The government has announced details of a rescue package for the country's largest banks and building societies in a bid to get financial institutions lending to each other again.

The package could be worth up to £50bn and will see the government receive preferential shares in those companies.

A further £200bn will be made available to provide short-term liquidity while another £250bn will be used to provide security for loans between financial organisations.

The money is initially being made available to the UK's eight largest banks and building societies - Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide, Royal Bank of Scotland and Standard Chartered - but other institutions will also be able to apply for funding.

The move effectively gives the banks unlimited liquidity and should reassure customers about their financial stability.