ABOARD A U.S. MILITARY AIRCRAFT (Reuters) - Defense Secretary Chuck Hagel said on Friday that cyber threats posed a "quiet, stealthy, insidious" danger to the United States and other nations, and called for "rules of the road" to guide behavior and avoid conflict on global computer networks.

Hagel said he would address cyber security in his speech on Saturday to the Shangri-La Security Dialogue in Singapore and the issue was likely to come up in a brief meeting with Chinese delegates on the margins of the conference.

"Cyber threats are real, they're terribly dangerous," Hagel told reporters on his plane en route to the gathering. "They're probably as insidious and real a threat (as there is) to the United States, as well as China, by the way, and every nation."

Cyber conflict could lead to "quiet, stealthy, insidious, dangerous outcomes," from taking down power grids to destroying financial systems or neutralizing defense networks, Hagel said.

"That's not a unique threat to the United States, (it affects) everybody, so we've got to find ways here ... working with the Chinese, working with everybody, (to develop) rules of the road, some international understandings, some responsibility that governments have to take," he said.

Hagel's remarks came two days after news reports said the Defense Science Board - a committee of civilian experts who advise the Defense Department - had concluded that Chinese hackers have gained access to the designs of more than two dozen major U.S. weapons systems in recent years. The Pentagon downplayed the report as outdated and overstated.

But the Defense Department underscored its concern about Chinese hacking in a separate report to Congress earlier this month, accusing Beijing of using cyber espionage to modernize its military.

The report said the U.S. government had been the target of hacking that appeared to be "attributable directly to the Chinese government and military."

Asked about Hagel's comments, Chinese Foreign Ministry spokesman Hong Lei said China wanted to exchange views with U.S. officials on "relevant issues" on the sidelines of the Singapore meeting.

"We believe that on this issue both sides should sit down and carry out an even-tempered discussion," Hong told a daily briefing, referring to cyber security.

"We should make the cyber security issue a highlight of bilateral cooperation and make joint efforts to maintain an open, cooperative, secure and transparent cyberspace," he said.

"THREAT TO ALL"

President Barack Obama has made cyber security a priority of the administration and will discuss his concerns with Chinese President Xi Jinping in a meeting in California next week, White House spokesman Jay Carney said this week.

Hagel told reporters on his plane to Singapore that he had invited Chinese Defense Minister Chang Wanquan to visit the United States and a trip was being organized for August.

Asked whether it was effective to deal with the issue by publicly naming China, Hagel said he thought both public diplomacy and private engagement were necessary. Public statements are necessary to let people know what is going on, he said, but it doesn't solve problems.

"The United States knows ... where many of these incursions come from," Hagel said. "It's pretty hard to prove that they are directed by any specific entity, but we can tell where they come from. And I think we've got to be honest about that."

The problem will ultimately be solved by more private discussions, he added. "But it has to be public as well and we'll deal with this. We must deal with this. This is a very dangerous threat to all of us."

Hagel is due to spend two days at the Shangri-La dialogue, engaging in bilateral and trilateral meetings with his Asian counterparts. He helped gain support for the annual dialogue as a U.S. senator more than a decade ago and was a leader of the first U.S. congressional delegation to the event.

After Singapore, Hagel will travel to a NATO ministerial meeting in Brussels that will hold its first review of cyber defense, a sign the issue is climbing to the top of the alliance's agenda due to concerns its infrastructure and secrets are vulnerable.

NATO Secretary-General Anders Fogh Rasmussen has said NATO systems face "regular" computer attacks. Of particular concern are the systems used to coordinate military actions among the 28 allied nations.

Hagel said cyber security would be a centerpiece of the NATO defense ministers meeting, adding "we all need to find ways, international standards, agreements" to commit to responsible use of cyber and "deal with these real threats."

(Additional reporting by Terril Yue Jones in BEIJING; Editing by Paul Simao and Robert Birsel)

A powerful new ultraviolet laser that fires into the night sky is helping scientists take their most detailed look yet at a distant star cluster.

A team of astronomers at the Southern Astrophysical Research (SOAR) telescope and the Cerro Tololo Inter-American Observatory (CTIO) in Chile used an instrument called SOAR Adaptive Module, or simply SAM, to peer deep inside the crowded NGC 6496 cluster to understand how itsevolved.

The researchers measured the color and brightness of over 7,000 stars in NGC 6496, and determined that the star cluster is 10.5 billion years old and 32,600 light years away from Earth the most exact measurement yet of the star cluster's key parameters. []

The study also suggests that NGC 6496s stars have a much higher proportion of elements heavier than hydrogen and helium than most clusters of its kind. The research will be detailed in an upcoming edition of the Astronomical Journal.

Star clusterscome in two types: globular clusters, which are home to hundreds of thousands of gravitationally bound and very ancient stars, many of them nearly 10 billion years old; and open star clusters, which are normally very young and contain only a few hundred stars.

NGC 6496 is a globular cluster. According to study team member Andrea Kunder of CTIO, such clusters are "some of the most interesting objects in the Milky Way, because they are so old, and also because they are some of the few visible objects in the galactic halo."

The galactic halo extends beyond the visible part of a galaxy and is composed mainly of , which cannot be observed directly, researchers said.

"Just like archaeologists use fossils to reconstruct the history of the Earth, astronomers use globular clusters to reconstruct the history of the galaxy," Kunder said. "There are only about 150 globular clusters known in the , so each of these globular clusters is an important tracer of the galactic halo and the formation of the Milky Way Galaxy."

NGC 6496 lies on the other side of Milky Way's center, so when you look at it from Earth, you have to peer through a lot of gas and dust. That is why during previous ground-based observations it was tricky to measure with certainty its basic parameters, such as its distance from the Earth and precise age, said study team member Luciano Fraga from the National Astrophysics Laboratory (LNA) in Brazil.In 2003 the cluster had been studied with the Hubble Space Telescope, and the new observations using SAM have made it possible to improve the original measurements.

It took a decade to develop and build SAM, at a cost of $4.5 million. And on its very first use it already helped to improve the image quality from observations.

"Quite honestly, this cluster was chosen because it was visible in the night sky when SAM was being commissioned. We needed a target to observe, and this cluster was up at the right time. We also knew that it hadn't been studied very extensively, so we thought we could contribute to a further understanding of the properties of this cluster," Kunder said.

Twinkling artificial stars

SAM is a type of a Laser Guide Star (LSG) a powerful laser that creates an . It is used as a reference star to help astronomers get a better image of the celestial object they wish to observe.

Most skywatchers are likely used to seeing stars twinkle. That twinkling appears because of the turbulence of the Earth's atmosphere. The atmospheric interference can make the image of a distant celestial object eyed with a ground-based telescope blurry. This fuzziness is especially unwelcome when looking at star clusters, where stars are close together and several stars may appear as one big one.

To sharpen the images, astronomers have to correct for atmospheric turbulence. To do so, they need to measure the blurring of a bright reference star in the vicinity of the object being observed. Telescopes with a so-called deformable mirror are then adjusted to cancel out the atmospheric distortion. This is called "," and makes it possible to achieve an image quality that is similar to that of telescopes in space. []

But natural stars are not always available to act as a reference. According to astronomers only about 1 percent of stars are bright enough to be used for adaptive optics. So in the vast majority of cases, they need to create a star from scratch by using lasers.

However, the wavelength of the laser has to be close to the wavelength observed by the telescope. On some major telescopes, such as the Very Large Telescope (VLT) at Paranal Observatory in Chile, astronomers use a powerful near-infraredat an altitude of about 90km, which allows them to make observations in the infrared range.

SAM, the new instrument, shoots an ultraviolet laser to the "ground layer" of the atmosphere at about 10km above sea level. That helps to guide the adaptive optics of telescopes working at visible wavelength. It is also cheaper to use, and covers a wider field of view (3 arc minutes).

Kunder said with its sharper images, the system made it possible to see that objects previously appearing as single bright stars were actually groups of two, three or even four stars.

"Stars that were otherwise compromised by light smearing out from the atmosphere were sharpened, allowing us to observe more stars with better precision," she added. "We could therefore peer into the heart of the cluster without worrying about the smearing out of light from the high density of stars in the very center of the cluster."

Editor's Note: This story was updated to correct an error in a press release describing the technology. The instrument is located at theSouthernAstrophysical Research (SOAR) telescope, not theSouthern Observatory for Astrophysical Research (SOAR), as was orignally stated.

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A spokesman for the Mara Salvatrucha, identified only as Marco, said the gang will commit to zero violence and zero crime in the streets as a first-step show of good faith. He spoke to reporters from a prison cell in San Pedro Sula, the Central American country's northern business capital and one of the world's most violent cities.

"Our truce is with God, society and authorities. We ask society and authorities to forgive us for the damage we have done," Marco said.

Minutes later, a leader of the rival 18th Street gang gave a separate news conference from another prison cell, saying his gang offers the same as the Mara Salvatrucha, "if the government will listen." His face was covered by a scarf and he didn't give his name.

The truce, patterned after one between the same two gangs in neighboring El Salvador, has been worked out over the last eight months with mediation by Roman Catholic Bishop Romulo Emiliani of San Pedro Sula.

President Porfirio Lobo said Monday that he was backing efforts by the church leader, saying he personally offered his support. But there has been no official government response so far.

Emiliani said last week when announcing the impending truce that the gangs need government help to break away from their criminal lives, including extorting money from businesses to finance their war with each other. He said authorities should try to turn Honduras' prisons into rehabilitation centers.

In El Salvador, authorities say the truce that began last year has sharply lowered the number of violent deaths. According to reports from Salvadoran public security authorities, homicides have dropped about 52 percent in the 14 months of the truce.

But there is skepticism that a gang truce could reduce violence that dramatically in Honduras, which is said to have the highest homicide rate in the world with anywhere from 85 to 91 killings per 100,000 people. About 20 people die violently every day.

A 2010 U.N. crime report said only 30 percent of the killings are the result of gang-on-gang violence.

"The dynamic of violence in the country goes beyond gangs and reflects the existence of multiple actors that are difficult to pinpoint," said Julieta Castellanos, the National University of Honduras rector whose son and a friend were slain in 2011, allegedly by Honduran police and not gang members.

She said she is concerned the agreement will mean even less criminal prosecution in a country with an enormously high impunity rate.

The 18th Street and Mara Salvatrucha are the country's biggest gangs, formed by Central American immigrants in U.S. prisons who later overran this small Central American country as their members were deported back home. Both engage in dealing drugs and charging extortion fees under threat of death. The 18th Street gang has said its members are being targeted by police death squads, not by rival gang members.

Marco said the gangs will stop recruiting as part of the truce, but they won't immediately stop extorting small businesses, bus and taxi drivers or everyday citizens, a major source of income. That's a major criticism of the truce so far in El Salvador, even though the government reports that extortion there is down.

"Let's go step by step," Marco said. "First zero crime and zero violence, stop the violence. And to stop the violence that's hurting human beings, we will talk about ways to find alternatives."

The two gang leaders who talked with journalists emphasized that so many young men go into the gangs because there are no legitimate jobs or opportunities, and they emphasized the need for work.

"We ask the government to help us so our young people learn a trade and don't turn out like us," Marco said. "I want my son to be a doctor or a cameraman, not a gangster."

Adam Blackwell, the Organization of American States' ambassador for security affairs, said the dialogue with the Honduran gangs started when he and Emiliani visited prisons in San Pedro Sula and Tegucigalpa and met with members of both groups.

Blackwell played an active role in negotiating the truce between the same two gangs in El Salvador.

"I use the term peace process to define what's happening in El Salvador and now here. Violence in Central America is at the same levels as in countries at war," he told The Associated Press. "You have to start building trust from somewhere and the community, the street, will tell us right away if it's working or not, whether they feel better. We'll all be able to see that."

Douglas Shulman, who vacated his position last November when his five-year term expired, told the Senate Finance Committee he didn't learn all the facts until he read last week's report by a Treasury inspector general confirming the targeting strategy.

In his first public remarks since the story broke, Shulman said: "I agree this is an issue that when someone spotted it, they should have brought it up the chain. And they didn't. I don't know why."

Shulman testified at Congress' second hearing on an episode that has largely consumed Washington since an IRS official acknowledged the targeting and apologized for it in remarks to a legal group on May 10. Shulman and the two officials who testified at Tuesday's three-and-a-half hour session the outgoing acting commissioner, Steven Miller, and J. Russell George, the Treasury Department inspector general who issued the report were all sworn in as witnesses, an unusual step for the Finance panel.

Shulman said he first learned about the targeting and about the inspector general's investigation in the spring of 2012, during the presidential election. He said that in a meeting with Miller, he was told that IRS workers were using a list to help decide which groups seeking tax-exempt status should get special attention, that the term "tea party" was on that list and that the problem was being addressed. But he said he didn't know what other words were on that list or the scope and severity of the activity.

Pressed by committee Chairman Max Baucus, D-Mont., on how the improper screening system could have occurred in the first place, Shulman said, "Mr. Chairman, I can't say. I can't say that I know that answer."

Shulman said he took what he thought were the proper steps making sure the inspector general was looking into the situation. He said he did not tell Treasury officials about the improper activity.

"I don't recall talking to anyone about it," Shulman told the committee. "This is not the kind of information" that, with an inspector general's probe underway, "should leave the IRS."

Asked by Sen. John Cornyn, R-Texas, whether he owed conservative groups an apology, Shulman said, "I'm certainly not personally responsible for creating a list that had inappropriate criteria on it."

That was a reference to a list of words IRS workers looked for in deciding which groups to screen, a list that included the terms including "tea party" and "patriot."

"I very much regret that it happened and that it happened on my watch," Shulman said.

The testimony by Shulman and Miller drew skepticism from lawmakers of both parties, including critical remarks from people who have been unhesitant to say anything negative about the IRS since its activities were revealed nearly two weeks ago. Republicans openly rejected George's assertion that he has no evidence that the decision to target conservative groups was politically motivated.

A lack of political motivation "is almost beyond belief," said Sen. Mike Crapo, R-Idaho.

George's report blamed ineffective management for allowing agents to inappropriately target conservative groups for more than 18 months during the 2010 and 2012 elections. Shulman was appointed by President George W. Bush and served from March 2008 until last November.

At a separate hearing, Treasury Secretary Jacob Lew said the IRS's actions against conservative groups were "unacceptable and inexcusable."

Lew told the Senate Banking Committee that he has directed the agency's incoming acting director, Daniel Werfel, to hold people accountable and to fix any flaws in IRS management to make sure there is no recurrence of the problems.

Lew said he first learned about the inspector general's investigation in March but that he was unaware of the findings until they became public this month. Lew became Treasury secretary in February, and was White House chief of staff before that.

For more than a year, from 2011 through the 2012 election, members of Congress repeatedly asked Shulman about complaints from tea party groups that they were being harassed by the IRS. Shulman's responses, usually relayed by a deputy, did not acknowledge that agents had ever targeted tea party groups for special scrutiny.

At one House hearing on March 22, 2012, Shulman was adamant in his denials, saying, "There's absolutely no targeting."

On Tuesday, Republicans expressed anger that Shulman and Miller didn't reveal the screening of conservative groups to Congress, despite lawmakers' repeated inquiries. Miller learned of the situation in early May 2012.

"Mr. Miller, that's a lie by omission," said Sen. Orrin Hatch of Utah, top Republican on the Finance committee. "There's no question about that in my mind. It's a lie by omission and you kept it from people who have the obligation to oversee this matter."

President Barack Obama has forced Miller to resign, and he is leaving office this week.

Shulman said he didn't later tell lawmakers about the targeting because he didn't have full information about the situation.

"I had a partial set of facts," Shulman said. "Sitting there then, sitting here today, I think I made the right decision" to let George, the inspector general, conduct his audit of the targeting.

Shulman said that when he did finally read about the details of the targeting in the inspector general's report, "I was dismayed and I was saddened."

Hatch and Baucus both criticized the agency and said they would investigate how and why the improper screening occurred.

"I intend to get to the bottom of what happened," Baucus said.

George, the Treasury inspector general, has said he told Shulman on May 30, 2012, that his office was auditing the way applications for tax-exempt status were being handled, in part because of complaints from conservative groups. However, George said he did not reveal the results of his investigation.

The IRS agents were conducting the screening to determine whether the groups were engaged in political activity. Certain tax-exempt groups are allowed to engage in politics, but politics cannot be their primary mission. It is up to the IRS to make the determination, so agents are supposed to look for clues when reviewing applications for tax-exempt status.

In March 2010, agents starting singling out groups with "Tea Party" or "Patriots" on their applications. By August 2010, it was part of the written criteria for identifying groups that required more scrutiny, according to George's report.

Agents did not flag similar progressive or liberal labels, though some liberal groups received additional scrutiny because their applications were singled out for other reasons, the report said.

Meanwhile, a conservative organization that says its tax-exempt status is being unfairly held up by the IRS filed a federal lawsuit in Washington against the agency. True the Vote, a Houston group that watches for voting irregularities, is seeking damages and asking to immediately be granted tax-exempt status.

Citizens for Responsibility and Ethics in Washington, a campaign finance watchdog, also sued the IRS on Tuesday, seeking to force it to write new rules clarifying restrictions on political spending by some non-profit groups. The law says some groups qualify for tax-exempt status if they engage "exclusively" in social welfare projects, but IRS regulations allow the status if they are "primarily engaged" in social welfare giving them leeway for some political activity as well.

NEW YORK (Reuters) - After more than 15 years of failures by scientists around the world and one outright fraud, biologists have finally created human stem cells by the same technique that produced Dolly the cloned sheep in 1996: They transplanted genetic material from an adult cell into an egg whose own DNA had been removed.

The result is a harvest of human embryonic stem cells, the seemingly magic cells capable of morphing into any of the 200-plus kinds that make up a person.

The feat, reported on Wednesday in the journal Cell, could re-ignite the field of stem-cell medicine, which has been hobbled by technical challenges as well as ethical issues.

Until now, the most natural sources of human stem cells have been human embryos, whose use in research poses ethical quandaries. The technique announced on Wednesday, by scientists at Oregon Health & Science University and the Oregon National Primate Research Center, uses unfertilized human eggs.

Eliminating the need for human embryos could boost attempts to use stem cells and their progeny to replace cells damaged or destroyed in heart disease, Parkinson's disease, multiple sclerosis, spinal cord injuries and other devastating conditions.

But the achievement could also revive fears of reproductive cloning, or producing genetic copies of living (or dead) individuals.

Even before the study was published, a British watchdog group called Human Genetics Alert protested the research.

"Scientists have finally delivered the baby that would-be human cloners have been waiting for: a method for reliably creating cloned human embryos," said Dr. David King, the group's director. "This makes it imperative that we create an international legal ban on human cloning before any more research like this takes place. It is irresponsible in the extreme to have published this research."

Among scientists, however, the accomplishment is being hailed as "a tour de force," as stem cell biologist George Daley of the Harvard Stem Cell Institute put it. "This represents an unparalleled achievement. They succeeded where many other groups failed, including mine."

The highest-profile failure was that of biologist Hwang Woo-suk of Seoul National University in South Korea. In 2005 he and his team made headlines across the globe when they claimed, in the journal Science, that they had created human embryonic stem cells via nuclear transfer, the same technique the Oregon scientists used. Hwang's claim turned out to be a lie, making it one of the most infamous cases of scientific fraud in the last decade.

DOLLY THE SHEEP

If the Oregon achievement holds up and can be replicated by scientists in other labs, it would offer a third, and potentially superior, way of producing embryonic stem cells.

The field of stem cells took off in 1998, when scientists led by Jamie Thomson at the University of Wisconsin announced that they had harvested the cells from days-old human embryos, called blastocysts, obtained from fertility clinics.

The fact that the blastocysts are destroyed when their stem cells are removed ignited a furor from groups that believe life begins at conception. In 2001, President George W. Bush banned federal funding for research that would create more blastocysts, but stem cells already produced from them were fair game.

Those cell lines turned out to be fewer and of poorer quality than scientists had hoped. The next breakthrough came in 2007, when Shinya Yamanaka of Kyoto University produced human embryonic stem cells in a way that did not require eggs or embryos. He added four genes to adult cells, and the result was like turning back the calendar: The adult cells, which he called induced pluripotent (iPS) cells, showed all the properties of embryonic stem cells, an achievement for which Yamanaka shared last year's Nobel prize in medicine.

"The whole scientific community jumped on the iPS bandwagon," said Dr. Robert Lanza, chief scientific officer of Advanced Cell Technology.

That turned attention away from a third technique for producing embryonic stem cells: the method that created Dolly the sheep in 1996. Scientists in Scotland had started with a sheep oocyte (egg), removed its DNA and replaced it with DNA from a sheep mammary gland cell. They zapped the egg with electricity to make it grow and divide like a fertilized embryo. No sperm were necessary.

This technique is called somatic cell nuclear transfer (SCNT). If the embryo is implanted inside a surrogate mother, as the Dolly team did, the result is reproductive cloning, which has also been done for mice, cows and other animals. But if embryonic development is halted after five days or so, the result is stem cells genetically identical to the donor's - and thus custom-made for therapies to treat degenerative diseases without fear of rejection by the patient's immune system.

The Oregon scientists, led by Shoukhrat Mitalipov, used a variation of the Dolly technique. They carefully inserted an adult skin cell into a donated human egg whose DNA had been removed. The unfertilized eggs, stimulated by electric pulses to start dividing, developed to about the 150-cell stage.

The cells were all true embryonic stem cells; they have the "ability to convert just like normal embryonic stem cells, into several different cell types, including nerve cells, liver cells and heart cells," said Mitalipov. "While there is much work to be done in developing safe and effective stem cell treatments, we believe this is a significant step forward in developing the cells that could be used in regenerative medicine."

ODD EGGS

In succeeding with humans, the Oregon team toppled the dogma that there is something odd about human eggs or embryos, said stem cell expert Rudolf Jaenisch of the Whitehead Institute and Massachusetts Institute of Technology: "Published data said there was a difference in principle between humans and the mice and other animals that had been cloned, a difference that presented an insurmountable barrier to human cloning" for either reproduction or stem cells.

The Oregon team figured out how to get the egg to act as if it had been fertilized. The secret was to keep the eggs in the phase of their growth cycle called "metaphase," which is when DNA aligns in the middle of the cell before the cell divides. The scientists got the best results when they grew the eggs in a little of a substance that tends to be abundant in labs: caffeine.

When conducting the same experiment with monkeys, the Oregon scientists stopped at the production of stem cells and never implanted the ball of cells into a surrogate mother. Mitalipov said reproductive cloning is "not our focus, nor do we believe our findings might be used by others" to do it with humans.

"Reproductive cloning hasn't been advanced by this new paper," agreed MIT's Jaenisch. "If you implanted these embryos, which would be illegal, I think you would get the same results as in mice: Most of them die at birth, and the others encounter big troubles as they age."

STEM CELL FACE-OFF

Now the question is whether embryonic stem cells produced with the Dolly method would be superior to those created with the turn-back-the-calendar iPS method.

Scientists have already found that iPS cells tend to age prematurely and die. They are also created with cancer-causing genes, which could make them dangerous to use therapeutically.

Another possible advantage of the embryonic stem cells produced by the Dolly method: It takes just days, compared with weeks for iPS cells.

"If you have a patient who needs, that can be an important difference," said Natalie DeWitt of the California Institute for Regenerative Medicine.

On the other hand, the human eggs needed for the Dolly technique are in short supply and hard to obtain, notes MIT's Jaenisch. (The Oregon team paid the women who donated eggs for their time and "discomfort.") Although the Oregon team coaxed stem cells out of every egg they collected from one of the women, other labs might not be so efficient.

If the Dolly technique becomes a reliable source of embryonic stem cells, it might accelerate clinical trials of the cells, which have been slow to get going and disappointing.

In 2011, for instance, biotechnology firm Geron halted a clinical trial that used embryonic stem cells to repair spinal cord injuries and said it was leaving the field.

The most promising human study is ACT's. It is two years into clinical trials using stem cells derived from human embryos to treat two forms of blindness, including macular degeneration, with encouraging results. One patient's vision went from 20/400 to 20/40, said Lanza.

(Reporting by Sharon Begley; Editing by Michele Gershberg and Douglas Royalty)

LONDON (Reuters) - Google Inc's tax affairs came under renewed scrutiny in Britain on Wednesday when the leader of the opposition Labour party accused the Internet company of wrongly going to "extraordinary lengths" to avoid paying tax.

In comments designed to politically outflank Prime Minister David Cameron ahead of next month's G8 summit on what has become a high-profile issue, Ed Miliband, the Labour leader, said he was disappointed that Google paid so little tax.

"I can't be the only person here who feels disappointed that such a great company as Google ... will be reduced to arguing that when it employs thousands of people in Britain, makes billions of pounds of revenue in Britain, it's fair that it should pay just a fraction of one percent of that in tax," Miliband told a Google event held just outside London.

"So when Google does great things for the world, I applaud you. But when (Google Executive Chairman) Eric Schmidt says its current approach to tax is just 'capitalism', I disagree. When Google goes to extraordinary lengths to avoid paying its taxes, I say it's wrong."

Google's methods of minimizing its British tax bill have made headlines at a time when voters' incomes are being squeezed, putting pressure on politicians.

Lawmakers have accused Google of using "smoke and mirrors" to avoid paying tax. Its northern Europe boss, Matt Brittin, was called back to testify to parliament after a Reuters investigation showed the company employed staff in sales roles in London, even though he had told the committee in November its British staff were not "selling" to British clients.

Schmidt defended his company's tax policy at the same event on Wednesday, saying its behavior was not unethical and that it was "trying to do the right thing".

"Virtually all the American companies have structures like this. This is how the international tax regime works," he told an audience at the event. "If that changes, we will follow."

CAPITALIST COMPANY

When asked whether Google intended to comply with the spirit not just the letter of the tax law, he said he would need to have the distinction between the two explained to him.

"The answer is more complicated because we're governed by U.S. securities law," he said. "Google is a capitalist country ... company," he added, to laughter and applause from the audience.

Cameron, who has placed global tax regulation at the heart of the G8 summit he is chairing in June, has been coy about singling Google out for criticism, preferring to talk more generally about corporate tax avoidance.

Miliband, whose party is ahead of Cameron's Conservatives by up to 10 percentage points in opinion polls, criticized Cameron for not taking a tougher line.

"Google is said to have paid only 10 million pounds in corporation tax in the UK between 2006 and 2011, despite revenues of 11.9 billion pounds," Miliband wrote separately in a blog for The Huffington Post UK on Tuesday.

"I was surprised the prime minister failed to raise this when Eric Schmidt attended the business advisory council's meeting."

Nick Clegg, the deputy prime minister, told Schmidt at the same meeting that firms like Google shouldn't wait to be pressured into changing their tax practices, a senior source from Clegg's Liberal Democrat party said on Wednesday. Cameron raised the issue too, but did not criticize Google specifically.

Britain will host a meeting of G8 leaders on June 17-18 at a golf resort in Northern Ireland and Cameron said in April that tax compliance was one of his G8 priorities.

Google is one of several high-profile companies to face far greater scrutiny of its tax affairs in recent months. Apple Inc., Microsoft and Amazon.com have all been in the spotlight at a time of weak economic growth, high levels of public debt and squeezed household incomes in Britain.

Schmidt said his company, which is building a new headquarters in central London, would not change its investment plans even if it was forced to pay more tax.

"Google will continue to invest in the UK no matter what," he said.

(Editing by Michael Roddy)

The new test, which goes on sale Wednesday, joins another one that recently came on the market. Both analyze multiple genes in a biopsy sample and give a score for aggressiveness, similar to tests used now for certain breast and colon cancers.

Doctors say tests like these have the potential to curb a major problem in cancer care overtreatment. Prostate tumors usually grow so slowly they will never threaten a man's life, but some prove fatal and there is no reliable way now to tell which ones will. Treatment with surgery, radiation or hormone blockers isn't needed in most cases and can cause impotence or incontinence, yet most men are afraid to skip it.

"We're not giving patients enough information to make their decision," said Dr. Peter Carroll, chairman of urology at the University of California, San Francisco. "You can shop for a toaster" better than for prostate treatment, he said.

A study he led of the newest test the Oncotype DX Genomic Prostate Score is set for discussion Wednesday at an American Urological Association meeting in San Diego.

The results suggest the test could triple the number of men thought to be at such low risk for aggressive disease that monitoring is a clearly safe option. Conversely, the test also suggested some tumors were more aggressive than doctors had believed.

Independent experts say such a test is desperately needed but that it's unclear how much information this one adds or whether it will be enough to persuade men with low-risk tumors to forgo treatment, and treat it only if it gets worse. Only 10 percent who are candidates for monitoring choose it now.

"The question is, what's the magnitude of difference that would change the patient's mind?" said Dr. Bruce Roth, a cancer specialist at Washington University in St. Louis.

One man may view a 15 percent chance that his tumor is aggressive as low risk "but someone else might say, 'Oh my God, let's set the surgery up tomorrow,'" he said. "I don't think it's a slam dunk."

Also unknown: Will insurers pay for the expensive test without evidence it leads to better care or saves lives?

The newest test was developed by Genomic Health Inc., which has sold a similar one for breast cancer since 2004. Doctors at first were leery of it until studies in more groups of women proved its value, and the same may happen with the prostate test, said Dr. Len Lichtenfeld, the American Cancer Society's deputy chief medical officer.

The company will charge $3,820 for the prostate test and says it can save money by avoiding costlier, unnecessary treatment. Another test for assessing prostate cancer risk that came out last summer Prolaris by Myriad Genetics Inc. sells for $3,400.

Both companies can sell the tests without Food and Drug Administration approval under separate rules that govern lab diagnostics. Myriad Genetics has published nine studies on Prolaris involving more than 3,000 patients. Genomic Health has not published any results on the prostate test, another thing that makes doctors wary. Yet it has a track record from its breast cancer test.

About 240,000 men in the U.S. are diagnosed with prostate cancer each year, and about half are classified as low risk using current methods. Doctors now base risk estimates on factors such as a man's age and how aggressive cells look from biopsies that give 12 to 14 tissue samples. But tumors often are spread out and vary from one spot to the other.

"Unless you can be sure your biopsy has hit the most aggressive part that's in the prostate, you can't be sure" how accurate your risk estimate is, explained Dr. Eric Klein, chief of urology at the Cleveland Clinic,who led early development of the Oncotype prostate cancer test.

For one study, researchers used prostates removed from 440 men. They measured the activity of hundreds of genes thought to be involved in whether the cancer spread beyond the prostate or proved fatal. A second study of biopsies from 167 patients narrowed it down to 81 genes, and researchers picked 17 that seemed to predict aggressiveness no matter the location in the tumor.

A third study used single needle-biopsy samples from 395 UCSF patients scheduled to have their prostates removed. The gene test accurately predicted the aggressiveness of their cancer once doctors were able to see the whole prostate after surgery.

Using one current method, 37 of the 395 men would have been called very low risk and good candidates for monitoring. Adding the gene test put 100 men into that category, said another study leader, Dr. Matthew Cooperberg of UCSF.The gene test shifted about half of the men into either a lower or a higher risk category.

"It went both ways that was the remarkable thing. In any category of risk it added independent information compared to the standard criteria we use today," Carroll said. "More work needs to be done, but, in my opinion, this is a very good start."

However, Dr. Kevin McVary, chairman of urology at Southern Illinois University School of Medicine and a spokesman for the Urological Association, said the test must be validated in more men before it can be widely used.

"It's not there yet," he said.

UCSF just got a federal grant to see how men choose treatments and whether this test might sway them.

"We throw all these numbers at them. Are they really going to make a better decision?" Cooperberg said.

Dean Smith, 60, a retired marketing executive from Mill Valley, Calif., is following his doctor's advice to monitor the cancer he was diagnosed with in March. He said a gene test may have made him more comfortable with that decision.

At least six of his friends suffered side effects ranging from urinary leakage to inability to have sex after having their prostates removed.

"I would suspect that having cancer and having to live with it would be very difficult for them," but it doesn't bother him, Smith said. "I will die from something other than prostate cancer, I guarantee you."

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

WASHINGTON (AP) -- Anger over President Barack Obama's policies drove businessman Tom Zawistowski to file paperwork with the Internal Revenue Service nearly three years ago to create the Ohio Liberty Coalition.

His nonprofit organization largely attracted conservatives who were new to politics but concerned about the growth of government, fiscal issues and perceived threats to Americans' constitutional protections. It eventually swelled to more than 20,000 members, becoming one of the region's largest groups affiliated with the national tea party movement that emerged in the early months of Obama's first term.

Over the next few years, the Ohio Liberty Coalition would raise thousands of dollars to bus activists to rallies, run phone banks, rent a tent at a local fair, and knock on roughly 40,000 doors across Ohio to challenge the president and his fellow Democrats in the 2012 elections.

All the while, the organization was locked in a battle with the nation's tax enforcement agency over whether it should be granted tax-exempt status.

"They expected me to turn over the names of our members to the IRS. You'd have to kill me to get me to do that," said Zawistowski, who was among the first tea party leaders to formally protest the agency's actions last year. "I wouldn't accept tyranny."

It often takes a year for "social welfare organizations" to get tax-exempt status, which requires them to prove they're not primarily devoted to politics. But the IRS acknowledged last week that it inappropriately applied heightened scrutiny to conservative groups even though it's supposed to regulate the nation's tax laws without political interference. The revelation drew criticism from Republicans and Democrats, sparked a Justice Department investigation and prompted Obama to call the allegations "outrageous" if true.

The episode has pumped new energy into the tea party movement after a disappointing 2012 election season and created a bipartisan political headache for Obama at a critical time as he looks to get as much of his agenda passed as possible before all the focus shifts to next year's midterm congressional elections.

Zawistowski's experience is not uncommon among tea party and conservative groups.

As it did with other conservative groups, the IRS largely ignored Zawistowski's application for a year and a half and then refused to approve his nonprofit status unless he revealed the identity of the group's members, times and location of group activities and printouts of its website and Facebook pages, according to IRS correspondence reviewed by The Associated Press.

The IRS also requested "detailed contents of the speeches or forums, names of the speakers or panels and their credentials" for all future and past public events, according to one of the IRS letters.

"The intent of this was to hurt the ability of tea party groups to function in an election year. They were successful to a degree," said Zawistowski, a 57-year-old businessman who had virtually no political experience before joining the tea party movement. "It took an enormous amount of time and energy for me to handle this."

The IRS has refused to discuss individual cases, but it has apologized for "inappropriate" targeting of conservative political groups during the 2012 election to see whether they were violating their tax-exempt status. The agency blamed low-level employees in a Cincinnati office for targeting applications with words such as "tea party" and "patriot." In January 2012, the criteria for additional screening were updated to include references to the Constitution or the Bill of Rights.

In some cases, the IRS acknowledged, agents inappropriately asked for lists of donors.

There is no definitive listing of the hundreds of tea party groups that sprung up across the nation in the past four years, but an AP analysis of 93 organizations that describe themselves as "tea party" or "patriot" groups found that many, like Zawistowski's, appear to have operated on small budgets.

Just two dozen of those organizations raised more than $20,000 in a single year, according to tax returns submitted by tea party groups between 2009 and 2011.

The Richmond Tea Party, based in Richmond, Va., began its application for tax-exempt status in December 2009 but didn't receive the status until July 2012, after more than two years had passed.

The group's executive director, Laurence Nordvig, called the experience "like your worst audit nightmare."

"I liken it to the movie 'Groundhog Day.' It's Groundhog Day every day," he said, referring to the 1993 Bill Murray movie in which a man relives the same day over and over. "Dealing with this was like dealing with tax day every day for two and a half years. It was like a cloud that hung over the organization."

The controversy partly is rooted in the patchwork oversight by federal agencies over the rapidly evolving realm of national political spending. In recent years, interest groups across the political spectrum have taken advantage of the tax code to set up tax-exempt organizations able to shield their donors' identities while scooping up millions of dollars in donations to pay for massive election-year media campaigns and voter information efforts.

The IRS typically treats these nonprofit operations as "social welfare" groups, allowing them to raise unlimited amounts of donations and keep their donors' identities secret, as long as they show that they do not primarily engage in political activities.

The 2012 national elections were dominated by free-spending political operations that blended the use of nonprofit advocacy groups with a separate new breed of "super" political action committees, or super PACs, spawned by a series of court cases, including the Supreme Court's 2010 Citizens United decision.

Good government groups and several Democratic senators, notably Sen. Chuck Schumer, D-N.Y., have pressed the IRS recently to look more skeptically at the nonprofits' internal operations, claiming some groups were far more politically active than they let on. But lawyers for tea party groups say many low-budget grass-roots conservative organizations ended up being swept up in IRS audits instead of the larger nonprofits.

The most well-funded nonprofit tea party group targeted by the IRS appears to be the Tea Party Patriots, a Georgia-based organization that grew dramatically between 2009 and 2011. The group raised $706,000 in 2009, but revenues surged to $12.2 million in 2010 and $20.2 million in 2011, according to tax filings.

The sources of the group's sudden largess are unknown because donors' identities remain secret under IRS rules.

Alan Dye, an attorney for the Tea Party Patriots, said the IRS has been "very vague" about the rules governing social welfare organizations. "You shouldn't have to guess about the rules," said Dye, who represents six groups that fielded invasive questions from IRS agents.

While some of his clients were asked and subsequently refused to reveal donors, he said groups have been most affected by the lengthy delays in IRS' processing. Standard tax-exempt applications generally take about a year to process, he said. The Tea Party Patriots has already been waiting 30 months for its approval.

The Ohio Liberty Coalition first applied in June 2010 and had its tax-exempt status approved exactly one month and one day after Obama won re-election in 2012. While waiting, Zawistowski said, his and his wife's personal finances were audited.

"The question is, how do we stop this from happening again?" he said. "How do you stop the IRS from being used as a weapon against the American people? I don't know how you make a rule to do that."

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Peoples reported from Boston. Associated Press writer Henry C. Jackson in Washington contributed to this report.

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