BROWN TO WARN OF SKY-HIGH FIGHT BILL

GORDON Brown is to warn of the devastating cost of a war on Iraq at a special Cabinet meeting this month.

The Chancellor, said by friends to be deeply sceptical about military action to topple Saddam, will sound the alarm about the impact on the British and world economies.

It will be the first time for nearly two months that the Cabinet has sat down to debate Iraq.

Mr Brown is concerned Britain's contribution will dwarf the £2.5billion cost of the Gulf War and will drain the emergency Civil Contingency Fund.

In the 1991 Gulf War a huge chunk of the cost was repaid by Saudi Arabia and the grateful government of Kuwait after Saddam was kicked out of their country.

But Treasury analysts know there will be no pay- back this time and the £2.1billion contingency fund could be severely depleted.

Tony Blair is expected to call the Cabinet meeting before Labour's annual party conference later this month.

A new report due out today will predict £600,000million would be wiped off the world's wealth if Iraq is attacked and countries such as Saudi Arabia, which has the biggest oil reserves in the world, are destablised.

Respected London-based financial analysts Tenon said the price of oil could soar to as high as £40 a barrel, double its current level.

It would choke the recovery of the US economy after September 11 and trigger a domino effect around the globe. A Government source said: "It could be the most expensive war we've ever known."