"Recent experience suggests that the requirements for a successful liberalisation of portfolio flows are much more demanding than had been generally recognised," Camdessus told the committee on Monday.

Coming after last year's excessive enthusiasm for free capital movement across continents, IMF's climbdown is seen as a note of caution struck by the Bretton Woods Twins (IMF-World Bank) in the wake of the east Asian meltdown.

On Sunday, the Fund-Bank had acknowledged India and China for successfully handling their economies in the face of the global economic crisis.

Finance minister Yashwant Sinha had earlier stressed on thesame issues while proposing a seven-point package for the Fund-Bank. Besides a go-slow on capital account convertibility, Sinha had suggested curbs on short-term cross-border loans as a prudential norm rather than restriction.

While Camdessus and commitee chairman Carlo Ciampi denied a change in stance on capital account moves, a statement later said temporary impediments to capital movements have been utilised under certain specific circumstances.

"And in this regard, the committee asked the (IMF) board to review the experience with the use of control on capital movements and the circumstances under which such measures may be appropriate," the statement said.

It further said that opening of capital account must be carried out in an orderly, gradual and well-sequenced manner, keeping pace with the strengthening of countries' ability to sustain its consequences.

"The preconditions for a successful opening of national markets must be carefully ascertained and created. It is essential to preventparticipation in global capital markets from becoming a channel or a source of financial instability with the risk of negative spillovers onto the rest of the economy," the statement said.

United Nations under-secretary general Nitin Desai told the committee that though liberalising capital account could bring great benefits, the integration of capital markets also entailed significant risks.

Developing countries must therefore keep maximum autonomy in capital account liberalisation in the absence of adequate financial regulation at the global level, he said.