The UK, the US and Japan are to form a joint fund to help developing countries slash their greenhouse gas emissions.
It was announced at a meeting of G7 finance ministers and central bank governors in Tokyo on Saturday.
Japan's leader Yasuo Fukuda proposed the new fund at the World Economic Forum in Davos, Switzerland, last month.
The fund will be managed by the World Bank and aims to 'scale up' investment and use clean technologies in developing nations.
US president George Bush said in his final State of the Union message last month that America will contribute $2 billion (£1 billion).
Japan is to also call on non-G7 nations to participate.
Chancellor Alistair Darling said other countries have expressed interest in the fund.
"They want to be sure that a new fund will help and do things existing funding is not able to do," he told journalists.
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