Part-nationalisation scheme unveiled to boost confidence in UK banks.

A rescue plan for banks worth at least £50bn - £2,000 per taxpayer – has been announced by the UK government.

The extra capital will initially be made available to eight of the UK’s largest banks and building societies. These include Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Royal Banks of Scotland and Standard Chartered but the Treasury has said others will be able to apply.

The huge public bailout will also see £200bn made available by the Bank of England for short-term borrowing to provide liquidity to banks and building societies.

The BBC also reported there would be “strings attached” including restrictions on executive pay and dividends for other shareholders.

The bold move is an attempt to restore confidence in the system and get banks lending again. It follows a day after chaos on the London stock exchange that saw RBS shares fall 39% and HBOS shares fall 41%.