Nato leaders have agreed to develop a missile defence shield to protect European member states as well as the US.

The missile system will involve stationing US interceptor missiles and radar in Europe. Officials have said the 28 Nato states will invest 200 million euros (£171 million) to link existing anti-missile systems to the US system.

US President Barack Obama said: "It offers a role for all of our allies. It responds to the threats of our times."

The leaders will invite Russia to join the system when they meet Russian President Dmitry Medvedev on Saturday.

Mr Obama said: "We look forward to working with Russia to build our co-operation with them in this area as well, recognising that we share many of the same threats."