UK 'still serious global player'
David Cameron has dismissed claims that Britain's role on the world stage is "shrinking" after US President Barack Obama raised concern that UK defence spending was set to fall below the Nato target.
The Prime Minister was tackled by Mr Obama over the prospect that Britain's military spending would drop below 2% of GDP during the G7 summit in Germany.
But speaking at the closing press conference, Mr Cameron insisted that the UK remained a "serious global player" as he highlighted the involvement of UK forces around the world.
Mr Cameron said: "When our flagship is saving lives in the Mediterranean, when we are training the Iraqi army, training Afghan officers, our jets are flying air patrolling missions over the Baltic, our submarines are silently patrolling the seas giving us a nuclear deterrent 365 days a year, we are ordering the largest aircraft carriers that the Royal Navy has every had, we have the A400Ms, we have the Joint Strike Fighters on their way...
"The idea that this £160 billion equipment budget that we have protected (from) inflation, that that represents strategic shrinkage, is nonsense. Britain is a serious global player in the world with the budget to back it up.
"We have to make our decisions about spending in a spending round. That is how things are done properly."
Mr Cameron welcomed a statement in the final summit communique calling for all sides in the Ukraine conflict to respect the ceasefire deals agreed in the Belarus capital, Minsk.
The communique expressed concern at the recent upsurge in fighting between government forces and pro-Russian separatist rebels and warned of further "restrictive measures" against Moscow "should its actions so require".
"The G7 is united on what needs to happen next to de-escalate the crisis in Ukraine," he said.
"Existing sanctions must remain is place until the Minsk agreements are fully implemented. This will require action from both Ukraine and Russia.
"That's why it's vital we ensure (Ukrainian) President Poroshenko's government has the support needed to deliver the necessary political and economic reforms. But we must not forget that the Ukrainians are the victims, not the aggressors."
The summit's host, German Chancellor Angela Merkel, made clear at the start of the two-day gathering that she wanted the G7 leaders - also including France's President Francois Hollande and prime ministers Matteo Renzi of Italy, Shinzo Abe of Japan and Stephen Harper of Canada - to make a strong statement on the continued need for sanctions against Russia, which was ejected from the group last year in response to its interference in Ukraine.
With EU financial and economic sanctions against Moscow up for renewal at the end of July, there are concerns that smaller countries like Greece might seek to block their extension because of the impact on their own economies.
A flare-up of violence in eastern Ukraine in recent days has led to questions in the West over whether Russian actions are undermining the ceasefire agreement reached in Minsk in February.
The communique released at the conclusion of the Schloss Elmau summit stated that any removal of sanctions should be "clearly linked to Russia's complete implementation of the Minsk agreements and respect for Ukraine's sovereignty" and cautioned that G7 states remain ready to take "further restrictive measures" if Russian support of separatist forces continues.
Mr Cameron said the world should remember that the Ukrainians are "the victims, not the aggressors", adding: "Existing sanctions must remain in place until the Minsk agreements are fully implemented."
The communique also calls on all sides in Libya to "put down their weapons and work together" to create a democratic state and offers "significant support" from G7 countries for an "inclusive and representative government" established in the north African state, which has become a hotbed of people-smugglers sending would-be migrants across the Mediterranean in ramshackle boats.
Campaigners on the environment and poverty welcomed the G7's declaration of support for "deep cuts" in greenhouse gas emissions and decarbonisation of the world economy by the end of the century. The communique voiced "strong determination" to secure agreement at a key climate change conference in Paris in November, with targets for greenhouse gas emission cuts by 2050 at the "upper end" of the 40-70% range recommended by the Intergovernmental Panel on Climate Change.
The executive director of Greenpeace UK, John Sauven, said: " G7 leaders have today signalled a fundamental transformation of the global energy economy by the middle of this century. The age of fossil fuels is coming to an end. David Cameron's task now, is to capture the full benefits of this revolution for Britain's economy; and to ensure that it contributes to alleviating poverty and delivering energy access in the developing world."
Oxfam G7 spokesman J orn Kalinski said the G7 countries had indicated that " fossil fuels are on their way out", but added that this was not reflected in their own national emission reduction pledges.
"G7 leaders are starting to talk the right language but they must now live up to their own rhetoric and kick their dirty coal habit," said Mr Kalinski. "They must also reassure developing countries that they will keep their promise to deliver 100 billion US dollars by 2020 for climate action in developing countries, and provide the additional predictable funding needed in the longer term."
The communique also expressed a determination to reach agreement in September on new United Nations development goals which would "complete the unfinished business of the Millennium Development Goals" by ending extreme poverty worldwide by 2030.
Adrian Lovett, Europe executive director of the One Campaign, said: "These G7 leaders have signed up to an historic ambition demanded by millions of citizens around the world - to be part of the generation that ends extreme poverty and hunger by 2030. But Elmau's legacy must be more than a castle in the air. We need these plans to be built on strong foundations - and first and foremost, that means funding."
He called on G7 leaders, including Mr Cameron, to come to a pledging conference in Ethiopian capital Addis Ababa next month and play their part in " ensuring the fight to meet the basic needs of people everywhere is fully and transparently financed".
Mr Cameron welcomed the G7 agreement to "immediately accelerate" work on the controversial EU-US Transatlantic Trade and Investment Partnership, with the goal of reaching an outline agreement "as soon as possible and preferably by the end of this year".
Protesters outside the summit venue in the Bavarian Alps warned that the deal would undermine safety and environmental standards and national health systems in Europe.
But the Prime Minister said: "It's over 700 days since we launched negotiations on the TTIP and every day we don't do a deal it is costing the global economy £630 million. So let's redouble our efforts and reach a political agreement on an ambitious deal within the next six months."
Mr Cameron said the summit had made progress on his twin priorities of "security and prosperity" and had given him a chance to deliver a message to the rest of the world that "Britain is back".
"Fresh from the election, I was able to show that Britain is back," he said.
"Our economy growing, our deficit halved, unemployment falling and - with our efforts working for trade deals, saving lives in the Mediterranean, fighting Isil in the skies over Iraq, fighting Ebola in west Africa, combating climate change and poverty - we are playing a leading role in delivering the security and prosperity that our people deserve."