Death knell tolls for G8, new body seen forming

L'AQUILA, Italy (Reuters) - World leaders signaled the demise of the Group of Eight wealthy nations club on Friday, saying only a forum that included the major developing economies could decide on important global issues.

The G8 is made up of rich northern hemisphere countries, but problems such as climate change and the economic crisis have revealed its limitations.

"One thing that is absolutely true is that for us to think we can somehow deal with some of these global challenges in the absence of major powers like China, India and Brazil seems to be wrongheaded," U.S. President Barack Obama told reporters.

The G8, comprising the United States, Japan, Germany, Italy, France, Britain, Russia and Canada, has invited other countries to its meetings in recent years on an ad hoc basis.

During its annual summit in central Italy this week it met the leaders of China, India, Brazil, Mexico, South Africa and Egypt, spontaneously forming the so-called G14.

Prime Minister Silvio Berlusconi said he thought this new grouping would become the dominant international talking shop.

"As far as I am concerned the G14 is the format that in the future will have the best possibility to take the most important decisions on the world economy, and not just that," he said.

South African President Jacob Zuma welcomed the shift toward a bigger forum. "It is a recognition that you couldn't just continue with the G8 when the global matters that are being discussed affect many countries," he told a news conference.

G20 ALSO WANTS THE LIMELIGHT

French President Nicolas Sarkozy also backed the G14, which represents 80 percent of the global economy. "We will put the G14 in place in 2011 when France chairs the G8," he said.

Also jostling for prominence on the world stage is the much broader G20, which came to the fore last year to tackle the financial crisis. German Chancellor Angela Merkel said this would be a crucial body in the future, but Berlusconi disagreed.

"When more than 15 people sit around a table you have a problem with discussions and debate ... it becomes formal and static," he said.

Canada, which takes the G8 chair next year, said it would expand discussions but Prime Minister Stephen Harper did not specify who would be invited, joking that at various times in L'Aquila he had seen a G8, G9, G14, G18, G19, G25 and G28.

"I think our challenge for the year ahead will be to use our presidency to bring some coherence to this as we move forward."

Harper and Merkel, neither of whose countries are permanent members of the U.N. Security Council and who relish the exclusivity of the G8, said they wanted the club to survive.

"There are issues, for which the G8 is the appropriate body in our view," Merkel said.

The G8 began as a fireside chat for six nations in France in 1975. Canada and Russia joined the party in later years and the meetings swelled into events drawing thousands of officials and journalists. Myriad other international summits have also sprung up to involve ever more countries.

"We are in a transition period," Obama said on Friday. "The one thing I will be looking forward to are fewer summit meetings ... I think there is a possibility to streamline them and make them more effective."

(Writing by Crispian Balmer; editing by Janet McBride)