Darling to unveil rescue package

3:24am Wednesday 8th October 2008

A comprehensive rescue package for the UK's embattled banks is to be unveiled by the Government.

Chancellor Alistair Darling will announce details of the proposals, reported to involve up to £50 billion of taxpayers' money, before the stock market opens at 8am on Wednesday.

It is expected that the plan will include a cash injection for the banks to bolster their depleted balance sheets. In return, the taxpayer will own a stake in the banks.

The package is also expected to include access to a stand-by facility for the banks to ensure they have sufficient funds for day to day operations.

Details were finalised at a Downing Street meeting on Tuesday evening between Mr Darling, Bank of England Governor Mervyn King and Financial Services Authority chairman Lord Turner which was also joined by Prime Minister Gordon Brown.

It followed another torrid day in the markets which saw bank shares take a pummelling, massively increasing the pressure on the Government to a act.

The Royal Bank of Scotland was the latest institution to be heavily hit by the financial turmoil, seeing almost 40% wiped off the value of its shares.

Lloyds TSB, HBOS, and Barclays also saw their share prices tumble amid uncertainty over whether the Government was prepared to act.

The Chancellor announced after the talks that he would make an early-morning statement about proposals to put banks on "a longer term sound footing".

Shortly afterwards there will be a meeting of the PM's new National Economic Council "war cabinet", a Downing Street press conference with Mr Brown and his Chancellor and a statement by Mr Darling to the House of Commons following Prime Minister's Questions.

Latest news, sport and entertainment