Prime Minister Gordon Brown has reached a deal with Saudi Arabia which could see an increase in oil production by 500,000 barrels per day.

Mr Brown's agreement with Saudi Arabia comes at a time when British motorists are paying £1.20 for a litre of unleaded.

Leading oil exporters have acknowledged the need to boost supplies to curb soaring prices.

Oil prices have more than doubled in a year to almost $140 a barrel, triggering protests over record fuel costs that threaten the world's economy.

But while they agreed to increase the production of oil - they stopped short of specific commitments on extra output.

Brown also unveiled plans to work with Saudi Arabia on technology to capture carbon emissions from energy plants and with the United Arab Emirates on nuclear technology.

He told reporters that Britain and Qatar are looking at a new joint energy fund to invest in British energy industries, and that talks with the Abu Dhabi Investment Authority about investment opportunities in Britain were moving forward.

Mr Brown said at a summit with rich oil nations in Jeddah: "We want them to invest in alternative sources of energy in our economies, just as we want them to allow our efficient oil companies to have a role to play in the oil production of the oil producing countries."

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