Around £15 billion is needed over the next four years to guarantee every child a school place in a safe environment, research has suggested.
Nearly £5 billion is considered essential for the next financial year (2011-12) alone to ensure youngsters are taught in safe and structurally sound classrooms, it found.
The study, conducted by the Local Government Association (LGA) and the Association of Directors of Children's Services (ADCS), questioned local councils on their capital needs for education and children's services, and how much of this is necessary to meet mandatory requirements on providing school places and health and safety. Around 40% of authorities replied.
The findings, extrapolated to include councils that did not respond, show that £15 billion is the minimum investment, considered "essential" by local authorities, to ensure that every child has a safe school place.
Of this, £4.7 billion is deemed essential for 2011-12.
Overall, councils said they need £29.3 billion over the next four years - including the £15 billion "essential" investment.
This money includes a small amount for children's services capital investment, such as children's homes.
LGA chairman Baroness Margaret Eaton said: "Everyone is well aware of the difficult financial climate in which councils are operating. We need to work even harder to ensure that the money that is invested in school buildings represents the best possible value for the taxpayer.
"Our children need schools which are safe, clean and attractive places in which they can learn. Spending money to maintain or replace existing school buildings is unavoidable. Areas experiencing booming birth rates need to be able to expand primary schools so that every child has a place not too far from their home."
Concerns have previously been raised that not enough is being done to tackle a shortage in primary places, a particular problem in big cities such as London. The shortage has been blamed partly on rising birth rates and funding issues.
Around £15 billion is needed over the next four years to guarantee every child a school place in a safe environment, research has suggested.
Nearly £5 billion is considered essential for the next financial year (2011-12) alone to ensure youngsters are taught in safe and structurally sound classrooms, it found.
The study, conducted by the Local Government Association (LGA) and the Association of Directors of Children's Services (ADCS), questioned local councils on their capital needs for education and children's services, and how much of this is necessary to meet mandatory requirements on providing school places and health and safety. Around 40% of authorities replied.
The findings, extrapolated to include councils that did not respond, show that £15 billion is the minimum investment, considered "essential" by local authorities, to ensure that every child has a safe school place.
Of this, £4.7 billion is deemed essential for 2011-12.
Overall, councils said they need £29.3 billion over the next four years - including the £15 billion "essential" investment.
This money includes a small amount for children's services capital investment, such as children's homes.
LGA chairman Baroness Margaret Eaton said: "Everyone is well aware of the difficult financial climate in which councils are operating. We need to work even harder to ensure that the money that is invested in school buildings represents the best possible value for the taxpayer.
"Our children need schools which are safe, clean and attractive places in which they can learn. Spending money to maintain or replace existing school buildings is unavoidable. Areas experiencing booming birth rates need to be able to expand primary schools so that every child has a place not too far from their home."
Concerns have previously been raised that not enough is being done to tackle a shortage in primary places, a particular problem in big cities such as London. The shortage has been blamed partly on rising birth rates and funding issues.
English athletes have begun arriving in New Delhi as the chaos-hit Commonwealth Games was seemingly brought back from the brink.
Sporting bodies in England on Thursday night agreed "unanimously" in favour of dispatching the entire squad to India for the tournament, which is due to start on October 3.
An advance team of 22 flew out late on Thursday night from Heathrow, with others due to follow them in the coming days.
Organisers earlier soothed the concerns of participating nations by giving a number of assurances over the safety of stadiums and improvements to the athletes' village.
The move followed a series of mishaps at the site of the Games, including a footbridge collapsing at the main arena and a ceiling caving in at the weightlifting venue.
In addition, teams hit out at accommodation for athletes described as "unfit for human habitation".
At least eight nations expressed reservations over the haphazard preparations for the Games.
Individual athletes, including reigning Commonwealth triple jump champion Phillips Idowu, have decided not to attend over safety fears.
Ongoing concerns over the structure of venues and accommodation conditions had risked the far more damaging prospect of entire teams pulling out of the event.
Team Wales said in a statement that it is "confident in the assurances that have been provided", while Team Scotland's representative Jon Doig said the team should be in a position today to confirm that athletes will travel to Delhi on Saturday.
The Queen was reportedly refused an anti-poverty grant to help heat her palaces because Whitehall officials feared it would cause a public relations backlash.
In an effort to cut the Royal Household's soaring electricity and gas bills, a senior aide wrote to the Department for Culture, Media and Sport in 2004 to ask if the Queen would be eligible for a handout from a £60m energy-saving fund.
He complained that the cost of royal utilities, which doubled in 2004, stood at £1m a year and had become "untenable" and that the £15m Government grant to maintain the Queen's palaces was inadequate.
The request for a grant to replace four combined heat and power (CHP) units at Buckingham Palace and Windsor Castle was turned down in August 2004, according to documents obtained by The Independent under the Freedom of Information Act.
In an apologetic email sent to the Palace, it was explained that the handouts were aimed at schools, hospitals, councils and housing associations for heating programmes which benefit low-income families.
The official also expressed concern that if Buckingham Palace was given money from the fund it would lead to "probable adverse press coverage".
The email said: "I think this is where the Community Energy Funding is directed and ties in with most allocations going to community heating schemes run by local authorities, housing associations, universities etc.
"I also feel a bit uneasy about the probable adverse press coverage if the Palace were given a grant at the expense of say a hospital. Sorry this doesn't sound more positive."
A Buckingham Palace spokeswoman declined to comment on the disclosures.
The first woman executed in the United States in five years was put to death in Virginia for arranging the killings of her husband and a stepson over a $250,000 (£159,337) insurance payment.
Teresa Lewis, 41, died by injection at 0113 GMT on Friday, authorities said, becoming the first woman executed in Virginia in nearly a century.
Supporters and relatives of the victims watched her execution at Greensville Correctional Centre in Jarratt.
Lewis enticed two men through sex, cash and a promised cut in an insurance policy to shoot her husband, Julian Clifton Lewis Jr, and his son, Charles, as they were sleeping in the couple's mobile home in October 2002. Both gunmen were sentenced to life in prison and one committed suicide in 2006.
Lewis appeared fearful, her jaw clenched, as she was escorted into the death chamber. She glanced tensely around at the 14 assembled corrections officials before being bound to a gurney with heavy leather straps.
In the moments before her execution, Lewis asked if her husband's daughter was there. Kathy Clifton, Lewis's stepdaughter, was in an adjacent witness room blocked from the inmate's view by a two-way mirror. "I want Kathy to know that I love her and I'm very sorry," Lewis said.
Then, as the drugs flowed into her body, her feet bobbed but she otherwise remained motionless. A guard lightly tapped on her shoulder reassuringly as she slipped into death.
More than 7,300 appeals to stop the execution - the first of a woman in Virginia since 1912 - had been made to the governor in a state second only to Texas in the number of people it executes.
Texas held the most recent US execution of a woman in 2005. Out of more than 1,200 people put to death since the US Supreme Court reinstated capital punishment in 1976, only 11 have been women.
The 41-year-old, who defence attorneys said was borderline mentally disabled, had inspired other inmates by singing Christian hymns in prison. Her fate had also drawn appeals from the European Union, an indignant rebuke from Iran and the disgust of thousands of people.
Government ministers have reportedly drawn up a list of 177 taxpayer-funded bodies which will be abolished in a "bonfire of the quangos".
The Cabinet Office list includes the Health Protection Agency, which provides advice on infectious diseases and environmental hazards, and the Human Fertilisation and Embryology Authority, which regulates fertility clinics, reported the Daily Telegraph.
A further four bodies will be privatised and 129 merged, while another 94 - including the BBC World Service - are still under threat of being scrapped, according to the list seen by the newspaper. Some 350 bodies have been reprieved.
If confirmed, the cull of public bodies will save billions of pounds from Government spending, cost thousands of jobs and spark enormous political controversy, with critics accusing the Government of removing vital protections for the public.
The list confirms previous announcements that the Audit Commission, UK Film Council and eight regional development agencies are to be abolished. Others slated for the chop include the Commission for Rural Communities, the Commission for Integrated Transport, the School Food Trust and the Sustainable Development Commission.
More than 50 bodies linked to the Department for Environment, Food and Rural Affairs are in line to be scrapped, while around 30 health bodies will be axed or have their functions transferred to the Department of Health.
The British Council, Environment Agency, Competition Commission, Design Council, Energy Savings Trust, Equality and Human Rights Commission, the Forestry Commission and the Office for Fair Trading are among the 94 publicly funded bodies whose fate has yet to be decided.
The Telegraph quoted unnamed Whitehall insiders as suggesting that the majority of them are likely to be abolished, lose their public funding or face radical reform.
In line for merger are the National Lottery Commission and Gambling Commission, which will become one single regulator, according to the document. Other mergers include a new heritage body taking in the current English Heritage, the National Memorial Fund and the National Lottery Fund and the postal regulator Postcomm having its functions brought under communications regulator Ofcom.
Four bodies - the Film Industry Training Board, the Construction and Skills Training Board, the Engineering Construction Industry Training Board and the Tote Board - will be privatised.
Britain has given the US a direct promise that it will keep its nuclear deterrent and maintain special forces following the upcoming strategic defence and security review.
Defence Secretary Liam Fox made the pledge in talks with US counterpart Robert Gates this week after the Pentagon expressed concern at the scale of spending cuts planned by the coalition Government, reported The Times.
Dr Fox was told by Chancellor George Osborne to find savings of 10%-20% in its £39 billion annual budget as part of his austerity drive to wipe out the structural deficit within this Parliament.
The strategic review has led to concerns that the Royal Navy may lose its new aircraft carriers, while RAF bases could be closed and Army manpower cut.
Questions were raised over the £20 billion replacement of Britain's ageing Trident nuclear deterrent at this week's Liberal Democrat conference, where defence minister Nick Harvey suggested a decision may be delayed until after the election scheduled for 2015.
Speaking to Mr Gates on Wednesday, Dr Fox is reported to have promised that Britain will retain the ability to mount medium-scale operations overseas, but not at the level of the 10,000-strong deployment in Afghanistan.
He suggested that the review - due to report ahead of Mr Osborne's October 20 spending review - may leave the armed forces able to take part in operations involving around 6,000 troops in a campaign sustained for a reasonable length of time.
And he promised that Britain would continue with the Joint Strike Fighter programme to provide combat aircraft to serve on the two proposed carriers.
The enthusiastically Atlanticist Dr Fox told The Times that in the defence review "we need to concentrate on where we think we can be best contributors as an ally to the US".
Mr Gates is reported to have said that he wanted Britain to keep Trident because he did not want the US to have "sole responsibility" for providing a nuclear umbrella for Nato.
An Army expert who has cleared more roadside bombs than anyone else in history has been awarded the George Medal.
Sergeant Major Karl Ley, 29, made safe 139 improvised explosive devices (IEDs) planted by the Taliban during a six-month tour of Helmand Province in Afghanistan.
This was more than twice as many as any other bomb disposal expert, and his medal citation praised his "sheer determination, guile and awesome bravery".
On one operation he defused 42 IEDs within just 72 hours, and at times he had to clear bombs with insurgent mortars and gunshots landing as little as 30m (100ft) away from him.
But Sgt Maj Ley, a married father-of-three from Sheffield, South Yorkshire, modestly played down his courage under fire.
He joked: "If you're being shot at, you get down on the deck. So you might as well get rid of the bomb while you're down there."
Asked what went through his head when he was defusing a Taliban bomb, he said: "We really do just see it as a job, something that needs to be done. I'm generally thinking of my next meal more than anything else."
The soldier, who has been promoted since his tour of Helmand, was hailed for accepting an "incredibly high" level of personal risk to make routes safe for his comrades and Afghan civilians.
Sgt Maj Ley, who previously served in Iraq and Northern Ireland, was only paid an extra £20 a day while he was in Afghanistan for his incredibly dangerous work. He said his wife and children were happy he was home and he was getting on with mundane household chores. "I'm halfway through a list of jobs my wife had ready for me - I've just slipped right back into normal family life," he said.
The soldier said he planned to celebrate his medal with "a few beers" and possibly a trip to watch a Sheffield Wednesday game.
Iran's hardline President Mahmoud Ahmadinejad provoked yet another controversy on Thursday, saying a majority of people in the United States and around the world believe the American government staged the September 11 terror attacks in an attempt to assure Israel's survival.
The provocative comments prompted the US delegation to walk out of Mr Ahmadinejad's UN speech, where he also blamed the US as the power behind UN Security Council sanctions against Iran for its refusal to halt uranium enrichment, a technology that can be used as fuel for electricity generation or to build nuclear weapons.
Delegations from all 27 European Union nations followed the Americans out along with representatives from Australia, New Zealand, Canada and Costa Rica, an EU diplomat said.
Mr Ahmadinejad said the US has allocated $80 billion to upgrade its nuclear arsenal and is not a fair judge to sit as a veto-wielding permanent member of the Security Council to punish Iran for its nuclear activities. Iran denies it is seeking a nuclear weapon.
The Iranian leader - who has in the past cast doubt over the US version of the September 11 2001 attacks - also called for an independent fact-finding UN team to be established to probe the attacks. That, he said, would keep the terror assault from turning into what he has called a sacred issue like the Holocaust, where "expressing opinion about it won't be banned".
Mr Ahmadinejad did not explain the logic behind blaming the US for the terror attacks but said there were three theories: One, he said, was that a "powerful and complex terrorist group" penetrated US intelligence and defences, which is advocated "by American statesmen".
Another, he said, was that "some segments within the US government orchestrated the attack to reverse the declining American economy and its grip on the Middle East in order also to save the Zionist regime. The majority of the American people as well as other nations and politicians agree with this view".
After Mr Ahmadinejad uttered those words, two American diplomats stood and walked out without listening to the third theory that the attack was the work of "a terrorist group but the American government supported and took advantage of the situation".
Mark Kornblau, spokesman of the US Mission to the world body, issued a statement within moments of the walkout, saying: "Rather than representing the aspirations and goodwill of the Iranian people, Mr Ahmadinejad has yet again chosen to spout vile conspiracy theories and anti-Semitic slurs that are as abhorrent and delusional as they are predictable."
Mr Ahmadinejad said the US used the September 11 attacks as a pretext to invade Afghanistan and Iraq, killing hundreds of thousands of people. He argued that the US, instead, should have "designed a logical plan" to punish the perpetrators and not occupy two independent states and shed so much blood.
Europe's foreign policy chief has condemned Iranian claims of US government complicity in the 9/11 terrorist attacks on America.
Baroness Ashton took part in a mass walkout from the United Nations General Assembly meeting on Thursday during a speech by Iranian President Mahmoud Ahmadinejad in which he claimed the majority of Americans believed in the theory of Washington's involvement.
Mr Ahmadinejad said there was worldwide speculation that "some segments within the US government orchestrated the attack to reverse the declining American economy and its grips on the Middle East in order also to save the Zionist regime".
He added: "The majority of the American people, as well as other nations and politicians, agree with this view."
The American-led walkout was joined by officials from all 27 EU countries.
Baroness Ashton was there as the EU's High Representative for Foreign Affairs and said in a statement on Friday: "The assertions made by the Iranian president at the UN that the United States was in any way responsible for the 9/11 terrorist attacks, or that the majority of people in the US believe this to be the case, is outrageous and unacceptable.
"It is for this reason that all representatives of the 27 nations of the EU walked out of the United Nations General Assembly hall."
She added: "On behalf of the EU, I would like to express my solidarity with the families and friends of those killed or injured in the 9/11 attacks."
Meanwhile, Washington condemned the Iranian president's remarks as "abhorrent and delusional".
The head of the civil service has launched a mole-hunt after the leak of lists of around 180 public bodies apparently facing abolition in a "bonfire of the quangos".
The lists, obtained by the Daily Telegraph and BBC, indicated that organisations ranging from the Health Protection Agency to the Human Fertilisation and Embryology Authority, Commission for Integrated Transport and School Food Trust are in line for the axe.
But Cabinet minister Eric Pickles suggested they were out of date, saying the Government's plans "may have moved on" since it was drawn up.
"We did say we were going to reduce the number of quangos," the Communities Secretary told BBC Radio 4's Today programme.
"We will be making an announcement in due course. It's a bit dated, that document. I think things may have moved on."
Cabinet Secretary Sir Gus O'Donnell ordered an immediate investigation into the leak. A Cabinet Office spokesman said: "We deeply regret any extra uncertainty for employees that this irresponsible leak has caused."
A document, dated August 26 and seen by the BBC's Politics Show, named 180 quangos which would be abolished, 124 to be merged, 56 to be retained "with substantial reform" and 282 to be preserved. The fate of a further 100 had not yet been decided.
Meanwhile, a separate - but very similar - undated list obtained by the Telegraph put the figures at 177 abolitions, four privatisations, 129 mergers, 350 reprieves and 94 yet to be decided.
In a letter to Deputy Prime Minister Nick Clegg, Cabinet Office Minister Francis Maude said that the changes "are intended primarily to increase accountability, but will also support the aims of the spending review by reducing costs and support our ambitions for a Big Society by encouraging alternative devolved or non-state delivery models".
If implemented, the cull of public bodies will cost thousands of jobs and spark enormous political controversy, with critics accusing the Government of removing vital protections for the public.
A paedophile postman who used Facebook and Bebo to groom hundreds of children for sex has been jailed for eight-and-a-half years.
After creating at least eight fake online profiles, Michael Williams, 29, targeted youngsters he met on his post round, on school runs as a taxi driver and in his role as secretary of a football club.
At an earlier hearing at Truro Court Court, Williams admitted 27 charges of inciting sexual activity, grooming and distributing indecent images.
He also pleaded guilty to voyeurism and possessing indecent images.
Devon and Cornwall Police have identified about 500 victims he groomed or abused but believe there could be up to 1,000 youngsters in total because hundreds are too scared to come forward.
Williams, of Tresooth Lane, Penryn, worked as a postman in his home town, where he was regarded as cheerful and helpful.
He befriended many people on his rounds - including youngsters. But he would also pursue the children using social networking sites - sometimes using false names and posing as a teenager. He even dyed his hair different colours to hide his identity.
Many victims were tricked into performing sex acts on a webcam but he convinced others to meet him in parks, on beaches and at his home, where he abused them.
Police found thousands of indecent images on his computer and it is believed he would secretly film children as they undressed on nearby beaches.
Williams's former employer, Royal Mail, said it suspended him as soon as the police informed it of the investigation and he was dismissed after his arrest in February. He was also former secretary of Falmouth Town Football Club.
The prison population in England and Wales has reached a record high.
The total reached 85,368 - 167 more than the previous record of 85,201 reached on May 21, figures released by the Ministry of Justice show.
The usable operational capacity was 87,628, the figures also reveal.
Justice Secretary Kenneth Clarke plans to reform sentencing and penalties, saying the prison population is too high and that there should be greater emphasis on rehabilitation and community sentences.
A Prison Service spokesman said: "The total prison population on Friday September 24 2010 was 85,368, of which 0 prisoners were held overnight under Operation Safeguard. This is 176 more than last Friday, when the total was 85,192.
"Usable operational capacity on September 24 was 87,628. In addition, Operation Safeguard remains in place and can provide up to 400 places."
The prison population, which consists of 81,086 men and 4,282 women, is almost 1,000 more than the corresponding Friday 12 months ago when the total was 84,382, the Ministry of Justice said.
The figure is also more than 14% higher than six years ago, figures for previous years showed. The total stood at 74,606 on the corresponding Friday in September 2004, 77,291 in 2005, 79,642 in 2006, 81,133 in 2007 and 83,508 in 2008.
Jon Collins, campaign director for the Criminal Justice Alliance which represents 48 organisations, said the figures are a warning for the Government that they must act urgently to reduce the number of people in prison. He said: "There isn't the money available for the Government to try and build their way out of this prisons crisis.
"Two decades of mismanagement of the criminal justice system have resulted in a huge and unsustainable prison population. Unless action is taken to reduce the number of people in custody, the prison system will be simply unable to cope."
The threat level to Great Britain from Irish-related terrorism has gone from moderate to substantial, meaning an attack is a "strong possibility", Home Secretary Theresa May said.
It is the first time that this threat level has been published, the Home Office said.
The threat from international terrorism remains severe.
Mrs May said: "The director-general of the Security Service has informed me that he has raised the threat to Great Britain from Irish-related terrorism from moderate to substantial, meaning that an attack is a strong possibility.
"Judgments are based on a broad range of factors, including the intent and capabilities of terrorist groups.
"This is the first time we have published the Irish-related threat assessment to Great Britain. This is in the interests of transparency and to encourage people to remain vigilant. The first and most important duty of government is the protection and security of the British people.
"We have been consistent in stating that the threat to the UK from terrorism is real and serious. The balance we aim to strike is keeping people alert but not alarmed.
"I would urge the public to report any suspicious activity to the police and security services in their continuing efforts to discover, track and disrupt terrorist activity."
The threat assessment was being published for the first time "to encourage people to be alert to the increased threat from Irish-related terrorism", the Home Office said. But the threat is still lower than the overall threat level to the UK from international terrorism, published by the Joint Terrorism Analysis Centre (Jtac), which remains at severe, meaning an attack is highly likely.
"Measures taken to deal with the international terrorist threat will also counter the threat from Irish dissident republican terrorism," a Home Office spokeswoman said. "In general, the public should not expect any visible change in our security measures."
Ken Livingstone has vowed to eject Boris Johnson from City Hall after he was selected as Labour's candidate for the London mayoral elections of 2012.
And Mr Livingstone said the mayoral vote in Olympic year will provide a springboard to take on the coalition Government and return Labour to power nationally.
He said his message to those worried by David Cameron and George Osborne's cuts was: "If you want them out, first vote Boris out."
Mr Livingstone beat former MP Oona King by a margin of more than two-to-one in the ballot, scooping 68.6% of votes to her 31.4% and leading among both party activists and affiliated union members in the capital.
His victory - a day before Labour chooses its new national leader - sets the scene for a re-run of the 2008 poll, when he was ousted by Conservative Mr Johnson after eight years as mayor.
As well as giving him an opportunity to avenge that defeat, the 2012 poll has added spice because its victor will represent London at the Olympic and Paralympic Games, which open a few weeks after the election.
Denouncing the current Mayor as a "joker", Mr Livingstone said his task was now to turn out his "disastrous administration in City Hall".
He unveiled a platform of policies for his fourth tilt at the mayoralty, including a pledge to keep public transport fares lower than they would have been under Mr Johnson, funded by the extension of the road traffic congestion charge zone into west London.
Other pledges include a victims' commissioner for those affected by crime; guaranteed neighbourhood policing; using new technology to make London a "smart city"; protecting the green belt; and encouraging emerging economic giants like China, India and Brazil to make London their preferred base for European operations.
Mr Livingstone said: "The London election in 2012 will be the chance to send a message to David Cameron and George Osborne that we don't want devastating cuts to our public services, fewer jobs, and declining living standards. If you want them out, first vote Boris out."
President Barack Obama has condemned as "offensive" and "hateful" the suggestion of Iranian President Mahmoud Ahmadinejad that the September 11 attacks might have been orchestrated by the US government.
The US president's remarks in an interview with BBC Persian Television came a day after the Iranian leader included the incendiary comment in his speech to the UN General Assembly. It prompted a walkout by the US delegation and others.
"For him to make a statement like that was inexcusable," Mr Obama said in an interview at his New York hotel. "It was offensive. It was hateful. And particularly for him to make the statement here in Manhattan, just a little north of Ground Zero, where families lost their loved ones, people of all faiths, all ethnicities who see this as the seminal tragedy of this generation."
In his speech, Mr Ahmadinejad suggested investigating allegations that "some segments within the US government" orchestrated the attacks in a bid to aid Israel.
US officials immediately denounced the remarks as "abhorrent" and accused Mr Ahmadinejad of trafficking in conspiracy theories.
In Mr Obama's UN address on Thursday, he reiterated calls for Tehran to end its nuclear defiance and prove to the world its uranium enrichment programme is purely peaceful.
But he also said the door remains open to talks that could end Iran's sanctions and isolation.
Tehran has recently indicated interest in restarting talks with the West. The five permanent members of the UN Security Council and Germany made another offer on Wednesday to enter negotiations.
White House officials said Mr Obama agreed to the interview because of the audience of millions who listen to the BBC Farsi-language services inside Iran on radio, television and via the internet.
"Iran is a very dynamic new media society," said Mr Obama's deputy national security adviser, Ben Rhodes. "We anticipate lots of blogging, lots of interest."
A firearms officer has told an inquest that he "could not justify" shooting barrister Mark Saunders as he drunkenly waved a shotgun in the air.
The officer, known only as Alpha Zulu 14 (AZ14), said the 32-year-old did not appear to aim the 12-bore weapon at police surrounding his home in Markham Square, Chelsea.
He told Westminster Coroner's Court that he could not see if the gunman had his finger on the trigger in the seconds before he was fatally wounded in a volley of police shots.
The court heard the breach of Mr Saunders's shotgun was found in an "open" position, suggesting it could not have been fired, when officers stormed his home.
AZ14, a member of Scotland Yard's diplomatic protection group, was one of the first armed officers to arrive after Mr Saunders blasted his shotgun on May 6, 2008.
Giving evidence, the officer said he was in the basement of 1 Bywater Street when the fatal shots were fired at 9.32pm, but did not pull the trigger himself.
He said: "If I did not believe the firearm was pointing at anybody I was not going to pull the trigger.
"I have to believe there is a threat to life. That threat to life is going to come when I believe the firearm is pointing at somebody. Until that happens I am not justified in my actions to pull the trigger."
In a statement written after the shooting, AZ14, who was armed with an MP5 carbine, said he could not be "certain" anyone was in the line of fire.
He said: "I could also not see his hand in relation to the trigger. At this moment I could not justify taking a shot."
David Cameron has sought to allay concerns about looming cuts as he set out his vision of a brighter future if the deficit is successfully tackled.
The Prime Minister said there would be "more jobs, higher growth, (a) stronger economy" once Britain's finances are on a better footing - even hinting that tax cuts could follow as the Government would look to "give people back something from a growing economy".
In a newspaper interview, he acknowledged a need to reassure the public that the swingeing cuts expected in next month's cross-governmental spending review were part of a plan to restore the country's economic fortunes.
"You've got to describe what you want the world to look like when it's all over," he said. "That is, that there will be more jobs, higher growth, stronger economy. There will be an ability over time, once you've sorted out debts and deficits, to give people back something from a growing economy. I nearly said, share the proceeds of growth.
"The economy is the sum of the actions of people in it and they should share in the growth. Give people a sense that we are going to get through this problem. Solve the problem of the deficit; we'll have a stronger, fairer, greener, more balanced economy. There's no point promising people things that you can't deliver (but) deal with it and get us back into a situation where we can pay our way in the world then the more likely it is over time we can all share in the growth."
Mr Cameron warned against scaremongering at the likely impact of cuts, in light of predictions from police chiefs that spending reductions could result in "Christmas for criminals".
"Everyone should be careful with the language they use and they shouldn't be alarmist," the Prime Minister said, adding he thought people understood the need for the cuts. "I think we can (win the argument) because the public do agree that deficit is a problem and you've got to do the job properly rather than get it half-done."
But amid concerns that universal benefits such as the winter fuel payment and child benefit could fall victim to cutbacks, the Prime Minister conceded: "You do have to look at whether we can afford to pay all the benefits that we are paying out and whether they are fair."
Mr Cameron said that reducing the deficit was one of a number of "red lines" protecting Conservative interests in the coalition with the Liberal Democrats.
And with either David or Ed Miliband expected to be crowned Labour leader, the Prime Minister challenged both brothers to set out how they would restore Britain's finances. He said: "They both face the same central question, which is 'what would you do?' We have this biggest deficit in Britain's peacetime history and they seem to have no answer. Until you've got an answer to it, I don't think there's a lot to say."
A new Government banking watchdog has revealed it will consider splitting up "too big to fail" banks to break their stranglehold on the high street under a year-long probe into bank reforms.
The Independent Commission on Banking (ICB) said it will ask "hard questions" on the structure of Britain's banks, looking at whether to break up big groups to improve competition and separate retail from investment banking operations.
Retail banking is dominated by the big players following the financial crisis, with the top six groups accounting for 88% of UK deposits.
But the ICB said on Friday it would explore the most radical options that could force market leaders such as Lloyds Banking Group to sell off assets.
It will also consider plans to hive off investment banking businesses from retail deposit operations, potentially putting the likes of Barclays and HSBC in the firing line.
Calls to ring-fence deposits from so-called "casino" banks have mounted since the credit crunch, with Business Secretary Vince Cable a vocal supporter of so-called "narrow banking".
But the commission faces a difficult balancing act amid growing threats of a bank exodus from the UK after recent threats from banks such as HSBC and Standard Chartered.
It also risks increasing the cost of credit to consumers if recommendations are too harsh on lenders.
Sir John Vickers, the former chairman of the Office of Fair Trading, who has been tasked with chairing the ICB, stressed today's opening report was a "questions paper and not an answers paper".
The commission will weed out the least practical options for an interim report on potential solutions next spring.
Police are investigating the death of a one-month-old baby girl.
Detectives were called after the girl, from Plymstock, Plymouth, was admitted to the city's Derriford Hospital on Thursday night.
She was taken to the high-dependency unit, where she died earlier on Friday.
A Devon and Cornwall Police spokesman said: "Police continue to investigate the circumstances leading up to the death, but at the moment it is being treated as unexplained."
A post-mortem examination will be carried out early next week in a bid to establish what caused her death.
Thousands of consumers look set to miss out on financial advice when new rules come into force because they are not prepared to pay for it, research has suggested.
Less than a third of people said they would be prepared to pay an upfront fee to receive help with their finances, according to accountants KPMG.
People can currently pay for financial advice in two ways: through an upfront fee or through commission paid on any products they buy.
But under the Financial Services Authority's Retail Distribution Review (RDR), which comes into force at the end of 2012, all advisers will have to be paid through a fee and consumers will no longer be able to pay through commission.
The research not only found that the majority of people were not prepared to pay for advice, but even among those who were, more than half said they would only pay up to £50 for an hour's guidance.
Only 1% of those questioned said they would be prepared to pay more than £200 an hour.
But in reality, the typical fees charged by independent financial advisers range from £75 to £250 an hour, suggesting many people will be priced out of the market.
People were even less likely to be prepared to pay for an annual in-depth financial review, with just 22% saying they would pay for this, around two-thirds of whom said they would not pay more than £250.
