Insurance firm AIG have reported a loss of £43bn in the final three months of last year - the largest ever-quarterly loss in corporate history.

AIG has so far received $150bn in financial support from the US Government and the troubled insurer will receive another $30bn to tide it over.

The Federal Reserve and the Treasury have said that they have bailed out AIG as it poses a genuine risk to the financial system.

"The potential cost to the economy and the taxpayer of government inaction would be extremely high. The additional resources will help stabilise the company, and in doing so help to stabilise the financial system," said a spokesperson for the US government.

AIG provides insurance protection to individuals, small firms, municipalities, personal pension plans and major US listed companies.