  We construct a centerless W-infinity type of algebra in terms of a generator
of a centerless Virasoro algebra and an abelian spin-1 current. This algebra
conventionally emerges in the study of pseudo-differential operators on a
circle or alternatively within KP hierarchy with Watanabe's bracket.
Construction used here is based on a special deformation of the algebra
$w_{\infty}$ of area preserving diffeomorphisms of a 2-manifold. We show that
this deformation technique applies to the two-loop WZNW and conformal affine
Toda models, establishing henceforth $W_{\infty}$ invariance of these models.
