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Honduras has unveiled a radical free-market plan to establish three "charter cities" in the violence-racked Central American nation.

The government this week signed an agreement with US developers MKG group to begin building the cities – complete with their own governments, laws, courts, police forces and tax systems – from scratch early next year.

The plan's backers say it is the only way to kick start development in Honduras, which has the world's worst murder rate – 68 times higher than the UK's – and where 65 per cent of the 8 million-strong population lives below the poverty line.