Climate change emerged on Friday as the make-or-break issue at a meeting in Sydney of 21 Asia-Pacific leaders with rich and poor countries dividing on traditional lines.
Developing country members led by China were resisting a bid by host Australia to lock them into setting goals for reducing the emissions that cause global warming.
Prime Minister John Howard had hoped to close the Asia-Pacific Economic Cooperation (APEC) summit on Sunday with a declaration that set out "an agreed aspirational goal" for cutting emissions.
US President George W. Bush lined up behind Howard, saying, "In order for there to be an effective climate change policy, China needs to be at the table."
But Chinese President Hu Jintao refused to take the seat offered him, insisting that climate change agreements were best addressed through UN initiatives like the 1997 Kyoto Protocol.
Kyoto gives 35 developed countries legally binding reduction targets but developing countries only were required to pledge compliance at some later date.
Hu said the APEC declaration needed to give "full expression" to the primacy of the UN's role and acknowledge, "differentiated responsibilities" between rich and poor nations.
Hu's formulation emboldened Malaysia and other developing countries to demand a revision of a draft that Howard said he hoped to proclaim as the Sydney Declaration.
Howard is still pushing for the adoption of a "new flexible framework that includes a long-term global goal and encourages a wide range of natural actions by all with ongoing review processes."
This year's APEC host might yet be successful because the draft doesn't mirror Kyoto and fix actual targets - or prescribe any punishment for those who fail to reach their target.
In the view of developing countries, Australia lacks moral authority in asking them to play their part in a multilateral initiative to address climate change.
Along with the US, Australia refused to accept a reductions target in the Kyoto process - insisting that the pact was faulty because developing countries weren't obliged to bear any of the burden.
Some analysts said Howard had overreached himself in shooting for a strong statement on climate change. Others accused him of lacking seriousness in dealing with the issue.
Richard Woolcott, a former ambassador to Indonesia and head of the Foreign Affairs Department, said: "Howard talks of aspirational goals, probably because he knows no targets will be set."
If agreement on the draft can't be thrashed out at a ministerial level, the task of settling on an acceptable form of words would pass to the leaders themselves when they meet Saturday and Sunday in a private retreat.
The pressure is on for a settlement by Saturday - before Bush's evening flight aboard Air Force One back to Washington.
Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Taiwan, Thailand, the US and Vietnam comprise APEC, which represents half the world's trade, a third of its population and 60 per cent of the output of its goods and services.