The escalation of fighting in the Middle East is the lead in some of the Sunday's.

The Independent reports that

A massive wave of Israeli air strikes, launched yesterday against Hamas in Gaza, has killed at least 227 people – the highest death toll in a single day in the territory since the end of the 1967 Six Day War.
Warplanes and combat helicopters launched their ferocious assault on the Islamic faction's security compounds and rocket launching pads in what Israel said was a response to about 470 Qassam missiles and mortars, launched from Hamas-controlled Gaza since a five-month ceasefire began to break down in November.

The Observer adds that

As world leaders called for an immediate end to the biggest air assault on Gaza since 1967, Ehud Barak, the Israeli defence minister, refused to rule out a ground invasion in the next few days saying that the retaliation against rocket attacks by Hamas had only just begun. "It won't be easy and it won't be short," said Barak. "There is a time for calm and a time for fighting, and now the time has come to fight."

Bishops deliver damning verdict on Britain under Labour rule is the lead in the Telegraph

Five of the Church’s most senior figures said the Government now presided over a country suffering from family breakdown, an unhealthy reliance on debt and a growing divide between rich and poor.
The Bishop of Manchester accused Labour of being “beguiled by money” and “morally corrupt

Meanwhile the Mail reports that

The Queen has endorsed a crackdown on honours for bankers and leading City figures because of their role in causing the economic crisis.
As a mark of Royal displeasure, leading figures from the world of finance are understood to have been omitted from the New Year’s Honours List to be unveiled this week.
The disclosure that there will be ‘few, if any’ high-ranking awards for financiers has filtered through to the City, where it has deepened the dismay among a demoralised and shrinking workforce.

The News of the World reveals that

CHILDREN’S champion Sara Payne will pick up an MBE in the New Year’s Honours list after being personally recommended by Gordon Brown.
A Downing Street insider told the News of the World the Prime Minister has been a keen supporter of Sara during her battle to keep Britain’s kids safe from paedophiles.

The Times reports that

The Conservatives are poised to propose three new tax cuts to help recession-hit families, savers and pensioners in a bold attempt to shed their “do nothing” image.
A future Tory government would aim to reduce National Insurance, income tax on savings and the tax burden on the over-65s, George Osborne, the shadow chancellor, will say.
The move follows criticism that the Conservatives have failed to support ordinary people during the economic downturn, allowing Gordon Brown to seize the political initiative

Brown: we need Dunkirk spirit in 2009 says the Observer

Gordon Brown today calls on the British people to summon the same patriotic and optimistic spirit that guided them though second world war, as he warns that 2009 will be a year of grave "danger", uncertainty and "enormous economic challenge".
In a New Year message heavy with Churchillian echoes, the prime minister insists that he and his government will be the "rock of stability" upon which people can stand as the economy slides fast into the worst recession for a generation.

According to the Independent

Gordon Brown will today use his New Year message to broker a new "coalition for change" with Barack Obama on the economy, the environment and the war on terrorism.
In an attempt to make a decisive break from the Blair-Bush era of transatlantic diplomacy, the Prime Minister sets out the terms for the new special relationship with the president-elect ahead of his inauguration next month.

Near disaster yesterday as many of the papers report that Lottery chaos as computer fault leaves thousands without tickets

The National Lottery was in chaos last night after a computer glitch crashed terminals in stores across Britain – leaving hundreds of thousands of people unable to buy tickets.
Sales of tickets for the £4.2million jackpot on one of the biggest nights of the year were hit after terminals started displaying problems at around 11am.
Despite the problem the draw was due to go ahead as normal last night.

reports the Mail

Pay cuts and freezes loom for millions in private sector reports the Times

David Frost, director-general of the British Chambers of Commerce (BCC), said: “First of all employers talked of pay freezes, but in the last two weeks directors have started talking to me about reducing pay next year.
“This is the third recession I’ve seen, and I’ve never seen employers cutting wages before. This shows how bad things have got – nothing is now off limits. If this keeps more people in work it’s surely the better of two evils.”

The Independent reports that UK's holiday waste smashes all records

Waste watchdogs warned yesterday that rubbish from the estimated 100 million toys unwrapped last week is likely to burn big holes in the ozone layer as well as in parents' pockets.
The Waste and Resources Action Programme (Wrap) said toy manufacturers are not putting enough information about recycling on their packaging and, as a result, most of it will be sent needlessly to landfill. Over Christmas 2008 alone, this will lead to more than 400 extra tonnes of harmful C02. The news is a blow to the Government's 2007 Waste Strategy, which aims to see 40 per cent of all household waste recycled by 2010.

One in 10 shops will stand empty says the Telegraph

The prediction comes despite a Boxing Day sales bonanza driven by unprecedented discounts and a last-minute Christmas Eve surge in gift-buying.
Retail analysts Experian said the number of shoppers at the December 26 sales was up 12.5 per cent on last year, while John Lewis said the final four shopping days in the run-up to Christmas saw sales rise 2.5 per cent on last year.

Sales stampede too late for Woolies says the Observer

The shutters began coming down on 99 years of high-street history last night as Woolworths closed a quarter of its 800 stores. Unless a last-minute buyer is found, the remaining 600 will shut next week with the loss of 27,000 jobs, killing off one of the best known names in retailing. The chain called in administrators last month amid debts of £385m.

According to the Times,Bush’s $300m library in danger of becoming white elephant

Bush has bought a $3m (£2.05m) house in a Republican enclave 10 minutes away from his proposed library and hopes to play an active role in the policy institute that will be established there. With his approval ratings at a record low of 20%, according to a CBS poll, he is keenly interested in shaping the verdict of history

but says the paper

So far, fundraising has been “very modest”, according to Dan Bartlett, a former senior White House aide and spokesman for the library

Meanwhile more problems for the president as the Observer reports that

A $70m lawsuit filed by Dan Rather, the veteran former newsreader for CBS Evening News, against his old network is reopening the debate over alleged favourable treatment that Bush received when he served in the Texas Air National Guard during the Vietnam war. Bush had hoped that this controversy had been dealt with once and for all during the 2004 election.

The Independent reports that Stalin vies for top spot in 'greatest Russian' TV contest

He massacred millions of his own people, enforced a system of terror that plagues Russia to this day and, to top it all, he was Georgian. But Joseph Stalin, the former Soviet leader, has a strong chance of winning the mantle of Russia's greatest historical figure.
More than two million votes have been cast in state-run Rossiya television's Name of Russia contest, modelled on the BBC's Great Britons, with the result to be announced today.

Earl of Wessex in gun dog 'cruelty' row reports the Telegraph

The Earl of Wessex has found himself at the centre of an animal cruelty row after being captured on film raising his stick to one of his dogs during a pheasant shoot.
Prince Edward, 44, reacted when he saw two black Labradors trying to grab hold of the same dead bird on the Sandringham estate in Norfolk.
He went up to the dogs with his shotgun tucked under his arm and his four-foot long stick raised in the air. He then brought down the stick – a shepherd's crook – in the direction of one of the dogs, but it is not known if he made contact.

Finally staying with dogs,according to the Times

One of Britain’s most eminent vets has warned that dogs suffer as many injuries chasing and catching sticks as they do on Britain’s roads.
Owners are being advised that to protect their pets from accidental stabbing or choking, they should never throw sticks. Instead they should use rubber throwing toys or a suitably sized ball.
Dan Brockman, professor of small animal surgery at the Royal Veterinary College, has catalogued dozens of serious injuries and infections, almost all the result of animals being stabbed as they rushed after a sharp stick.