European leaders agreed Friday to stick to an ambitious plan to fight global warming through emissions cuts and renewable energy, and on ways to share the hefty costs of setting a global example.

The plan includes concessions to heavy industry and countries in Eastern Europe worried that the cost of curbing pollution would impede economic growth. The expense of the plan had caused uproar among many countries as the continent grapples with economic downturn.

The plan, agreed at an EU summit, lays out how the 27 member countries will cut carbon emissions by 20 per cent by 2020.

French President Nicolas Sarkozy, who holds the bloc's rotating leadership, called the agreement historic and urged global partners to follow Europe's example at United Nations climate change talks in Poznan, Poland.

The French president says the 27-nation bloc has "now delivered" and it was "now the time" for others, including the United States and China, to follow suit.

"People will not follow Europe unless we set the example," he said.

EU Commission President Jose Manuel Barroso called the plans "the most ambitious proposals anywhere in the world."

"Europe has passed its credibility test," he said.

An EU deal could breathe new life into the UN climate talks, which were expected to wrap up Friday with a work plan for talks over the next year on a new global warming treaty. But that plan needs worldwide support.

The eyes of Europe's economic rivals were on the EU talks to see how the bloc manages to balance economic growth while keeping intact promises to rein in emissions.

"The overall political message that we have sent to the rest of the world is that Europe is taking the lead," Danish Prime Minister Anders Fogh Rasmussen said at a news conference after the talks, confirming that the leaders agreed on the climate package.

European diplomats haggled through the night on complex plans to fulfill promises made last year to meet so-called 20-20-20 targets: reducing greenhouse emissions by 20 per cent and ensuring that 20 per cent of energy comes from wind, sun and other renewable sources by 2020.

Desperate to get a deal, France backed several opt-outs to the strict reductions it wants industries to make. The opt-outs are aimed at heavy industry that might flee abroad to regions with looser environmental rules.

France also proposed leeway for countries very dependent on coal and oil for power generation — but the EU plan that this leeway must be temporary.

The leaders also agreed on a $258 billion US Europe-wide economic stimulus package to ease the effects of a recession. The downturn overshadowed talks on the costly climate deal.