TEHRAN The World Bank and the International Monetary Fund cannot totally cancel the debts of the world's poorest nations because the institutions do not have the cash, officials from both lenders said Monday.

"If you extend 100 percent debt relief to the 60 plus countries that are considered low income today, you basically are going to liquidate the multilateral development banks," Jacob Kolster, the World Bank's program manager for the heavily-indebted poor countries (HIPC) debt relief scheme told a news conference ahead of the IMF/World Bank spring meetings.

Kolster was responding to debt relief advocates who have demanded that the lenders expand the HIPC scheme to more countries and completely forgive the debts.

A recent independent report from London-based accountancy firm Chantrey Vellacot, sponsored by debt relief advocates, said the IMF and World Bank can afford to cancel 100 percent of poor countries' debt.

But the lenders have long maintained that total debt forgiveness is not possible unless its donor nations, like the United States, Japan and Europe and others, pay for it.

The HIPC initiative will forgive about half of the debts of 41 of the world's most impoverished nations in return for promises they will spend the savings on health and education, as well as initiatives to boost economic growth.

Masood Ahmed, deputy director of the IMF's Policy Development and Review Department, also said complete debt relief was not an option.

"We've come to the conclusion that it's not a sensible way to proceed," he said.

He said the IMF does not have the funds to write off all poor country debt and said that doing it for some countries and not others would be unfair.

Nevertheless, the IMF and the World Bank were confident the HIPC program had been a success. Kolster said the initiative had now been "delivered."

But the IMF is planning to request money for a new facility to help countries that have just emerged from conflict and that do not yet qualify for the HIPC program.

Debt relief will be discussed later this week when ministers and central bankers from around the world arrive in Washington for the IMF and World Bank spring meetings, where the lenders' agenda for the coming months is set.

Meanwhile, the IMF said Monday that Canada's economy would be adversely affected by any lingering recession in the United States, despite Canada's strong pace of economic growth over the last two years.

Strong consumer demand and business confidence were likely to cushion the Canadian economy against the slowdown in its neighbor to the south, the International Monetary Fund said in its annual report on the **** Canadian Economy ****, published Monday.

However, the Canadian economy would be "adversely affected if the slowdown in the United States proved to be sharper and more prolonged that envisaged," it said.

It said monetary policy should be the principle tool for sustaining growth in Canada. to that end, it deemed the recent interest rate cut by Canada's Central Bank a necessary measure.

The Bank of Canada should be "flexible, poised to act promptly" to lower interests further if necessary.