International development secretary Hilary Benn

An international conference is considering how to deliver the estimated £21.3 billion needed to rebuild Iraq.

Ministers, finance chiefs and aid experts are attending the conference in Madrid, Spain, which has been organised by America, the European Union, the United Nations, Japan, the United Arab Emirates and the International Monetary Fund.

Ahead of the meeting, Tony Blair urged other countries to "give generously".

"Whatever people think, the fact of the matter is Iraq will be able to get back on its feet for the first time in decades," he said.

"We have made a generous pledge ourselves and I hope other countries follow it up."

He also used his monthly press conference to issue a wider appeal to the Middle East.

"I hope that people throughout the Arab world, whatever they thought about the conflict, it is in everyone's interest to help the people of Iraq," Blair said.

"Neither America nor Britain wants to stay in Iraq a moment longer than is necessary to help the people of Iraq. We want to see a state that is stable and prosperous."

International development secretary Hilary Benn represents the UK during the two day event in Madrid and the UN secretary general Kofi Annan is also attending.

The UN chief's attendance at the conference follows the unanimous adoption of a new security council resolution on Iraq.

A spokesman for Annan said the secretary general "felt it was important to show his support for the international efforts aimed at restoring peace and stability to a sovereign, democratic and independent Iraq".

The UN and the World Bank have published a joint Iraq Needs Assessment Report ahead of the conference which estimates that the country will need some £21.3 billion ($36 billion) for reconstruction up to 2007, with £5.3 billion of this in 2004.

But while delegates from 78 countries are expected to attend the event, the eventual amount of money likely to be pledged for rebuilding the country is expected to fall short of these totals.

The Bush administration has set out plans for a $20.3 billion Iraq reconstruction package, though half of this has been converted by the Senate from grants to loans.

And another large aid package has come from Japan, which is to provide $1.5 billion in grants next year. The Tokyo government could also announce it will provide additional loans during the conference.

The World Bank will also offer support amounting to $3-5 billion over a five-year period.

The British government has already said it will provide aid of £554 million over the next three years, while further cash will come from the European Union.

Speaking ahead of the conference, Liberal Democrat international development spokesman Tom Brake said the US should give the international community a larger say in the political transition and economic reconstruction of Iraq.

"Aid from donor countries should not be tied to commercial contracts, but instead be targeted at top priorities such as health and critical infrastructure," he said.

"Donors will need reassuring that contracts are not going to be carved up amongst a small number of US firms close to the US administration."