Rockets rain down on towns that residents can neither defend nor leave, as Bashar al-Assad's forces besiege Free Syria Army

In the heartland of the uprising against Bashar al-Assad a grinding war of attrition has now become an unforgiving battle to the death.

The Free Syria Army has held this territory of orchards and farmland since September, during which time loyalist forces have never been closer, nor seemed more menacing. As rockets regularly thundered on Thursday into towns that residents could neither defend nor leave, the three months of freedom they had savoured now seemed illusory.

There is little left in the town in which the Guardian was based on Thursday, or in the equally deprived and forsaken villages that dot the hinterland near Homs. Electricity here was switched off two months ago, the phone lines were downed last week. And on Wednesday, contact by road was cut with Homs, Syria's besieged third city, whose fate is seen as a dire warning of what lies ahead for the rest of the area.

Homs was on Thursday a very difficult place from which to flee. Only three seriously wounded residents are known to have made it out of the devastated opposition held sectors of the city into the relative safety of nearby Lebanon. Two of the wounded are unlikely to survive.

The rest face a desperate plight, barricaded in concrete homes that are crumbling in the face of the relentless onslaught now spreading to nearby farmland and villages. Some residents of this town say a small number of families from the heaviest hit areas of Homs, Baba Amr and al-Khalidiyeh, have managed to hole up in other areas of the city. However they can no longer speak to those left behind, who they now fear face a gruesome fate.

"We'll be next," said a doctor at a makeshift medical centre in the heart of this town. The doctors and nurses on duty here had fled the state hospital, one kilometre away, and set up a triage centre and a surgical ward in a derelict house. All day they were tending to dead and seriously wounded men, many of them members of the badly outgunned rebel army.

The patterned plastic sheets the medics had placed on the floor were slick with blood and iodine as more and more war wounded were brought in by their colleagues.

One hulking man in military fatigue pants was carried in on a stretcher with a gaping wound in his navel. "He's a first lieutentant," said one of the clinic's nurses, Abdul Karem, who like everyone else in this overwrought hub, doubles as a revolutionary. The seriously wounded officer was taken to the improvised operating room, as nurses outside prepped themselves for surgery by washing their hands with kerosene and water.

Among those tending to him was an old French surgeon, a veteran of conflict zones dating back to the Vietnam war, who arrived in Syria on Thursday with a suitcase of medical supplies and a readiness to stay as long as he's needed.

The carnage of the rest of the day suggests he may be here awhile. Minutes after the lieutenant's treatment began, a truck screamed to a stop outside and Free Syria Army soldiers bellowed for a stretcher. The triage centre rapidly emptied, as the medics inside grabbed their flip flops ? one also reached for his Kalashnikov ? and hurried into the courtyard outside. They stopped next to the truck and looked inside and visibly stopped in their tracks. "Finished," one man said. "Take him to the graveyard." The dead man was a major, the leader of the Free Syria Army in this town, and one of many wounded by an attack on an outpost not far from here.

As night fell, the numbers of dead and wounded appeared to increase. Every massive boom in the near distance seemed to herald the arrival of more patients.

"There coming from the hospital that we ran away from," said one medic, Dr Qassem. "It's only a kilometre away."

Regime snipers were also wreaking havoc from a nearby intersection on the road to Homs. Opposition forces, meanwhile for the most part watched from hideouts in apricot and peach orchards and farm-houses dotted along muddy brown laneways.

More wounded were brought in, a rebel shot in the hand, another two with bullets in their back. The television showing footage of the carnage in Homs had by now been switched off as the triage room swarmed with walking wounded, frantic medics and others taking refuge from the shelling.

The first lieutenant inside was fading fast. As other surgeons piled the patient's intestines onto his stomach, Dr Qassem, who was holding a lamp over the operation said: "They are coming for us now. It is going to be very bad."

And then he added an optimistic note to a day that had so far offered nothing but misery. "The vote at the UN could be good for us in the future," he said. "All our students and doctors study in Russia and the standards are not good. "All our factories have Chinese equipment and it's the same thing. If we win, things will change, God willing."

He switched back to the dying patient as attention switched to the newest casualty, a man shot in the wrist, his blood streaming over shoes piled at the room entrance.

"There have been more than 100 people killed today," said one young university medical student as he held an x-ray machine over a patient lying prostrate on the floor. "We all have family in Homs and we are very worried about the situation there. It is much worse than here.

"Every day it has been getting worse here and there. No one is coming for us and we accept our fate."

Early in the day, a re-supply ? of sorts ? did arrive for the rebels; three sacks of rockets and rusting mortar tubes. They too were brought into the medical clinic and stored out of sight. It was hardly an arsenal to embolden a clearly struggling rebel army, but it was a sign that some weapons are finding their way across the porous Turkish and Lebanese borders.

"These are old," said one young fighter. "But they will do. We are grateful for everything that we get."

Creditors demand to see action on new pledges as sovereign debt default looms in weeks if rescue package is withheld

Greece's hopes of promptly securing a ?130bn lifeline were set back early this morning after the finance ministers of the eurozone responded with scepticism to Athens's declaration that it is committed to slashing public spending to the bone under orders from the rest of Europe.

With the clock ticking on a possible sovereign debt default by Athens within weeks, eurozone finance ministers postponed a decision on Greece's rescue until next week, piling the pressure on the Papademos government.

Following weeks of brinkmanship that have poisoned relations between the bankrupt country and its eurozone creditors, the ministers and senior officials from the eurogroup, the European central bank, the European commission, and the International Monetary Fund voiced exasperation with Greek delaying tactics.

The meeting in Brussels declined to activate the bailout to prevent an outright Greek insolvency by the end of March when the country has to redeem more than ?14bn in debt.

The Greek finance minister, Evangelos Venizelos, left the Brussels meeting reportedly stating that his country now needed to decide whether or not to remain in the single currency.

Despite announcements earlier that the coalition government in Athens had yielded to savage new terms from the eurozone to qualify for the bailout, the eurozone finance ministers were unimpressed. The emphasis was on first getting Greece to deliver its side of the bargain.

"On the condition that the Greek parliament takes decisions on the prior actions over the coming days, then next week we can finalise decision on the overall package," said Olli Rehn, the European commissioner for monetary affairs.

"It's up to the Greek government by concrete actions through legislation and other actions to convince its European partners that the second [bailout] programme can be made to work."

Luxembourg's prime minister, Jean-Claude Juncker, the president of the eurogroup, said that the ministers would reconvene next week to review Athens's conduct and possibly sign off on the new rescue plan.

The Greek government still had to close a ?325m funding gap before it would qualify for a new bailout.

"Not everything that we need is on the table," said Juncker.

Earlier Venizelos had demanded a conclusion to the bailout saga, but ran into stiff reservations from the key creditor country, Germany. "We finally have a staff level agreement for a new, strong and credible programme," said Venizelos. "We also have a deal with the private creditors on the basic parameters. We now need the political endorsement of the Eurogroup for the final step."

Amid a mounting sense of despair over Greece, any deal that might be struck may already prove inadequate to its purpose.

With unemployment soaring in Greece, revenue sources drying up, recession deepening, and social unrest increasing, there is pessimism and resentment on both sides, a sense that the austerity cannot work, and that a default is more of a question of when, not if.

"Just because Greek leaders have agreed on targets does not mean that they will or indeed can be delivered," said Sony Kapoor of Re-Define, an economics thinktank in Brussels. "We have just reached a temporary truce. The war will continue to be fought for some time to come."

The ?130bn, even if agreed, is unlikely to be enough to achieve the goal of returning Greek debt to sustainable levels, given the country's deteriorating fiscal position.

Mario Draghi, the ECB's chief, and Christine Lagarde, the head of the IMF, attended the Brussels meeting of eurozone finance ministers. European commission sources said a signed memorandum committing the Greek government to a further ?3.3bn in savings ? which still has to go through parliament in Athens this weekend ? had to be delivered within five days to meet the tight deadlines for avoiding a Greek default. If a deal is struck on the new bailout, the IMF will need to rule that the arrangement will eventually render Greek debt levels sustainable.

Plans being laid for call at Liberal Democrat spring conference for bill to be scrapped

The government's beleaguered health bill has run into fresh trouble after it emerged that plans are being laid for a call for it to be scrapped at the Liberal Democrat spring conference.

It is also expected that the influential Conservative Home website, seen as the voice of the party grassroots, will publish an editorial on Friday calling for the bill to be dropped altogether. It is understood that Conservative Home has been urged to make the call by three cabinet members who believe David Cameron is not listening on the issue. One source said: "We have almost been instructed to write this." It is extraordinary that cabinet members feel so frustrated at the political deadlock that they have resorted to urging Conservative Home to raise the flag of rebellion.

It has been widely canvassed within the government that non-contentious parts of the bill covering public health, social care and GP commissioning could be retained, while controversial parts dealing with an extension of the private sector could be abandoned altogether, something that would be a humiliation for the health secretary, Andrew Lansley.

Stephen Dorrell, Conservative chairman of the health select committee, has been one of many Tory MPs pointing out that many of the changes could have been implemented without the need for legislation or such controversy.

The shadow health secretary, Andy Burnham, has offered to strike a deal to bring in wider GP commissioning. Labour tabled a vote on Thursday to force the government to publish a report assessing the threats posed by proposed changes to NHS finances and patient care.

Senior Lib Dems have acknowledged that they are in a terrible place over the bill, but in discussions at the beginning of the week with Cameron, Nick Clegg agreed to let the bill continue in the Lords.

There is frustration in Downing Street that the support of health professionals has been lost after they were laboriously courted and consulted during the pause last year, agreed after the Lib Dems' spring conference voted to oppose large tracts of the bill. The current move is being organised by the same group of party activists.

The Lib Dem leadership managed to keep a second health rebellion off the agenda of the autumn conference, but will face intense grassroots pressure if it tries to prevent debate again.

An emergency motion can be kept off the floor of the conference if it is not deemed an emergency by the federal conference committee, or it is not selected for debate in a ballot of delegates.

It is being argued by diehards in the cabinet that the struggle to get the legislation on the statute book will last only a few more months and after that it will be shown that the warnings of the protesters were ridiculously overblown. Cameron is trying to resell the package as a way of reducing bureaucracy in the NHS.

In an effort to keep up the pressure, the shadow cabinet agreed to hold an opposition day debate later this month on making the risk assessment public, in what Burnham said would be a defining moment in the campaign to get the bill axed.

Critics believe the risk register, which Lansley has repeatedly refused to publish, contains damning warnings about rising costs and confusion. Concern has been heightened after it emerged on Wednesday that a risk assessment by the London NHS warned some organisations could fail financially and care, including maternity and children's services and public health, could suffer. Such is the anger about the register that nine Liberal Democrats are already among 50 MPs who have signed an early day motion also calling for it to be published ? and Labour believes more Lib Dems will support its move.

To put further pressure on the coalition, Burnham will urge Labour MPs to visit hospitals and surgeries during next week's half-term break, so they can recount their stories from the NHS front-line in the debate on 22 February. "The defining question in this debate now is, by pressing on and not listening, to what extent are they putting patient safety and quality of services at risk, and that's why the risk register becomes absolutely central to this," said Burnham.

Labour's move follows another torrid week for the government over the bill, with former supporters of the plans coming out against the current version ? which has had more than 1,000 amendments ? and the coalition's first defeat on the bill in the House of Lords on Wednesday.

Reflecting growing frustration inside the government at Lansley's handling of the bill, a Downing Street insider was quoted earlier this week saying the health secretary should be "taken out and shot". In response, the prime minister's spokesman said the Tory minister had David Cameron's "full support".

Lansley will face fresh embarrassment on Friday when a report by the right-of-centre thinktank Reform says the government's entire reform of public services is being undermined by the Department of Health's management of NHS changes.

The Scorecard report on 10 government departments with responsibility for different areas of public sector reform also singles out the prime minister for criticism for personally intervening with detailed promises on issues such as waiting times and nurses visiting patients' beds every hour. The criticisms by Reform will be particularly damaging because they accuse the health bill of causing exactly the opposite of what it is intended to achieve ? holding back reform of the NHS and damaging services for patients.

Burnham has offered the government a compromise, that in return for dropping the bill Labour would enter talks about how to introduce GP-led commissioning of healthcare, without the wider reform of the NHS structure proposed by the bill.

Ministry's 'culture of over optimism' to blame for underestimating cost of 15 projects as well as delays, says committee of MPs

Britain's 15 biggest defence projects are expected to cost £6bn more than first estimated and will be delayed by a combined total of 26 years, a parliamentary watchdog reports today.

Too often the taxpayer has had to pick up the bill for the Ministry of Defence underestimating the risks involved in procuring complex weapons systems, the Commons public accounts committee (PAC) says.

The committee identifies three large projects bedevilled by long delays and huge overspend. These include the repeatedly delayed Nimrod maritime patrol aircraft, upon which £3.4bn was spent before it was scrapped, to save an estimated £1.9bn in running costs over the next 10 years.

The MoD will incur further costs from cancelling contracts and substituting alternative capabilities. The committee has asked the National Audit Office to investigate the decision to scrap Nimrod aircraft as well as all of Britain's Harrier jump-jets.

It also wants investigation of the delays surrounding the nuclear-powered Astute submarine fleet, which led to an extra £1.9bn in costs, and of the expenditure on two large aircraft carriers, the cost of which has so far risen by £2.8bn over the £3.5bn estimated when first approved in 2008. The PAC believes the carriers could end up costing as much as £12bn.

The report says that hurried attempts to save money have created problems for the future. "Decisions to save cash in the short term ? deferring spending and reducing equipment numbers ? have added significant long-term costs to the defence programme, and so represent poor value for money," it says.

It adds that last year's strategic defence and security review had to address the £42bn gap between the defence budget and forecast expenditure, including spending on the equipment programme. Since then there have been two more reviews, which have made further cuts in that programme in attempt to save further money.

Despite three reviews, Friday's report says, the MoD can say only that the defence budget is "broadly in balance".

The MPs comment: "It is unacceptable that the department still cannot identify the extent of the current gap between resources and expenditure."

They add that a culture of over-optimism continues at the ministry when it comes to costing projects. They point out that the financial burden incurred by underestimating project costs has fallen mainly on taxpayers, who have had to underwrite them.

The forecast for completion of the 15 largest defence projects increased by £466m last year alone.

Since the projects were first approved their estimated costs have risen by £6.1bn, bringing the combined total to about £60bn. Together, the projects are expected to be completed 322 months later than planned.

The PAC says the MoD's performance has improved, and that recent projects have had lower cost increases and fewer technical problems than earlier ones.

Today's report also points out that cutting equipment numbers after contracts have been signed usually represents poor value for money, as it invariably increases unit costs.

The MoD has recently decided to reduce the number of Puma and Chinook helicopters by four and 10 respectively, and it is buying three fewer European A400M transport aircraft. This reportedly has contributed to a 46% increase in the cost of each A400M plane.

Margaret Hodge MP, the Labour chair of the PAC, said: "Decisions to delay or cut programmes to save money in the short term continue to lead to increased costs in the longer term and do not represent good value for money."

She added: "We welcome the fact that there are signs of improvement. Projects approved since 2002 have shown significantly lower cost increases."

However, she said, the committee was concerned that the MoD was still unable to set out openly the extent of the gap between its income and expenditure, and how and by when it would balance this year's budget. "The department must publish that information urgently."

The MPs say that in light of current economic conditions it would be unrealistic for the MoD to plan spending on the assumption it will get a 1% increase in its equipment budget after 2015? a factor defence chiefs had been demanding.

Leveson inquiry sees editor reject call to withdraw claim actor lied as Max Clifford says phone hacking a 'cancer' by a minority

The editor of the Daily Mail, Paul Dacre, refused to retract his accusations that the actor Hugh Grant had lied, during sometimes angry exchanges at the Leveson inquiry on Thursday.

Asked to apologise and withdraw his claim that Grant had made a "mendacious smear" against the Mail group, he said he would only do so if Grant withdrew his own statements attacking his papers.

He claimed: "Hugh Grant was obsessed by trying to drag the Daily Mail into another newspaper's scandal."

The veteran editor, asked to answer allegations that an article about Grant's love life might have been obtained by phone hacking, made plain his resentment that he was being subjected to further cross-examination. He repeatedly interrupted David Sherborne, counsel for Grant and other hacking victims, and talked across him.

Dacre described questions as irrelevant and at one point said loudly: "I'm not going to answer any more questions on that particular point." He had not studied one witness statement immediately before testifying, he said, because he had been busy "trying to edit my paper".

Despite the jousting, the editor-in-chief of Associated Newspapers shed no more light on the question of how one of his papers, the Mail on Sunday, came to publish a an article in 2007 containing allegations of a non-existent affair involving telephone messages between Grant and a "plummy-voiced woman".

Dacre accused Grant of bad faith, asserting he had subsequently produced evidence "out of a hat" suggesting the story must have been based on a misunderstanding of "flirtatious" late-night phone messages left by a film industry contact. Dacre said: "Hey presto! He conveniently remembers it!"

Dacre said he had been assured the tabloid's story had been obtained by legitimate methods. The paper's editor had told him that a reporter had explained that the story had come from a freelance, Sharon Feinstein, who in turn claimed to have got it "from a source in the Grant camp".

Lord Justice Leveson, who said he was determined to allow Grant's counsel to have a fair chance to put points to Dacre, told the editor that he would not make a finding of fact about what actually happened over the "plummy-voiced woman". His only concern was that Dacre had called Grant's testimony on oath "a mendacious smear". "He's deliberately lying! That's what it means!"

Dacre claimed that the opening testimony in the Leveson inquiry had made it "an extraordinary day ? a unique occasion". Grant was the "poster boy for the Hacked Off campaign" who had deliberately brought out his allegations. "He knew the damage it would cause."

Dacre had heard of Grant's testimony on the 4pm radio news while he was in a car and became angry because Grant had been previously put on notice by the Mail group's legal department that his repeated allegations of their involvement in phone hacking were not true.

"We felt we had to respond even more robustly," he said. "We needed to fight fire with fire." He told Leveson: "I don't think you understand the speed of 24-hour instant news."