Agreement remains elusive as Copenhagen enters last day

The Copenhagen Summit has entered its final day with emotions amongst diplomats continuing to lurch between optimism and pessimism at the prospect of getting a deal.

Negotiators worked through the night to hammer out a draft agreement for world leaders to discuss later today.

Optimism had been climbing that sufficient ground had been ceded by the US and China to deliver a workable agreement, but diplomats emerging from the eleventh hour negotiations this morning said that large gaps remained in the draft text.

"There is still no text for the heads of state to negotiate," a German negotiator told reporters. "There are no results on anything. We have only several drafts. It's very, very difficult. Time is running out."

According to reports, negotiators did reach a compromise on climate funding and a target for temperature rises, with the final agreement expected to contain a commitment to keep temperature rises below two degrees, provide $100bn (£61bn) a year in funding for poor countries from 2020 and launch a $30bn (£18bn) fast track fund from next year.

There is also thought to be tentative agreement on reforms to the carbon market and the expansion of initiatives to protect rainforests.

However, there is still no agreement on the key issues of emission targets for developed and developing nations and proposals for an independent verification mechanism for greenhouse gas emissions, which has emerged as a major deal breaker for the US and other industrialised countries.

There is also ongoing confusion about the structure of any deal. "The situation is desperate," one top Indian negotiator told Reuters. " There is no agreement on even what to call the text - a declaration, a statement or whatever. [Rich nations] want to make it a politically binding document which we oppose."

The overnight talks follow a day of high drama yesterday that saw the summit saved from the brink of collapse by a conditional offer from US Secretary of State Hillary Clinton that the US would to support plans for a $100bn a year climate fund from 2020 if China accepts the independent verification of its greenhouse gas emissions.

Industrialised nations also smoothed the way for a deal by shelving controversial plans to replace the Kyoto Protocol with an alternative draft agreement - a move that had angered developing countries which interpreted it as an attempt to water down rich nations' obligations.

All attention now turns to US president Barack Obama who will address the summit this morning. It is hoped that he will make more detailed funding commitments from the US, although it remains highly unlikely that he will announce more ambitious emission targets.

He is also expected to call on the Senate to pass the proposed US climate bill and detail a little known part of the bill that would allow the US to raise $4bn (£2.4bn) a year to help developing countries adapt to climate change through the auctioning of carbon allowances under its proposed cap-and-trade scheme.