French Economy Minister Christine Lagarde, who chaired the talks, said the accord marked the "first step" towards correcting these problems, thereby putting the global economy on track to more balanced growth and prosperity.

Lagarde told a press conference there had been a lengthy debate about the indicators, after reports that China, sensitive over its currency policy and trade balance, had held out to the last moment against a number of measures.

"It was not simple," Lagarde said at the end of the two-day meeting, the first under France's presidency of the Group of 20 developed and developing nations.

A series of indicators were under consideration to measure imbalances within and between countries, and which will form the basis for economic policy recommendations for nations to avoid a repeat of the problems at the heart of the 2008 financial crisis.

Agreement was easily reached on the internal indicators of the public deficit and debt, plus the levels of private savings and debt.

The dispute centred on the external indicators and a number of compromises were evident.

The final communique said the trade balance and investment flows would be monitored "taking due consideration of exchange rate, fiscal, monetary and other policies."

That suggests that exchange rates will be considered only in the wider policy context, something which Beijing has always insisted should be the case in response to Western criticism.

There was no direct mention of foreign exchange reserves as sought by Western countries and Lagarde confirmed it had been dropped.

China holds the largest amount at more than $2.5 trillion -- one of the major global imbalances that has to be resolved, according to the United States and Western powers.

They charge that China keeps its currency weak to boost Chinese exports. China denies any such manipulation, blaming the imbalance on structural problems in its trade partners' economies.

Asked about the Chinese position, Lagarde said that "there were talks, negotiations all night ... we found an accord that I think is balanced," adding that there could be no winners or losers if progress was to be made.

China last year resisted a US proposal to stabilise current account balances by setting a four-percent cap on countries' deficits and surpluses.

US Treasury Secretary Timothy Geithner did not mention China's exchange rate policy on Saturday and said "the question of reserves is not really critical at this stage."

He said the deal on the indicators "captures the essential elements in a way that is still acceptable" and includes the "critical elements of a credible framework."

Britain's finance minister George Osborne said the agreement, which saw China back off from its initial objections, showed Beijing "is playing its rightful role on the world stage."

Now they have agreed on the indicators, the G20 nations have to agree on sustainable levels, which they hope to accomplish by April, although it was stressed they would not be targets but rather "indicative guidelines".

Failure to agree on the indicators could have hobbled G20 efforts to remedy the huge trade and currency imbalances at the root of the 2008 global crisis and which many believe continue to threaten disaster.

The G20, whose members account for 85 percent of total world output, became the top global forum in the wake of the 2008 crisis. Avoiding a repeat is its top priority through the early diagnosis of economic imbalances and better coordination to eliminate them.

France wanted an agreement as soon as possible so that in the second half of this year the International Monetary Fund could make economic policy recommendations to nations.

In welcoming remarks on Friday, French President Nicolas Sarkozy had warned the ministers that failure to put aside national interests and reach a deal would kill off the G20.

"The temptation to give priority to national interests is great. But let me tell you clearly -- that would be the death of the G20," said Sarkozy.

-- Dow Jones Newswires contributed to this report --

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