Chancellor Alistair Darling has described the move to stabilise banks as beneficial to taxpayers.

The Government will today inject £37 billion into three of the UK’s biggest banks in an attempt to prevent a UK banking meltdown.

The cash will bail out The Royal Bank of Scotland, Lloyds TSB and HBOS, making the Government the biggest shareholder in at least two of the banks.

The unprecedented move follows a weekend of negotiations, which were today confirmed by the Treasury.

Under the deal, the banks’ board members will not receive cash bonuses for 2008 and further down the line. The Government will also have the power to appoint directors to their boards of directors.

Over the next three years, the banks are now committed to “maintaining the availability of competitively-priced lending to homeowners and small businesses at 2007 levels”, the Treasury said. They are also required to support schemes to help those struggling with mortgage repayments stay in their homes.

Speaking on BBC Radio 4 this morning, Chancellor Alistair Darling said the move to stabilise banks will benefit taxpayers in the long-term.

He told the BBC: “There is every reason to be confident that, as we go through this, the British taxpayer will get his money back.”

Speaking at a Downing Street news conference, Prime Minister Gordon Brown described the bailout as an “unprecedented but essential” move that was “something that matters for every family and business in Britain.”

“We must, in an uncertain and unstable world, be the rock of stability on which the British people can depend… To let the chips fall where they may would be the height of irresponsibility,” he said.

More information is at: http://hm-treasury.gov.uk

By Natasha Piscitelli