Britain is throwing its weight behind European efforts to force oil and mining companies to publish details of every penny they pay to governments in poor countries where they operate.

George Osborne told his fellow G20 finance ministers in Paris on Saturday that the coalition was keen to support an effort by the French president, Nicolas Sarkozy, to throw open the operations of the extractive industries in the developing world to public scrutiny.

“As we enter a new decade when the resources of Africa are going to be heavily developed, I strongly believe it’s in everyone’s interests that mining companies and others operate to the highest standards,” said Osborne. “That’s the way to ensure some of the world’s poorest benefit from the wealth that lies in the ground beneath them.”

When multinational resources firms move into African states they often bring the promise of economic development, but campaigners say the result is all too often a bonanza for a tiny elite, while most of the population sees few benefits. In oil-rich Equatorial Guinea, for example, GDP per head is $30,000, equivalent to that of Italy or Spain, but most of the population still live on less than $1 a day. Exports of
oil, gas and minerals from Africa were worth $393bn in 2008, while the continent received $44bn in international aid, and natural resources accounted for almost a quarter of Africa’s growth between 2000 and 2008.

The long-running Publish What You Pay campaign, supported by a coalition of civil society groups worldwide, argues that if the scale of the payouts to host-country governments were revealed, voters would hold their leaders to account.

Jane Allen, UK co-ordinator for the campaign, said: “Too often the potential for growth and development in countries rich in natural resources is squandered as vast sums of money are misused by governments and individuals.

“By committing to legally binding measures that will make these payments open to scrutiny, the UK and Europe can play a critical role in reversing this ‘resource curse’ by fighting corruption and poverty.”

Gordon Brown promoted a voluntary approach, known as the Extractive Industries Transparency Initiative, launched in 2002; but US politicians have now legislated to force American firms to be more transparent.
Sarkozy wants Europe to follow suit.

The business secretary, Vince Cable, will lead the government’s push to secure a European agreement on the issue. A business department source said that legitimate firms had nothing to fear. “For businesses, it’s something that they should support as well, in terms of creating a level playing-field,” she said. A Treasury spokesman said: “George and Vince are working together on this.”

The One campaign’s Bob Geldof recently met Osborne to urge the government to support a new law. Sarkozy has asked the European Commission to report by September on the best way to legislate at European level, and British backing will be critical, because many of the firms that would be affected, including the mining giant Anglo-American and Tullow Oil, are listed in London.

Cable is keen to mend the government’s reputation for ethics after its controversial decision to delay implementation of the anti-bribery bill, passed with cross-party agreement before the election, which would make UK companies liable for corrupt actions by their staff anywhere in the world.

Sarkozy has put the future of Africa at the heart of his aims for France’s chairmanship of the G20 this year. He announced on Friday that he has appointed Bill Gates to carry out a study of alternative ways of
raising cash for development, including a so-called Robin Hood tax on financial trading. At the G20 meeting, finance ministers also discussed the health of the global economy, and agreed the warning signs they will use to determine whether so-called “global imbalances”, such as trade deficits, have reached a point that risks triggering a world financial crisis.