Announcement expected this morning on £50bn rescue deal to avert banking sector collapse

Britain's largest banks are to be partly nationalised in an imminent UK bank rescue deal to be announced this morning.

Details of the scheme, on which a statement from the chancellor, Alistair Darling, is expected within the next few hours, include a proposal to pump £50bn of public money into the banking sector to avert a financial collapse.

The huge public bailout follows yesterday's tumultuous day on the London stock exchange, where some UK banks suffered a steep fall in share prices.

Gordon Brown
Brown is expected to say that this is "not a time for conventional thinking or outdated dogma"

Shares in banking group RBS fell 39%, after a 20% tumble the previous day, while rival HBOS fell by 41%. The FTSE 100 index rallied, however, as news of the proposals began to emerge.

The initiative is designed to stabilise the financial system by giving banks, which usually rely on world money markets, greater access to cash.

It is expected that Gordon Brown will describe the proposed rescue package as a “bold and far-reaching” solution.

He will add: “This is not a time for conventional thinking or outdated dogma but for fresh and innovative intervention that gets to the heart of the problem.”