Britain is putting into place its second multi-billion bailout for its banks – after the 37 billion pounds aid three months back – whereby the banks would be allowed to insure against steep losses, and their would be guaranteed. The move appeared to be in the offing particularly due to the high interest rates on mortgages, and the fairly low number of loans.

The move, aimed at arresting the credit crunch, would get the banks to lend again to credit-starved consumers and companies; with the taxpayers’ money being put up to guarantee their tremulous balance sheets.

In addition, the rescue package – to be unveiled Monday - would provide for an increase in the government’s ante in Royal Bank of Scotland.

Referring to the core of the problem Alistair Darling, the Treasury chief said on Sunday that there were “blockages in the system,” which prevented the money infused into the financial sector from reaching out to the economy as a whole.

Ahead of the official figures that would corroborate recession having set into in the British economy, for the first time since 1992, Prime Minister Gordon Brown told reporters: “The essential problem is the resumption of lending.”

Brown added: “What we want to do is to see businesses get the money that they need to be able to create jobs and to secure the investments for the future. What I want to see is that people who are mortgage-holders have access to mortgages at a price they can afford.”