As thousands of anti-globalisation demonstrators arrived in Prague yesterday for a day of protest today, the World Bank attempted to appease its critics by admitting that international action against Third World poverty has often been misguided and ineffective.

The World Bank president, Mr James Wolfensohn, said international organisations were neither the cause nor the agents of globalisation but had an obligation to ensure the removal of trade barriers benefited the many rather than the few.

"The central issue both inside and outside the building is that globalisation has many advantages but many dangers. Our responsibility is to make sure that the opportunities are taken advantage of and the dangers diminished," he said.

Protesters will today try to besiege the Prague conference centre where the World Bank and the International Monetary Fund (IMF) are holding the annual meeting. Demonstrators will al low delegates to enter the building but hope to prevent them leaving until their demands are met.

At a forum held on the fringes of this week's annual meeting, anti-poverty campaigners expressed frustration over the failure of the international institutions to move more swiftly to write off the debts of the world's poorest countries. U2's Bono, representing the Jubilee 2000 coalition of charities and church groups, described it as an obscenity that for each dollar of aid poor countries received, $8 is paid back in debt servicing.

He said: "19,000 children a day are dying. If the debt situation was happening in London or Prague we would call it a holocaust."

Bono welcomed the steps taken so far by the World Bank to reduce debt but criticised its decision to limit debt forgiveness to an average of 65 per cent of total debts.

"We want to help the president of the World Bank finish the act he has started. We want to end the year with a far more historic act than we began it with. The idea of cutting the debts of the poor countries to the rich countries, at a time of unimaginable prosperity in the world, is the only idea that people will remember 2000 for," he said.

A World Bank report published yesterday conceded it was not enough to promote economic growth in poor countries and that issues such as the environment and educational opportunity needed more attention from international institutions. The bank's chief economist, Mr Nicholas Stern, said the transition from communism to a free market system in central and Eastern Europe had shown it was a mistake to liberalise economies without establishing effective regulatory structures.

"One of the key lessons which we have all learned from the experience of transition over the last 10 years or so is that we did not pay enough attention to the quality of institutions and to building institutions."

The Minister for Finance, Mr McCreevy, will address the IMF tomorrow and Irish anti-poverty groups hope he will build on the Taoiseach's recent commitment to quadruple the Republic's international aid budget by calling for a complete write-off of all Third World debt.