Top economists and United Nations leaders are working on a "Green New Deal" to create millions of jobs, revive the world economy, slash poverty and avert environmental disaster, as the financial markets plunge into their deepest crisis since the Great Depression.

The ambitious plan – the start of which will be formally launched in London next week - will call on world leaders, including the new US President, to promote a massive redirection of investment away from the speculation that has caused the bursting “financial and housing bubbles” and into job-creating programmes to restore the natural systems that underpin the world economy.

It aims to convince them that, far from restricting growth, healing the global environment will be a desperately -needed driving force behind it.

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The Green Economy Initiative - which will be spearheaded by the United Nations Environment Programme (UNEP), headquartered here, and is already being backed by governments – draws its inspiration from Franklin Roosevelt's New Deal, which ended the 1930s depression and helped set up the world economy for the unprecedented growth of the second half of the 20th century.

It, too, envisages basing recovery on providing work for the poor, as well as reform of financial practices, after a crash brought on by unregulated excesses of the free market and the banking system.

The new multimillion dollar initiative – which is being already funded by the German and Norwegian Governments and the European Commission – arises out of a study commissioned by world leaders at the 2006 G8 summit into the economic value of ecosystems. It argues that the world is caught up in not one, but three interlinked crises, with the food and fuel crunches accompanying and intensifying the financial one.

Soaring prices of grain and oil, it stresses, have stemmed from outdated economic priorities that have concentrated on short term exploitation of the world's resources, without considering how they can be used to sustain prosperity in the long term. Over the last quarter of a century, says UNEP, world growth has doubled, but 60 per cent of the natural resources that provide food, water, energy and clean air have been seriously degraded.

Achim Steiner, UNEP's Executive Director, adds that new research shows that every year, for example the felling of forests deprives the world of over $2.5 trillion worth of such services in supplying water, generating rainfall, stopping soil erosion, cleaning the air and reducing global warming . By comparison, he points out, the global financial crisis is so far estimated to have cost the world the smaller one-off sum of $1.5 trillion.

“We are pushing, if not pushing past, the limits of what the planet can sustain,” he says. “If we go on as we are today’s crisis will seem mild indeed compared to the crises of tomorrow”.

Switching direction and concentrating on 'green growth', he says, will not only prevent such catastrophes, but rescue the world's finances. “The new, green economy would provide a new engine of growth, putting the world on the road to prosperity again. This is about growing the world economy in a more intelligent, sustainable way.

“The 20th century economy, now in such crisis, was driven by financial capital. The 21st century one is going to have to be based on developing the world's natural capital to provide the lasting jobs and wealth that are needed, particularly for the poorest people on the planet”

He says for example, that it makes more sense to invest in preserving forests, peatlands and soils, which naturally absorb carbon dioxide, than destroying them and then developing expensive technology to do the job.

He points out that the world market for environmental goods and service already stands at $1.3 trillion and is expected to double over the next 12 years even on present trends, and adds. “There is an enormous opportunity to ride on this increasing global demand for environmental improvement and turn it into the driver of economic growth, job creation and poverty reduction that is now so desperately needed. And in some places it is already beginning to happen.”

Mr Steiner will launch the initiative in London a week on Wednesday, October 22nd, with the announcement of three projects, concentrating on how investing in the world's natural systems, in renewable energy and in other green technologies would stimulate growth and provide jobs, and giving examples of where it is already taking place.

He will describe, for example, how Mexico is now employing 1.5 million people to plant and manage forests, how China has created the world's biggest solar energy industries from scratch in just a few years, and how Germany has leapt from being a laggard to a leader in renewable energy by giving people attractive incentives to install it in their home.

Pavan Sukhdev, the chair of Deutschbank's Global Market Centre, who is leading the initiative, says: “. Hundreds of millions of jobs can be created, there is no question that traditional industries like steel and cars cannot provide them. But this is a really huge business opportunity.”