Finance ministers from the world's richest nations warned on Saturday surging commodity prices threatened economic growth, but shrank from any talk of new controls on volatile oil and currency markets.

The ministers' also used stronger language to describe the risks to economic growth in their communique on Saturday than the threat of inflation, which has drawn unusually hawkish comments from the Federal Reserve and the European Central Bank.

'Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable and and may increase global inflationary pressure,' they said in a communique.

US Treasury Secretary Henry Paulson warned that high oil prices could prolong the US downturn and European Union Economic Commissioner Joaquin Almunia said the US was at risk of 1970s style stagflation.

The run-up to talks in the Japanese city of Osaka had been dominated by a link between a dollar slide and a doubling of oil prices in the past 12 months.

Japanese Finance Minister Fukushiro Nukaga said eight nations did not discuss currencies or intervening in foreign exchange markets in the meeting. US Treasury Secretary Henry Paulson refused to rule out intervention last week when he and other US officials expressed concern about the weak dollar.

G8 countries, mostly importers of crude, wield little influence over oil markets that are driven by demand from India and China and concerns about supplies. But they can try to arrest a slide in the US currency that has prompted investors to buy oil futures and other commodities to hedge dollar risks.

Italy floated a plan to make it more expensive to bet on oil prices in the futures markets, Italian Economy Minister Giulio
Tremonti told reporters before the meeting.

The communique made no specific reference to the plan. 'We ask relevant national authorities to examine the functioning of commodity markets and to take appropriate measures
as needed,' the ministers said.

They asked the International Monetary Fund and the International Energy Agency to work with national authorities to analyse real and financial factors behind commodity price rises.

Britain and the United States have in the past been reluctant to back intervention in oil futures markets. Canada's finance minister Jim Flaherty said markets should be allowed to work on oil prices. Canada is a net exporter of oil.

The ministers said the combination of rising prices and the risk to growth made 'policy choices more complicated'. Almunia said the most important challenge for policy makers was to avoid stagflation - a combination of stagnant economies and high inflation.

'The risk is high in the United States,' Almunia told the Nikkei Japanese business daily.-Reuters