An unprecedented £50bn injection to bail out Britain’s ailing banking system could be doubled if it fails to stave off a collapse in the housing market. Sunday Times, Independent on Sunday,Daily Telegraph

Alistair Darling will tell MPs tomorrow that the Bank of England is to allow lenders to swap assets for government-backed bonds in an attempt to restore confidence and ease the effects of the credit crunch.

The initial offer is for £50 billion worth of bonds but senior Treasury sources told The Times today that further cash injections up to a total of £100 billion were possible.

However, they admit that there is no guarantee that the bailout will lead to banks offering cheaper mortgage deals. Mr Darling is also braced for a row over whether the bonds should be counted as government debt.