The world's poorest countries have received a double boost with President Bush unveiling a $5bn aid package and the European Union promising a massive increase in assistance.

In Washington, after a private meeting with Bono, President Bush signalled a shift in Washington's stance on aid after years of cuts, by promising $5bn in extra help for countries that respect human rights and reform their economies.

Speaking with Bono at his side, President Bush said: "To make progress, we must encourage nations and leaders to walk the hard road of political, legal and economic reform so all their people can benefit."

Meanwhile in Barcelona, Europe's finance ministers clinched a deal that will see EU aid spending rise by $5bn a year by 2006. The EU and US have come under pressure from aid campaigners to reverse a decade of declining spending on international aid ahead of next week's UN summit on global poverty, in Monterrey Mexico.

Britain's international development secretary, Clare Short welcomed the pledges but campaigners warned that even with the extra spending, aid budgets were still too low to meet internationally agreed targets for reducing global poverty by 2015.

"This is an important first step, and a serious and impressive new level of commitment," said Bono. "But this plan will be historic only if new money puts more kids in school and gives more children access to basic healthcare in Africa. This must happen urgently, because this is a crisis."

Oxfam has estimated that aid budgets will need to be trebled to $150bn a year if the world is to meet the millennium development targets. "[The EU/US pledges are] a lot of money but it's not enough. In fact, it's one tenth of what's needed for rich countries to keep their promise to poor countries," said Justin Forsyth, Oxfam's policy director.

Bono met with President Bush in the Oval Office to discuss AIDS and Bush's new initiative on U.S. assistance and, after accompanying Bush to his speech, then had another session with White House officials.

His campaign to highlight the AIDS crisis in Africa has seen him shuttling across the Atlantic almost weekly in recent months, including several meetings with senior US politicians and campaign groups this week. Yesterday he joked, "I am a pest, I am a stone in the shoe of a lot of people living here in this town, a squeaky wheel" . "It is much easier and hipper for me to be on the barricades with a handkerchief over my nose -- it looks better on the resume of a rock 'n' roll star," he said. "But I can do better by just getting into the White House and talking to a man who I believe listens, wants to listen, on these subjects."

Bush saluted Bono in the speech for his willingness "to lead, to achieve what his heart tells him, and that is nobody -- nobody -- should be living in poverty and hopelessness in the world."

Bono called the global AIDS epidemic "the defining crisis of our age," and said Bush branded it "genocide." He said he interpreted Bush's word to mean that "through our inaction, we are complicit."

According to the Associated Press reporter, Bono never removed his trademark wraparound shades during his day with the president. "I thought the president looked at them quite jealously," he joked. He wasn't about to lend them to Bush. "The last time I did that was with the Pope, and he took them away with him," he said.