The eight most developed nations have decided to work with five leading developing countries, including India, for a joint response to major challenges facing the world economy, but a move to grant them full membership to the elite club did not fructify.

In a joint declaration issued at the conclusion of their two-day annual summit in this Baltic Sea resort, the leaders of the G-8 nations said they decided to launch a new form of specific cooperation with India, Brazil [Images], China, Mexico and South Africa to initiate dialogue on key world economic issues with the aim of reaching concrete results within two years.

German Chancellor Angela Merkel, who hosted the summit attended by Prime Minister Manmohan Singh [Images], said it was important that for the first time a process for permanent contacts between the leading industrialised nations and the 'threshold nations' has been established in Heiligendamm.

The G-8 nations acknowledged that neither they themselves nor the major emerging nations alone will be able to cope with the major challenges that have arisen in the world economy.

"Therefore, they agreed on the need to develop common solutions by launching a new form of specific cooperation with the emerging nations," Merkel told a news conference after the summit.

The new initiative -- Heiligendamm Process -- was launched after the G-8 leaders' discussions with Dr Singh and the leaders of China, Brazil, Mexico and South Africa at a working session.

The issues they agreed to address are enhancing freedom of investment and investment conditions, including corporate social responsibility, promotion and protection of innovation, defining common responsibilities for development and sharing knowledge for improving energy efficiency and technology cooperation with the aim of contributing to reducing greenhouse gas emissions.

Replying to a question, Merkel said expanding the G-8 by admitting the major threshold nations as full members was not discussed at the summit because 'there were different views on this'.

In the run up to the summit, the Chancellor had spoken in favour of closely integrating the threshold nations into the G-8 fold, but several other G-8 members opposed a full membership preferring to preserve the exclusiveness of the rich nations' club.