Alistair Darling is to announce a comprehensive rescue package for Britain's embattled banks on Wednesday.

The Chancellor said he would full release full details of the plan, reported to involve up to £50 billion of taxpayers' money, before the stock markets open.

The announcement follows talks with Bank of England Governor Mervyn King and Financial Services Authority chairman Lord Turner.

Mr Darling said: "The Bank of England has been putting substantial sums into the market today and it is ready to do more when that is needed.

"We have been working closely with the Governor of the Bank of England, the Financial Services Authority and financial institutions to put banks on a longer term sound footing."

Royal Bank of Scotland was the latest banking giant to take a hammering on the stock market as the FTSE 100 struggled to recover from four-year lows.

The index finished the day 16.0 points higher at 4605.2 with RBS stock trading 56.9p down at 91.2p - a fall of 39 per cent and just off its lowest price for 15 years.

Halifax Bank of Scotland shares ended 41.5 per cent lower, down 66.8p to 94p, with Lloyds TSB off 13 per cent, down 33.5p at 225.5p, and Barclays down 9.25 per cent, or 29p to 285p. RBS and Barclays had denied making any such request to Mr Darling.

Across the pond, the Dow Jones Industrial Average was trading 75.4 points lower at 9880.1 at 5pm after Monday's sell-off, which in London saw the FTSE suffer its biggest one-day points drop and £93 billion wiped off the value of leading shares.

Elsewhere, Icelandic internet bank Icesave has stopped UK customers withdrawing or depositing money. It is part of Landsbanki, which has gone into receivership after its board of directors was dismissed.

Icelandic commerce and banking minister Bjorgvin Sigurdsson said Landsbanki will continue to run as normal while the board is replaced. The country has adopted sweeping powers over its banks amid a battered financial system and a currency plunge.

Winners: Friends Provident, up 10p to 85p, Vedanta Resources up 101p to 1005p, SABMiller up 99p to 1033p and Standard Life which closed up 23p to 255p.

Losers: HBOS, down 66.8p to 94p, RBS down 58.1p to 90p, Lloyds TSB down 33.5p to 225.5p and British Airways which ended the day 16.8p lower at 128.2p.

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