MercoPress. South Atlantic News Agency

Great Britain announces bank rescue plan

£50 billion bank rescue package

The British government has announced plans to partially nationalise the country's major banks, in a package using up to £50bn ($87.5bn) of taxpayers' money.

The British treasury said on Wednesday that Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Royal Bank of Scotland (RBS) and Standard Chartered have signed up for its so-called recapitalisation scheme. "Following discussions convened by HM Treasury ... major UK banks and the largest building society have confirmed their participation in a government-supported recapitalisation scheme," the statement said. As part of the plan, a credit line worth up to £200bn has also been opened to banks, the treasury said in a statement released before markets in London were due to open for trading.But London's FTSE 100 index of top shares dropped by 1.64 per cent to 4,529.64 at the start of trading. The British rescue package comes five days after the US House of Representatives passed a revised bailout scheme worth $700bn in an attempt to prop up ailing banks in the country, and as world stock markets continue to sink. Alistair Darling, the British finance minister, said that the plan is intended to boost the short-term flow of money through the banking system and encourage lending between banks. The decision comes a day after shares in RBS and Halifax Bank of Scotland (HBOS) fell by about 40 per cent on the stock market, amid fears over a lack of liquidity in the banking sector. Darling is expected to hold a news conference with Gordon Brown, the British prime minister, later on Wednesday.(Agencies)