, says Spain is fertile investment territory.

It put up $750,000 in financing for Blink Booking, a Spanish-based venture that offers a hotel reservations app and is now present in several European countries.

"It's horrible to say, but actually it's a slight advantage because Blink is able to recruit high quality people at fair prices, so that works well from their side," said Sean Seton-Rogers, of ProFounders Capital.

Although no specific figures are available, people in the start-up sphere say activity has picked up since the beginning of this year, with investors buying up more small Spanish companies, although the amount of money pouring into firms has fallen off since 2010.

"The technology and the teams are equivalent to what you can find in the United States or the UK but it is much cheaper," said Juan Jose Guemes, President of the International Centre for Entrepreneurial Management at IE Business School in Madrid.

READY FOR CHANGE

Madrid remains a long way culturally from Silicon Valley. Rebeca Minguela, a co-founder of B link, said Spain needs a shift in mentality. Many young people there still prefer the supposed security of working at large, well-known companies, even though many of these are now laying people off, she said.

"We give our employees stock options, but people don't value them, it's a completely different mentality compared to the U.S.. You always have to pay your employees in cash, which is terrible for a start-up," she said.

Many start-ups in the United States and elsewhere initially pay employees in stock options to preserve capital for expansion.

Blink pays its staff in a mixture of cash and stock options, but, given the choice, the majority of workers prefer to receive cash, Minguela said. All permanent employees have stock options.

In the lively neighbourhood of La Latina, Andres Burdett and Jamie Dick-Cleland - who founded language-learning start-up uSpeak - enthuse about Madrid becoming a start-up centre and the opportunity they have to offer cheap English language tuition to Spain's unemployed as the government makes cuts in education.

uSpeak, which will offer personalised mobile language learning when it launches officially in October, settled in the capital following Startupbootcamp Madrid in 2011 and is housed alongside several foreign start-ups.

The firm is promising to teach Spaniards initially for free, and then for a low price, i m proving their job prospects in a country where English is less widely spoken than in many other Western European countries.

"There's something going on...people are ready for change," said Dick-Cleland.

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TORONTO | Wed Aug 1, 2012 11:27pm EDT

TORONTO Aug 1 (Reuters) - Research in Motion refuted on Wednesday a new round of Indian media reports, which claim that the BlackBerry maker has granted the Indian government the encryption keys to its secure corporate email and messaging services.

India is one of the Canadian smartphone maker's few growing markets, where it is expanding aggressively. The company is facing falling sales elsewhere as customers abandon the BlackBerry in favour of Apple's iPhone and a slew of devices using Google Inc's Android software, leading to RIM's shares falling by more than 50 percent over the past one year.

RIM, which has been grappling with the Indian government for years, reiterated that it cannot provide access to its enterprise email and messaging services as the company itself does not possess the encryption keys for the same and these remain in the control of its corporate clients.

The Economic Times, in a report on its website that cited a telecom department official and certain documents reviewed, said that RIM had provided the Indian government a solution that gave it access to corporate emails.

RIM categorically denied this claim in a statement. It has more than once refuted similar claims in India over the last two years.

"RIM is providing an appropriate lawful access solution that enables India's telecom operators to be legally compliant with respect to their BlackBerry consumer traffic, to the same degree as other smartphone providers in India, but this does not extend to secure BlackBerry enterprise communications," said Waterloo, Ontario-based RIM in a statement.

RIM gave India access to its consumer services, including its Messenger services, in January last year after authorities raised security concerns, but said it could not allow monitoring of its enterprise email.

The Indian government is fearful that encrypted BlackBerry services could be used to foster unrest or allow militants to organize or carry out attacks.

'SECURE AND ENCRYPTED'

David Paterson, RIM's head of government relations, said he is positive that the Indian government recognizes encryption is fundamental to attracting and maintaining international business in the country and that it would not make any demands that could jeopardize foreign investment in India.

"The fact is that BlackBerry enterprise communications in India remain secure and encrypted. No change has been made or ever can be made in India or anywhere," he said in an interview.

RIM has also faced similar political pressures in the Middle East and elsewhere. It also blocked pornographic sites on its browsers in Indonesia last year following government pressure.

Enterprise clients -- corporations and government agencies signed up to the BlackBerry Enterprise Server -- are assigned encryption keys stored only on individual user accounts. For such users, any data sent from a BlackBerry is scrambled at the source and reconstituted on arrival at the receiving device.

RIM has long maintained that only the sponsoring business or organization has the technical capability to grant access to encrypted enterprise email.

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n" readability="62">Aug 2 (Reuters) - The following bids, mergers, acquisitions and disposals involving European, U.S., Canadian and Asian companies were reported by 1330 GMT on Thursday.

** South Korea decided to suspend the sale of its 6 trillion won ($5.2 billion) controlling stake in Woori Finance Holdings after failing to evoke interest from potential buyers, a Financial Services Commission official said on Thursday.

** A group of Chinese investors will pay 55 million euros ($67 million) for a 15 percent stake in Inter Milan, becoming the second-biggest shareholder of the Italian premier league football club, sources close to the situation said.

** AT&T Inc has agreed to buy the equity of NextWave Wireless Inc for up to $50 million in cash in an effort to expand its spectrum needed for high-speed wireless services.

** Prime Acquisition Corp said it would buy Yuantong Investment Holdings Ltd in a proposed $42 million transaction.

** Ryder System Inc bought UK-based Euroway Group Ltd for about $20.2 million.

** Avnet Inc, an industrial distributor of electronic components, enterprise computer and storage products bought Pepperweed Consulting and expects the transaction add to earnings immediately.

** German sports apparel company Adidas said it was not planning to sell struggling unit Reebok and that it hopes to return the division to growth in 2013.

** China's Hanlong Group is in talks to reduce the A$1.7 billion ($1.79 billion) price tag it agreed to pay for Australian iron ore miner Sundance Resources, following a drop in both Sundance's share price and the price of iron ore.

** Dutch bank and insurer ING, which has been forced to sell assets in return for receiving state aid during the financial crisis, said it is considering the sale of its online banking businesses in the UK and Canada.

** Japan-based communications service provider Dentsu Inc said it has received regulatory approval from Australia's Foreign Investment Review Board (FIRB) to acquire Australian telecommunications hardware maker Aegis.

** Chalco said it has decided to extend its offer for a majority stake in Mongolia-focused coal miner SouthGobi Resources Ltd for the second time, the Chinese aluminum giant said on Thursday, in the face of stiff political opposition in Mongolia.

** Alliance Pharma bought AstraZeneca UK's antimalarial brands paludrinetm, avloclortm and savarinetm and said it would pay 4.2 million pounds ($6.55 million)and up to 1 million pounds ($1.56 million) over the next 3 years.

(Compiled by Vishal Krishnan Menon in Bangalore)

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* June quarter profit rose 56.4 percent to 3.52 bln rupees

* Analysts were expecting profit of 2.7 bln rupees

* Won two multi-million dollar orders in the June quarter

* Merger on schedule

* Chairman confident of sustaining merged company's growth (Adds chairman's comments on outlook)

BANGALORE, Aug 2 (Reuters) - India's Satyam Computer Services Ltd, in the process of a merger with parent Tech Mahindra Ltd, beat expectations with a 56.4 percent rise in quarterly profit, as it won new business and got a boost from currency effects.

Profit was buoyed by multi-million dollar order wins and gains of about 585 million rupees on exchange rate fluctuations. Satyam said it had won at least three big orders this year including two in the June quarter, without naming the clients.

Profits for the first quarter ended June 30 rose to 3.52 billion rupees ($63.1 million) from 2.25 billion rupees in the year-earlier period, Satyam said in a statement. That compared with analysts' estimate of 2.7 billion rupees, according to Thomson Reuters I/B/E/S.

"Global business realities continue to be unpredictable. However we are confident of taking forward our momentum," Chairman Vineet Nayyar said in a statement.

The company added 2,643 employees in the June quarter, taking its total workforce to 35,996. Satyam and Tech Mahindra together had 372 active clients as of June 30, including SAAB AB and BT Group Plc.

"The numbers look very good," said Hitesh Shah, Director of Equity Research at IDFC Securities, who has an "outperform" rating on both Satyam and Tech Mahindra.

Billionaire Anand Mahindra purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based company admitted to one of India's largest accounting frauds.

Mahindra is seeking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra, which provide software services to clients mostly in the United States, Europe and Australia.

Tech Mahindra, which owns close to 43 percent of Satyam, is offering one share in itself for every 8.5 shares of Satyam to absorb the company.

Shares of Satyam, valued at about $1.8 billion, have risen almost 30 percent this year, compared with a 7.6 percent fall in the sector index, dragged down by Infosys.

Last month, Infosys, which has lost about one-fifth of its market value this year, cut its sales growth forecast for the current fiscal year.

Top-ranked Tata Consultancy Services, however, beat estimates. ($1 = 55.78 rupees) (Reporting By Harichandan Arakali; Editing by Helen Massy-Beresford)

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Writer Gore Vidal is pictured at the ''2005 Literary Awards'' hosted by PEN USA in Los Angeles in this November 9, 2005 file photo.

NEW YORK/LONDON | Wed Aug 1, 2012 3:00pm EDT

NEW YORK/LONDON (Reuters) - The death of author Gore Vidal at the age of 86 brought tributes from around the globe on Wednesday, as friends and fans mourned the passing of the man remembered as one of America's literary giants.

Vidal, whose biting observations on politics, sex and American culture in novels, plays and essays made him one of the best-known authors of his generation, died at his home in Los Angeles on Tuesday of complications from pneumonia.

"Gore Vidal was the last surviving giant of a postwar crop of American literary giants," said Gerald Howard, the executive editor and vice president at Doubleday, and Gore's editor for more than a decade.

"He was also that rare American writer who spoke not just to his countrymen but to the entire world, which listened closely to what he had to say."

Howard praised Vidal's many achievements and remembered his dashing persona.

"He can't be replaced and he most certainly will be missed. The world just became a duller place," he added.

Michael Coffey, the editorial co-director of the trade magazine Publisher's Weekly, described Vidal as a prolific writer and an entertaining and rollicking storyteller.

"Despite all that productivity he was able to step outside and into the public arena and comment on politics and culture in a very lucid and entertaining way," Coffey said in an interview.

One of the joys of Vanity Fair editor Graydon Carter's career was publishing Vidal's writings in the magazine.

"Whether you agreed with him or not, you always had to concede that he got his point across with the utmost elegance," Carter said.

A MAN OF MANY TALENTS

Vidal, born in West Point, New York, began writing as a 19-year-old soldier stationed in Alaska, where his World War Two experiences provided material for his first work, "Williwaw".

But it was his third novel, "The City and the Pillar," which openly featured one of the first homosexual protagonists, that created a sensation in 1948.

A series of historical novels -- "Burr," "1876," "Lincoln" and "The Golden Age" among them -- as well as the campy transsexual comedy "Myra Breckinridge" also form Vidal's legacy in a publishing career spanning over six decades.

For Jeffrey Richards, producer of a revival of Vidal's "The Best Man" currently on Broadway, Vidal was simply "an original."

"He wrote novels, essays, plays, teleplays and films with grace, distinction, style, wit and wisdom. Not to mention that he was a master raconteur, an accomplished actor, a brilliant gadfly and an impishly gifted impersonator," he said.

"For his contribution to American culture, we will always be in his debt."

Michael Kammen, the Pulitzer Prize-winning author and professor emeritus of American History and Culture at Cornell University, said Vidal was "a brilliant intellect, a superb stylist, and a fabulous gossip."

"He was a great controversialist, doing battle on television panel shows with conservatives. He described and explained American political culture past and present and illuminated what we thought we knew, or areas that we had forgotten. He had the most inquiring mind you can imagine and he dared to be outspoken. He will be missed," he said.

LITERARY FRIENDS AND ENEMIES

Vidal, a self-described "gentleman bitch," was just as well known for his caustic comments outside the covers of his books.

He considered Ernest Hemingway a joke and compared Truman Capote to a "filthy animal that has found its way into the house."

His most famous literary enemies were Norman Mailer and conservative pundit William F. Buckley Jr.

Mailer, whom Vidal once likened to cult killer Charles Manson, head-butted Vidal before a TV appearance.

"Gore Vidal dreaded the idea of an afterlife, because it would mean he'd have to see Norman Mailer again. Rest In Peace," said comedian Frank Conniff on the social messaging service Twitter, where tributes to Vidal mainly took the form of quotations from the writer.

Documentary filmmaker Michael Moore and rock singer Courtney Love were among the many celebrities who posted their favorite sayings.

"'Style is knowing who you are, what you want to say and not giving a damn.' quoted by Gore Vidal ... you will be missed, rest in peace Gore," said Love in a Twitter message.

Moore chose: "Half of the American people have never read a newspaper. Half never voted for president. One hopes it is the same half." This quotation was also tweeted by the British Internet entrepreneur Martha Lane Fox.

British writer Owen Jones, who penned the book "Chavs" about British social class, picked a Vidal quote about friendship and death: "'Whenever a friend succeeds, a little something in me dies'. RIP Gore Vidal, a great intellectual of our time. No-one did acerbic better."

(Editing by Will Dunham, Gary Hill)

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* Next iPhone expected to have larger screens

* Sharp declines to give specific date for shipments

TOKYO Aug 2 (Reuters) - Japan's Sharp Corp. will start shipping screens destined for a new Apple iPhone that is widely expected to be released in October ahead of the pre-Christmas shopping season.

"Shipments will start in August," Sharp's new president, Takashi Okuda, said at a press briefing in Tokyo on Thursday after the company released its latest quarterly earnings.

He declined to give a more specific date for shipments beyond this month.

Apple is planning a major product launch on Sept 12, stoking speculation that the world's most valuable technology company will announce the sale of its redesigned iPhone. Sharp, identified as a supplier by Apple last year, is one of three companies expected to build the screens for the latest Apple offering.

Sharp does not comment on its relationship with Apple, but the screens set to start shipping in August are widely known to be headed for the new iPhone.

The other two suppliers of the panels are LG Display Co Ltd and Japan Display Inc.

Apple is equipping the next iPhone with a larger screen after Samsung Electronics unveiled its latest Galaxy smartphone with a 4.8-inch touch-screen.

Sources earlier told Reuters that the panels will be 4 inches corner to corner -- 30 percent bigger than current iPhones.

Samsung last month posted a record operating profit of $5.9 billion for the quarter ended June, helped by sales of its latest handset.

The iPhone screens will also be thinner than their previous incarnations with the use of so-called in-cell panels. The new technology embeds touch sensors into the liquid crystal display, eliminating the touch-screen layer found in current iPhones.

Samsung and Apple on Tuesday faced off at the start of a high-stakes patent trial, where Apple has accused Samsung of stealing iPhone features like scrolling and multi-touch.

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A computer keyboard is seen in Bucharest April 3, 2012.

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1 of 2. European Central Bank (ECB) President Mario Draghi speaks during the monthly news conference in Frankfurt June 6, 2012.

FRANKFURT | Thu Aug 2, 2012 11:37am EDT

FRANKFURT (Reuters) - The European Central Bank will gear up to buy Italian and Spanish bonds on the open market but would only act after euro zone governments have activated bailout funds to do the same, ECB President Mario Draghi said on Thursday.

Draghi indicated that any ECB intervention would start at the earliest in September and would depend on countries in trouble on bond markets making a request and accepting strict conditions and supervision.

He also indicated that German central bank chief Jens Weidmann had expressed reservations about bond-buying and further efforts would be needed to persuade the Bundesbank before a final vote to take action.

At a news conference following the central bank's monthly meeting, Draghi said the bank would consider other "non-standard" measures to rein in the euro zone crisis.

"The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective," Draghi said after the bank kept euro zone interest rates at a record low 0.75 percent.

The bank has already spent 210 billion euros buying bonds under its now dormant Securities Markets Programme (SMP) since May 2010, with limited impact, but Draghi said the new effort would be different in scope and conditionality.

Any new ECB action was conditional on euro zone governments using their EFSF and ESM bailout funds first, he said.

"Governments must stand ready to activate the ESM/EFSF in the bond market when exceptional financial market circumstances and risks to financial stability exist," he said.

Financial markets seemed underwhelmed by the announcements, with some investors having interpreted Draghi's comments last week as a sign of imminent rather than future and conditional action.

"It is quite disappointing ... There is a lack of any action so he has basically passed the buck back on to politicians," said Ioan Smith, strategist at Knight Capital.

German bund futures extended gains, a sign of investors seeking safety, and the euro fell by more than one cent to below $1.22 at 1330 GMT.

Draghi was under intense pressure from investors, European leaders and even the United States to deliver on Thursday on his pledge to do whatever it takes to save the euro by bringing high borrowing costs down and salving the debt crisis.

His comments in London last Thursday that the ECB would do whatever it takes within its mandate to protect the currency bloc from collapse - "and believe me, it will be enough" - had already eased tensions on the debt markets.

PRESSURE

Other countries, especially the United States, have raised pressure on the ECB to act as the two-and-a-half year old euro zone crisis weighs on global growth.

The U.S. Federal Reserve dashed expectations among some investors on Wednesday by taking no immediate new measures to revive the economy.

The Fed stopped short of offering new monetary stimulus, though it signaled more strongly that further bond buying could be in store to help a U.S. economic recovery that it said had lost momentum this year.

ECB action, meanwhile, is hamstrung by EU rules forbidding it from financing governments. The ECB issued a legal opinion in March 2011 ruling out perhaps the biggest gun, giving the ESM bailout fund rights to tap the ECB for funds to increase its firepower.

The ECB also has to find a way to get any measures past Germany, the euro zone's largest economy and its principal paymaster. The Bundesbank issues regular reminders of inflationary dangers stemming from non-standard measures such as bond purchases and the limits central banks face.

Draghi said all members of the Governing Council endorsed Thursday's statement with one exception - a reference to Bundsbank president Jens Weidmann.

"The decision to do whatever it takes to preserve the euro as a stable currency has been unanimous," Draghi said.

"It's clear and it's known that (Germany's) Bundesbank have their reservations about the programme of buying bonds. The idea is we now have the guidance, the monetary policy committee, the risk committee and the markets committee will work on this guidance and then (we) will take a final decision and the votes will be counted."

His wording suggested he was prepared to outvote the German central banker if necessary.

(Reporting by Sakari Suoninen; Editing by Paul Taylor/Jeremy Gaunt)

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LONDON | Thu Aug 2, 2012 11:24am EDT

LONDON (Reuters) - The Bank of England decided it was too soon on Thursday to step up efforts to bolster Britain's recession-hit economy, although future action looks increasingly likely as growth shows little sign of rebounding after a dismal few months.

Britain's economy tipped into its second recession in four years at the end of 2011, and a multi-year austerity program to close the country's vast budget deficit is weighing both on consumer morale and the government's popularity.

The BoE restarted its asset purchase program, which aims to lower big companies' capital costs, last month, and Wednesday marked the start of a joint scheme with the finance ministry to reduce the cost of bank loans for home-buyers and businesses.

As a result, almost all economists polled by Reuters had expected the BoE to make no change on Thursday to its plan to buy 50 billion pounds of British government bonds, which will take total purchases to 375 billion pounds by early November.

Interest rates likewise stayed at a record low 0.5 percent.

But if economic data continues to disappoint in the way it has in recent weeks, the central bank may not have the luxury of waiting long before deciding on its next policy move.

"While the unchanged decision isn't a surprise there is a question mark as to whether current policy settings are appropriate," said David Tinsley, UK economist at BNP Paribas.

"It is probably not the sort of macroeconomic environment where policymakers want to be doing too little."

European Central Bank President Mario Draghi discovered the danger of disappointing market expectations on Thursday when he said the ECB was merely considering - rather than immediately implementing - a new program to buy euro zone debt.

Stocks and the euro fell and Spanish and Italian bond yields rose after the ECB's monthly meeting brought no bold new moves, partially reversing a rally in riskier assets since Draghi surprised markets last week with a pledge to save the euro.

British economic output shrank by 0.7 percent in the second quarter, a much bigger fall than economists had expected, even taking into account the effect of an extra public holiday and months of unusually wet weather.

Both the BoE and Britain's coalition government blame the euro zone crisis for the fact that Britain has been in recession since late 2011. But Germany and France, which are at least as heavily exposed to the debt troubles on the euro currency bloc's periphery, have seen stronger growth over the same period.

Moreover, there is little sign so far of a hoped-for rebound in the third quarter from London's hosting of the Olympics.

Manufacturing activity fell at its fastest pace in more than three years in July, according to a survey of purchasing managers, and while construction improved, builders warned of disruption to deliveries from the Games.

The one bright spot is strong job creation since the start of the year, which has pushed unemployment down to 8.1 percent.

FURTHER STIMULUS SEEN

Most economists polled by Reuters before Thursday's decision expect further asset purchases with freshly created money, also known as quantitative easing, later this year.

The BoE might even lower interest rates again - something it has steadfastly resisted since its last rate cut in March 2009.

At July's meeting, MPC members said they may reconsider a rate cut in a few months time, once they have assessed the impact of the new Funding for Lending Scheme that offers cheap financing to banks which lend to businesses and home-buyers.

A clearer insight into the central bank's outlook will come on August 8, when BoE Governor Mervyn King presents the central bank's quarterly forecast update.

"King will stress - as he has for the past year - the damage from the euro zone crisis and the impact of that on the growth and inflation forecasts," said Brian Hilliard, an economist at Societe Generale.

As well as weak growth, inflation has fallen much faster than the BoE predicted in May to hit a 2-1/2 year low of 2.4 percent in June - close to the central bank's 2 percent target - and some economists now fear it may substantially undershoot.

"It would be a surprise if the (BoE) were expecting an inflation rate in two years time that was close to their target. More likely it will fall short by some margin. That would imply there was 'room' for more monetary easing," said BNP's Tinsley.

Further easing would be welcomed by finance minister George Osborne, who lost a reputation for political sure-footedness after a Budget that seemed to fund tax cuts for the very rich with higher taxes for pensioners and poorer Britons.

Last month the International Monetary Fund said Osborne may need to reconsider how to reduce Britain's budget deficit - the centerpiece of the coalition government's policy program - if BoE and other measures do not boost growth by early next year.

But for now, the focus remains on the central bank.

(Additional reporting by Sven Egenter and Olesya Dmitracova; Editing by Catherine Evans)

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TOKYO | Thu Aug 2, 2012 2:11am EDT

TOKYO Aug 2 (Reuters) - Sony cut its forecast for TV sales on Thursday, saying it now expects to sell 15.5 million televisions in the business year to next March compared with its forecast in May of 17.5 million.

In the April-June quarter it sold 3.6 million TVs compared with 4.9 million in the same period last year.

Sony forecast sales of its PlayStation games console this business year would reach 16 million, unchanged from its May forecast, but combined sales of its handheld PSP an PS Vita devices would be 12 million, down form its May forecast of 16 million.

The company said it still expects an average dollar-yen rate for the business term of 80 yen, the same as its assumption in May. But it predicts a yen-euro rate of 100 yen compared with its assumption of 105 yen three months ago.

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TORONTO | Thu Aug 2, 2012 9:04am EDT

TORONTO Aug 2 (Reuters) - Research In Motion chose its home country to launch a PlayBook tablet with built-in support for cellular networks, a crucial feature that its initial models lacked.

The BlackBerry maker said on Thursday that the new tablets will be launched in Canada next week and rolled out in coming months in the United States, Europe, South Africa, Latin America and the Caribbean.

The PlayBook tablet, launched more than a year ago, is strategically important for RIM as it is the first product to use the QNX operating system RIM will move onto a new generation of BlackBerry phones designed to compete with sexier devices already on the market.

But the PlayBook was widely criticized at launch for lacking basic features such as email, and it has failed to wow consumers despite sharply discounted pricing and a major software upgrade.

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TAIPEI Aug 2 (Reuters) - Torrential rain and strong winds triggered landslides and flooding, forcing financial markets to shut and disrupting transport, after Typhoon Saola made landfall in eastern Taiwan on Thursday, authorities said.

At least one person was killed in a landslide and eight injured in the storm.

While some major companies remained open, Taiwanese authorities ordered other businesses and schools to close. Financial markets were also shut, with normal operations expected to resume on Friday.

Most domestic flights were cancelled, along with some international services. Train services were also stopped as the typhoon made its way up Taiwan's less populated and mountainous east coast.

Taiwan's National Fire Agency said one person had been killed in a landslide in the central region of Chiayi. Eight people were injured, most in falls from motorcycles.

The agency also said a policeman had died of a heart attack.

Three of Taiwan's top technology exporters, chipmakers TSMC and Nanya Tech and LCD panel maker AU Optronics, said none of their facilities were affected and were running as normal.

Saola is currently rated a category 2 typhoon on a scale of five and was expected to weaken to a category 1 within 12 hours as it passed Taiwan and headed for southeast China, meteorologists said.

A separate system, Typhoon Damrey , has not affected Taiwan a nd is expected to pass north of China's financial hub of Shanghai on Friday but will weaken to a tropical storm.

China's meteorological agency issued typhoon warnings on Thursday for the southern and eastern provinces of Fujian and Jiangsu. On Tuesday, China's Premier Wen Jiabao told authorities to be on the highest alert.

Wen, who usually leaves more junior leaders to oversee arrangements before storms, told authorities to step up preparations and "put people's lives first", the official Xinhua news agency said. (Reporting by Jonathan Standing, Clare Jim and Faith Hung in TAIPEI and Sui-lee Wee in BEIJING; Editing by Paul Tait)

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A trader works at the Knight Capital kiosk on the floor of the New York Stock Exchange August 1, 2012.

NEW YORK | Thu Aug 2, 2012 11:12am EDT

NEW YORK (Reuters) - Knight Capital Group Inc is being forced to raise money after an erroneous trading position wiped out $440 million of its capital, the firm said on Thursday, causing its shares to shed half of their value.

Problems at Knight, one of the largest firms that buys and sells stocks to provide liquidity to the markets, emerged at the beginning of trading on Wednesday.

"The company is actively pursuing its strategic and financing alternatives to strengthen its capital base," Knight said in a statement. Its shares were down 49.7 percent at $3.49 in morning trading after hitting an all-time low of $3.15.

Knight has already approached JPMorgan Chase & Co for financing, according to a report on Fox Business Network. But it was unclear if that financing would be granted. A spokesman for JPMorgan declined to comment.

Wednesday's technology breakdown roiled the prices of some 140 stocks listed on the New York Stock Exchange, undermining fragile investor confidence in the stability of U.S. stock markets.

Speaking on Bloomberg Television, Knight Capital Chief Executive Officer Tom Joyce said the firm had "excess capital right now." On Tuesday night, it had put in new software that had a bug, he said.

The firm said it was in compliance with capital requirements and that it had traded out of the entire position.

"This issue was related to Knight's installation of trading software and resulted in Knight sending numerous erroneous orders in NYSE-listed securities into the market," Knight said. "This software has been removed from the company's systems."

The trading glitches are the latest in a series of market snafus that have eroded retail investors' confidence.

Others include the botched Facebook Inc initial public offering, the 2010 "flash crash" in which nearly $1 trillion in market value disappeared in minutes, and the failed public offering of BATS Global Markets, a rival to the NYSE and the Nasdaq.

Specialists in securities industry operations issues said the wave of recent problems pointed to an unsettling reliance on automated trading facilities that is robbing investors of confidence in the markets.

"We're losing the human control in our business," said Joe Anastasio, a founding partner of financial services consulting firm Capco who specializes in stock trading issues. "We've been so focused on automated throughput of orders and high-volume execution with no human intervention that we have lost the human logic factor when things go wrong."

One of the problems, he said, is that millions of orders stack up overnight for automatic execution at the opening of trading, with a single error potentially creating a deluge of bad trades.

Knight said its principal broker-dealer subsidiaries were fully compliant with their net capital requirements despite the pretax loss of about $440 million that has "severely impacted" the parent company's capital base.

The U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority are looking into Knight's trading error, according to William Brodsky, CEO of top U.S. options market CBOE Holdings Inc.

"It's obvious that it appears that there was a technology glitch in the trading algorithm," Brodsky told analysts on Thursday. "All markets have rules to address these types of situations."

On July 18, Knight reported second-quarter earnings of $3.3 million, down 81 percent from a year earlier after recording a $35.4 million pretax trading loss from the Facebook initial public offering. The company has not yet filed its second-quarter report with regulators.

Knight's average daily U.S. equities market-making volume has fallen from a year ago as trading volumes have declined across the stock market. Daily market-making volume was $19.5 billion in June, a 12 percent decline from a year earlier.

More than 83 million shares of Knight stock have changed hands on Thursday, making it the most actively traded issue on U.S. exchanges.

(Additional reporting by Jed Horowitz, Sam Forgione, John McCrank, Ann Saphir and David Henry; Editing by James Dalgleish and Lisa Von Ahn)

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As the silver waters of the Kishanganga rush through this north Kashmir valley, Indian labourers are hard at work on a hydropower project that will dam the river just before it flows across one of the world’s most militarised borders into Pakistan.

The loud hum of excavators echoes through the pine-covered valley, clearing masses of soil and boulders.

The 330-MW dam shows India’s growing focus on hydropower but also highlights how water is a growing source of tension with downstream Pakistan, which depends on the snow-fed Himalayan rivers for everything from drinking water to agriculture.

Islamabad has complained to an international court that the dam in the Gurez valley, one of dozens planned by India, will affect river flows and is illegal. The court has halted any permanent work on the river for the moment, although India can still continue tunneling and other associated projects.

In the years since their partition from British India in 1947, land disputes have led the two nuclear-armed neighbours to two of their three wars. The next flashpoint could well be water.

“There is definitely potential for conflict based on water, particularly if we are looking to the year 2050, when there could be considerable water scarcity in India and Pakistan,” says Michael Kugelman, South Asia Associate at the Woodrow Wilson International Center for Scholars in Washington.

“Populations will continue to grow. There will be more pressure on supply. Factor in climate change and faster glacial melt … That means much more will be at stake. So you could have a perfect storm which conceivably could be some sort of trigger.”

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It’s not just South Asia — water disputes are a global phenomenon, sparked by growing populations, rapid urbanisation, increased irrigation and a rising demand for alternative power such as hydroelectricity.

Turkey, Syria, Iran and Iraq quarrel over the waters of the Tigris and Euphrates. The Jordan river divides Israel, Jordan, Lebanon and the West Bank, while 10 African countries begrudgingly share the Nile.

In Southeast Asia, China and Laos are building dams over the mighty Mekong, raising tensions with downstream nations.

A U.S. intelligence report in February warned fresh water supplies are unlikely to keep up with global demand by 2040, increasing political instability, hobbling economic growth and endangering world food markets.

A “water war” is unlikely in the next decade, it said, but beyond that rising demand and scarcities due to climate change and poor management will increase the risk of conflict.

MAJOR THREAT

That threat is possibly nowhere more apparent than in South Asia, home to a fifth of humanity and rife with historical tensions, mistrust and regional rivalries.

The region’s three major river systems – the Indus, the Ganges and the Brahmaputra – sustain India and Pakistan’s breadbasket states and many of their major cities including New Delhi and Islamabad, as well as Bangladesh.

“South Asia is symbolic of what we are seeing in terms of water stress and tensions across the world,” says B.G. Verghese, author and analyst at New Delhi’s Centre for Policy Research.

The region is one of the world’s most water-stressed, yet the population is adding an extra 25 million people a year – South Asia’s per capita water availability has dropped by 70 percent since 1950, says the Asian Development Bank.

The effect of climate change on glaciers and rainfall patterns may be crucial.

“Most of the water that is used in Pakistan comes from glacial melt or the monsoon,” says Rafay Alam, an environmental lawyer and coordinator of the water programme at Lahore University of Management Sciences.

The dry months of June-July offer a snapshot of the extreme water crisis in the region.

Hospitals in New Delhi this year cancelled surgeries because they had no water to sterilse instruments, clean operating theatres or even wash hands. Swanky malls selling luxury brands were forced to switch off air conditioners and shut toilets.

In Pakistan, the port town of Gwadar ran out of water entirely, forcing the government to send two naval water tankers. Some government flats in the garrison city of Rawalpindi have not had water for weeks, said the local press.

India, as both an upper and lower riparian nation, finds itself at the centre of water disputes with its eastern and western downstream neighbours — Bangladesh and Pakistan — which accuse New Delhi of monopolising water flows.

To the north and northeast, India fears the same of upstream China, with which it fought a brief border war in 1962. Beijing plans a series of dams over the Tsangpo river, called the Brahmaputra as it flows into eastern India.

DAM DISPUTES

For India, damming its Himalayan rivers is key to generating electricity, as well as managing irrigation and flood control. Hydropower is a critical part of India’s energy security strategy and New Delhi plans to use it to reach about 40 percent of people who are currently off the grid.

A severe power shortage is hitting factory output and rolling outages are routine, further stifling an economy which is growing at its slowest in years.

India’s plans have also riled Bangladesh, which it helped gain freedom from Pakistan in 1971. Relations cooled partly over the construction of the Farakka Barrage (dam) on the Ganges River which Dhaka complained to the United Nations about in 1976. The issue remains a sore point even now.

More recently, Bangladesh has opposed India’s plans to dam the Teesta and Barak rivers in its remote northeast.

But India’s hydropower plans are most worrying for Pakistan.

Water has long been a source of stress between the two countries. The line that divided them in 1947 also cleaved the province of Punjab, literally the land of five rivers – the Sutlej, Beas, Ravi, Chenab and Jhelum, all tributaries of the Indus – breaking up millenniums-old irrigation systems.

India’s latest hydro plans have fanned new tensions.

“Pakistan is extremely worried that India is planning to build a whole sequence of projects on both the Chenab and Jhelum rivers … and the extent to which India then becomes capable of controlling water flows,” says Feisal Naqvi, a lawyer who works on water issues.

In recent years, political rhetoric over water has been on the rise in Islamabad, and militant groups such as the Lashkar-e-Taiba have sought to use the issue to whip up anti-India sentiments – accusing New Delhi of “stealing water”.

India brushes off such fears as paranoia and argues the dams  won’t consume or store water but just delay flows, in line with a 1960 treaty that governs the sharing of Indus waters between the two countries.

SINK OR SWIM

South Asia’s water woes may have little to do with cross-border disputes, however. Shortages appear to be rooted in  wasteful and inefficient water management practices, with India and Pakistan the worst culprits, experts say.

“All these countries are badly managing their water resources, yet they are experts in blaming other countries outside,” says Sundeep Waslekar, president of Strategic Foresight Group, a Mumbai-based think-tank.

“It would be more constructive if they looked at what they are doing at home, than across their borders.”

Their water infrastructure systems, such as canals and pipes used to irrigate farm lands, are falling apart from neglect. Millions of gallons of water are lost to leakages every day.

The strain on groundwater is the most disturbing. In India, more than 60 percent of irrigated agriculture and 85 percent of drinking water depend on it, says the World Bank. Yet in 20 years, most of its aquifers will be in a critical condition.

Countries must improve water management, say experts, and share information such as river flows as well as joint ventures on dam projects such as those India is doing with Bhutan.

“Populations are growing, demand is increasing, climate change is taking its toll and we are getting into deeper and deeper waters,” says Verghese, author of ‘Waters of Hope: Himalayan-Ganga cooperation for a billion people’.

“You can’t wait and watch. You have to get savvy and do something about it. Why get locked into rhetoric? We need to cooperate. Unless you learn to swim, you are dead.”

This blog is part of AlertNet’s “The Battle for Water” multimedia report. Find out more here.

(Additional reporting by Rebecca Conway and Qasim Nauman in Islamabad and Sheikh Mustaq in Srinagar; Editing by Raju Gopalakrishnan and Sonya Hepinstall)

Picture credit: Engineers and workers work at the tunnels of Kishanganga power project in Gurez, 160 km (99 miles) north of Srinagar, Indian-administered Kashmir, June 21, 2012. REUTERS/Fayaz Kabli

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