The US has put pressure on European nations to scale back their spending cuts amid fears they may harm growth, but Osborne said the meeting in Aylesbury, northwest of London, revealed much common ground.

“This meeting confirmed there are more areas of agreement between us on fiscal policy than is commonly assumed” the Chancellor of the Exchequer told a press conference afterwards.

He said the G7 had “discussed the importance of having in place credible, country-specific, medium-term fiscal consolidation plans for ensuring sustainable public finances and sustainable growth”.

“Overall, our discussions over the past two days have reaffirmed that there are still many challenges to securing sustainable global recovery, and we can't take it for granted,” he said.

“But we are committed as the advanced economies in playing our part in nurturing that recovery and ensuring a lasting recovery so that we have prosperity in all our countries.”

The talks, also attended by top representatives from the European Union and International Monetary Fund, built on last month's wider Group of 20 meeting while looking ahead to next month's G8 summit in Northern Ireland.

On Friday, US Treasury Secretary Jacob Lew said the world's biggest economy feels “strongly there needs to be the right balance between austerity and growth”, amid accusations that Germany has forced heavily indebted Euro zone colleagues such as Spain and Italy down a path of deep spending cuts.

The G7 also used its latest gathering to firm up its commitment to combating tax evasion, which is illegal, and tax avoidance, which occurs when individuals and companies take advantage of legal loopholes.

“Today, we all agree on the importance of collective action to tackle tax avoidance and evasion,” said Osborne. Britain has made the issue a priority of its presidencies of the G7 and G8, and Osborne said: “It is vital that both developed and developing countries collect the tax that is due to them.”

MercoPress