British Prime Minister Tony Blair yesterday set a one-year deadline for reform of the world's financial system, calling for an overhaul of the Bretton Woods institutions, which established the World Bank and the International Monetary Fund in 1944. 'We need to commit ourselves today to build a new Bretton Woods for the next millennium,' Mr Blair said. In a speech to the New York Stock Exchange, released in London before he was due to speak, he listed five areas of reform demanding immediate attention. Mr Blair, chairman of the Group of Seven industrialised nations, said improvements needed to be made to accountability and transparency; financial supervision and regulation; response to short-term liquidity crises; handling of international capital flows; and greater openness and accountability within the IMF. Against the background of the Asian financial crisis, economic collapse in Russia and financial volatility in Latin America, Mr Blair said such reform was needed to prepare for the 21st century. 'We should not be afraid to think radically or fundamentally. We need to commit ourselves today to build a new Bretton Woods for the next millennium.' He said the G7 should act as the leading force behind such a reform drive, and that action needed to be taken quickly in order to prevent other crises. 'I believe we should set ourselves a deadline of one year in which this work should be done, so that we can have the reformed institutions in place before the millennium. Firm proposals should be put to the [G7] heads of government summit next year, and then to a wider forum next September,' he said, referring to the annual IMF and World Bank meeting in Washington. In Russia in particular, Mr Blair said there was a need for a 'clear deal' for more aid for the cash-strapped country, but he insisted it could only be available if greater efforts towards economic reform were being made. He conceded Russia would make 'the occasional wrong turning' but the G7 should put forward clear incentives to guide Russia on to a path of economic recovery. 'We must offer the Russian Government a clear deal. If the process of reform resumes, we must of course continue to provide financial and technical support, both bilaterally and through the IMF and the other international financial institutions. 'There will no doubt be the occasional wrong turning on the way. But the essential strategy and destination must be clear,' he said. 'So it is a two-way deal, for Russia and for any other countries requiring short-term help: support but only in exchange for reform.' In a separate meeting with Japan's Prime Minister Keizo Obuchi, he also urged Japan to take 'swift and strong' fiscal action to kick-start domestic demand-led growth. He welcomed the package of banking measures for reform of the banking industry hammered out last Friday, and said a fiscal boost and other domestic reforms would be the key to boosting investor confidence not only in Japan, but throughout Asia. 'Swift and strong fiscal action to boost domestic demand in Japan and further decisive measures to strengthen the financial system would provide the single biggest boost to investor confidence in Asia and beyond.'