PORT-OF-SPAIN (Trinidad and Tobago) - Commonwealth leaders meeting here have thrown their weight behind fast-start funding to assist vulnerable states tackle the adverse impacts of climate change.

They issued a declaration on climate change on Saturday incorporating Malaysia's suggestion that such financial assistance be disbursed in the form of grants rather than low-interest loans.

"Most of the countries involved may have a high debt level and limited ability to service their loans. That's why we made the suggestion," Najib Abdul Razak told Malaysian journalists at the end of Day Two of the three-day Commonwealth Heads of Government Meeting (CHOGM) 2009 in this Caribbean port city. It was opened by Queen Elizabeth II on Friday.

Malaysia had also proposed that conditions to avail the fund should be kept to a minimum.

In the declaration, the Commonwealth leaders welcomed the initiative to establish, as part of a comprehensive climate agreement, a Copenhagen Launch Fund starting next year and building to a level of resources of US$10bil (RM35bil) annually by 2012.

They said fast-start funding for adaptation should be focused on the most vulnerable countries.

"We welcome a proposal to provide immediate, fast disbursing assistance with a dedicated stream for small island states, and associated low-lying coastal states of at least 10 per cent of the fund," they said.

They also recognised the need for further, specified and comparable funding streams, to assist the poorest and most vulnerable countries to cope with, and adapt to the adverse impacts of climate change.

The United Nations climate change conference will take place in Copenhagen next month to reach accord on a successor to the Kyoto Protocol of 1997.

Commonwealth leaders gathered here believed that an internationally legally-binding agreement was essential, Najib said in a Bernama report.

He said: "CHOGM also felt that such an agreement should be reached no later than 2010."

In the declaration, the Commonwealth leaders said the agreement in Copenhagen must address the urgent needs of developing countries by providing financing, support for adaptation, technology transfer, capacity building, approaches and incentives for reducing emissions from deforestation and forest degradation, and for afforestation and sustainable management of forests.

They said developed countries should continue to lead on cutting their carbon emissions, and developing countries, in line with their national circumstances, should also take action to achieve a substantial deviation from business-as-usual emissions including with financial and technical support, and also supported by technology and capacity building.

To a question, Najib said he had yet to decide whether or not to attend the Copenhagen summit following a request from the organisers.

He said Malaysia would send Natural Resources and Environment Minister Douglas Uggah Embas to the climate talks.