Mervyn King will be forced defend his reputation as Bank of England governor after being driven into a dramatic U-turn yesterday in a bid to ease pressure on the UK banking system. The Daily Telegraph. The Times. The Independent. The Guardian. Financial Times

The Bank said it would release £10bn to help unblock the key three-month inter-bank lending rate. Until yesterday, King had previously said it was not the Bank's job to free that market and doing so would reward banks for their risky behaviour.

The decision was seen by many as further backtracking by the Bank in its response to the credit crunch and the crisis at Northern Rock.

King will today face an interrogation by MPs over his stewardship of the financial system and his role in the run on Northern Rock.