Paul Hannon and Stephen Fidler

POLICY makers from the world’s largest economies welcomed signs that the recession is nearing an end, but said it is much too early to start withdrawing measures designed to support growth.

As finance ministers and central bank heads from the Group of 20 gathered in London, the International Monetary Fund said the global economy appears to be emerging from its sharp downturn.

But the finance officials, who are preparing for a meeting of G20 leaders in Pittsburgh later this month, sounded notes of caution, some suggesting the possibility of a “double dip,” or a return to recession after a brief period of growth.

Brazilian Finance Minister Guido Mantega warned that the withdrawal of stimulus measures now could push the global economy back into recession. And that view appears to be shared by other large developing economies.

The German government has pushed hardest for the development of exit strategies, arguing that investors in government bonds need to be reassured that governments will cut their borrowing after the hoped-for recovery takes hold.

Without that reassurance, the German government fears investors could charge more to lend to governments, pushing up long-term interest rates and hindering the recovery. But German Finance Minister Peer Steinbrueck said it is too early to set a fixed time for when countries should start to withdraw their stimulus measures.

As the ministers gear up for Pittsburgh, however, differences have emerged on key issues, such as how or whether to curtail bank bonuses. Efforts led by the French to introduce absolute caps on pay or high taxes on bonuses were rejected by others.

The latest divisive issue emerged on bank capital.

In proposals made public late yesterday, US Treasury Secretary Timothy Geithner called for international banks to be subject to a leverage cap: a maximum ratio of capital to assets.

This is a traditional capital measure used by US banks, but not in Europe, where the focus has been on capital ratios against risk-weighted assets, which means different types of assets carry different capital requirements according to how risky regulators think they are.

However, Christine Lagarde, France’s finance minister, told reporters that recent proposals to improve bank capital rules agreed by international bank supervisors at Basel, Switzerland, should already have done the trick.

The US sees risk-weighted assets as a useful measure of bank’s capital adequacy — but it views the leverage ratio, not yet approved by the Basel supervisors, as a fallback that is harder for bankers to “game” than capital ratios based on risk-weighted assets.

At this weekend’s meetings, the officials are expected to agree to keep the foot on the accelerator for now and not reverse their expansionary fiscal, monetary and financial measures just yet.

They were also expected to discuss how to co-ordinate “exit strategies” from these policies. But some countries, notably Germany, are keener than others, such as the US and Britain, to make sure that the measures are unwound sooner rather than later.