Mobiles giant in Live8 row

MOBILE phones giant O2 is set to rake in £7m from the text message lottery for Live8 tickets. The company has refused to waive its administration cost of 10p per message for the lottery, which opens at 8am on Monday.

The news emerged as Gordon Brown today threw his weight behind the Live8 campaign by promising to write off its £500,000 VAT bill.

Organisers are expecting up to 70m text messages to be sent as people clamour for tickets to the Hyde Park concert which will feature Coldplay, Sir Elton John, Madonna and Sir Paul McCartney.

Politicians today described O2's decision as 'disgraceful' and urged the company to follow the Chancellor's example. Phil Willis MP, the head of the all-party mobile communications group, called for the company to give all the money to Live8.

'It seems wherever there is a buck to be made there is always a mobile company willing to do it. They are trying to cream off an exorbitant fee for what is a very simple service. There is no reason they could not simply donate their systems free,' he said.

Users will be charged £1.50 to send a text message to enter the lottery. However, today it emerged that a second confirmation message will also be sent to everyone who enters.

An O2 spokesman said: 'We are charging 10p per entry to cover our administration costs, and we have no plans to waive that fee. This is a huge operation and we will still be making a loss.' He added that the firm expected the cost of running the lottery to exceed the 10p per message it was charging customers.

Lindsay Boswell, chief executive of the Institute of Fundraising, said: 'O2 have actually lowered the rate of the text message, but I think given the massive number of texts being sent, obviously economies of scale come into play. If you do the sums, it does seems they could make a big profit. It's reasonable that they cover their costs and make a modest profit, but nothing more than that.'

O2 refused to bow to the pressure today. But MPs said the Chancellor's move made its refusal even more embarrassing. Mr Brown announced he would write off the tax bill for the Hyde Park concert on 2 July.

'We are going to waive the bill for the cost of the concert and waive the bill for the cleaning up. That is in lieu of any payment of VAT. That is a way of helping this event - probably worth about £500,000,' he said.

The Chancellor today outlined his agenda for Gleneagles, where he hopes to persuade the leading industrialised nations to back his ambitious plans for a 'new deal' for Africa. Describing the programme as a 'modern Marshall Plan' for the developing world, he set out proposals to grant 100% debt relief to the poorest nations.

Mr Brown's four-point plan would also see the financing of a mass immunisation and vaccination programme designed to save 5m lives by 2015, a doubling of international aid to £27.5bn and improved trade deals with developing nations.

The Marshall Plan, named after the US Secretary of State George C. Marshall, was designed to deliver aid to rebuild a shattered Europe after the Second World War.