Brown seeks support for bank bailout plan

British Prime Minister Gordon Brown, his authority boosted by his handling of the financial crisis, embarked yesterday on a tour of the country to sell a multi-billion-pound bank rescue plan to voters.

Economists and media generally welcomed Mr Brown's audacious plan to pledge hundreds of billions of pounds of taxpayers' money to the rescue plan, calling it a necessary if risky step.

But Mr Brown knows he must overcome widespread scepticism among voters about using public money to bail out bankers, popularly seen as "fat cats" who did well out of the years of plenty.

"I am going round the country in the next two days to explain what we are doing," Mr Brown told reporters. "We have got to put the banking system on a sound footing for the long term."

Yet despite the rescue plan, new ripples from the financial crisis rocked Britain yesterday when at least 45 local councils said they had millions of pounds invested with Icelandic banks that have been taken over by the state.

Mr Brown, a former Finance Minister, has struggled to connect with voters since taking over from Tony Blair 16 months ago.

The severity of the financial crisis, which has forced Mr Brown to nationalise two banks, has surprisingly boosted his political standing after a torrid few months when members of Mr Brown's own Labour Party openly challenged his leadership.

Labour politicians have now closed ranks behind him, helping Labour cut the opposition Conservatives' previous 20-point opinion poll lead in half. But the Conservatives remain on track to win the next general election, due by 2010.

Wyn Grant, politics professor at Warwick University, said Mr Brown had little alternative but to act to help the banks.

"For Brown, it's given him a further boost in self-confidence and for (Finance Minister) Alistair Darling as well. All talk of challenging him for leader is now completely off the page," he said.

But many savers were angry that taxpayers were coming to the rescue of banks that some felt had been lax with their lending.

Building contractor Steve Gallagher, 52, said common sense had flown out of the window during the credit boom. "I have not heard of anybody being jailed or fined for what has happened," he said after Wednesday's announcement.

Seeking to counter voters' reluctance to bail out wealthy bankers, Mr Brown stressed yesterday that, as a condition for receiving aid, a bank would have to agree with the government on how much it paid its executives.

Voicing anger at the behaviour of some banks during the boom, Mr Brown said: "Where there is excessive and irresponsible risk-taking, that has got to be punished."

Mr Brown has brushed aside Conservative charges that he failed to restrain an unhealthy, credit-fuelled expansion during his decade as Finance Minister.