Montreal — Rich countries attending the climate change conference in Montreal agreed this week to find new ways of funding protection of the world's rainforests.

This is considered a major breakthrough for developing countries such as Brazil and poor states such as Papua New Guinea, which have long sought financial compensation in return for halting logging and agricultural activities destroying tropical forests.

Cutting and burning millions of hectares of tropical forests is a leading cause of greenhouse gas emissions. Preserving them would lock up massive volumes of carbon. Environmentalists also blame deforestation for major declines in biodiversity.

A study released last month found selective logging was destroying the Amazon rainforest twice as fast as conventional analysis of deforestation data suggests.

Rapidly growing agricultural industries in countries such as Brazil is another major cause of deforestation.

Environmentalists say roads built for commercial farmers compounds the problem by encouraging subsistence farmers to venture deeper into the Amazon.

Ten countries, including Brazil, have been lobbying industrialised nations, which have 20% of the world's population but use 80% of the world's resources, to share the financial burden in lost earnings.

"This agreement will lead to a shared responsibility for tropical forests and opens a key dialogue on future climate change negotiations," said John Niles of the Climate, Community and Biodiversity Alliance.

The draft agreement, supported by the US, European Union and Japan, paves the way for a substantial increase of funding for slowing tropical deforestation.

It calls for countries to propose new financing solutions by the end of March next year. Thereafter a United Nations technical team will lead talks on further agreements.

It is likely the agreement will circumvent the Kyoto protocol to allow the US, which is not a signatory, to take part.