Bail-out bid put into action
Three of Britain's biggest banks have been thrown a lifeline by the Government as part of a £37bn rescue.
The Royal Bank of Scotland could get up to £20m of funding while a further £17bn is to go into HBOS and Lloyds TSB whose merger is being renegotiated.
The Government could end up with a stake of about 40% in the merged firm and own about 60% of RBS. Barclays is planning to raise £6.5m from investors.
Deal essential, says Brown
Gordon Brown has declared that the Government would be the "rock of stability" amid the financial turmoil.
The Prime Minister told a Downing Street news conference that the action taken by the Government is "unprecedented but essential".
"In extraordinary times, with financial markets ceasing to work, the Government cannot just leave people on their own to be buffeted about," he said.
RBS boss Goodwin resigns
The head of the Royal Bank of Scotland has announced he is standing down as the bank received a £20bn bail-out.
Sir Fred, who has led RBS for nine years, will be replaced after a "short" handover period by Stephen Hester, chief executive of British Land.
Ministers said there would be no boardroom bonuses paid this year at RBS or the merged Lloyds-HBOS in which the Government has taken major shares.
Bank lending rates 'high'
The fresh billions thrown at the financial system by the Treasury and Bank of England have shown few signs of thawing frozen money markets.
The overnight lending rate between banks fell from 5.81% to 5.6%, but still stands more than 1% above the Bank's official 4.5% rate.
The three-month interbank rate - key for pricing mortgages - fell back only marginally from 6.29% to 6.27%.
FTSE 100 enjoys boost
Relief over unprecedented bank rescue plans across the UK and Europe have sparked a rally in stock markets.
The FTSE 100 Index, which fell nearly 9% on Friday at the end of the worst week since 1987, gained 3% to move above the 4,000-point barrier.
Indices across Europe also recovered some lost ground after nations agreed a raft of emergency measures designed to ease the credit crunch.
Iceland exchange shut
Iceland has suspended trading on its stock exchange for the third consecutive working day, citing "unusual market conditions."
The decision follows a turbulent week with the government taking control of the country's three major banks.
Its troubles are having repercussions in the UK where private savers and councils have accounts worth millions of pounds with banks in Iceland.
'Sustained downturn' fear
The banking crisis has heightened the risk of a severe UK recession, a Bank of England rate-setter warned.
Monetary Policy Committee member Andrew Sentance said it is "more likely than not" the UK would fall into recession in the second half of 2008.
But the risks of a "sustained downturn" for the economy similar to recessions of the mid-1970s, early 1980s and early 1990s have increased, he said.
Clegg warning over 9/11
The global financial crisis may turn out to be an "economic 9/11", Liberal Democrat leader Nick Clegg has said.
Speaking to the Institute for Public Policy Research, he warned extremists may find sympathy among groups who feel victims of "economic injustice".
He said: "We do not yet know, when the dust settles, where the power will lie. The financial collapse we are caught in may prove to be an economic 9/11."
£37bn bail-out
Royal Bank of Scotland is to raise £20bn of new capital through a Government-guaranteed £15bn share issue and a £5bn Government cash injection.
RBS's under-fire boss Sir Fred Goodwin, who asked investors for £12bn earlier this year to help shore up the group's balance sheet, is to step down.
Sir Fred is to be replaced by Stephen Hester, who is currently the chief executive of British Land.
RBS chairman Sir Tom McKillop is also to step down next April.
RBS shares plunged 61% in value last week, but the £20bn of new funds will make it "one of the best capitalised banks in the world", Sir Tom said.
If no outside investors take any of the £15bn in new shares, the Government will own them and have a 57% stake in the bank. The Government is appointing three directors to the RBS board.
Lloyds TSB is to raise £5.5bn of new capital and is revising the terms of its acquisition of rival HBOS.
The combined HBOS and Lloyds TSB entity is expected to be about 40% Government-owned once the merger is complete. The Government is appointing two directors to the Lloyds TSB board.
The Government already controls two significant mortgage lenders - Northern Rock and Bradford & Bingley.
HBOS will raise £11.5bn of additional capital, including £3bn through preference shares with the Government.
Barclays said it is not turning to the Government for emergency funding, instead unveiling plans to raise more than £6.5bn from investors to help shore up its balance sheet.
The high street bank also said it will not pay a final dividend for 2008, saving the group £2bn.
As well as the £37bn bail-out, the Government has pledged to review the remuneration of senior executives.
This will be both for 2008, when ministers expect no cash bonuses to be paid to board members, and for long-term incentive schemes.
The Government will also be able to have a say on the appointment of any new independent non-executive directors and on dividend policy.
Banks have been told to commit to offer competitively-priced lending to homeowners and to small businesses.
They will also be expected to offer support for schemes to help people struggling with mortgage payments to stay in their homes.
HSBC is not involved in the Government's bail-out as it has already announced separate capital-raising measures to boost its UK operation.
The bail-out comes after EU leaders signed up to to Gordon Brown's blueprint for recovery.
An emergency summit in Paris pledged to guarantee lending between banks, and to step in with state funding to prevent major institutions collapsing.
The US came on board with similar action over the weekend after Mr Brown and Chancellor Alistair Darling set out their proposals last week.
Lords to vote over 42 days
The Government has pledged to press ahead with plans for 42-day terror detention despite claims that the measure is already "dead".
The House of Lords is set to reject the controversial extension by an overwhelming margin, with many Labour bankbenchers also voicing opposition.
The Home Office said the Government is determined to give police the "powers they need to tackle terrorism".
Troops 'should leave Iraq'
British troops should leave Iraq because they are no longer needed to maintain security in the south of the country, the Iraqi PM has said.
Nouri Maliki said it was time for UK combat forces to go home, though there might still be a need for their experience in training.
Mr Maliki said the two countries should now be focused on improving business, scientific and educational links.
Miliband condemns Mugabe
The Foreign Secretary has condemned moves by Robert Mugabe to take control of key ministries in defiance of a power-sharing deal with opponents.
David Miliband said the European Union would "play no part in supporting a power grab" by the country's president.
He said he hoped South Africa's former president Thabo Mbeki could mediate a solution that will allow opposition groups to share power with Mr Mugabe.
Youths remanded over murder
Three teenagers have been remanded in custody accused of killing 16-year-old Ben Kinsella in north London.
Ben, the brother of former EastEnders actress Brooke Kinsella, was stabbed to death in York Way, Islington, after a night out in nearby Shillibeers bar.
Juress Kika, 18, Michael Alleyne, 18, and Jade Braithwaite, 19, all from Islington, denied the charges at the Old Bailey and face trial on April 21.
Police clothes man jailed
A Derbyshire man who had his conviction for murder overturned after spending 27 years in jail has been fined £437 for wearing police clothing in public.
Stephen Downing, 52, was convicted by Buxton magistrates of trying to buy shandy dressed in an ex-police issue jacket, dark trousers and black boots.
His conviction for bludgeoning typist Wendy Sewell to death with a pickaxe handle was quashed in 2002.
Tributes to crash victim
Tributes have been paid to a pedestrian who died after two stolen cars collided and hit a block of flats in Bedford.
David Gaylor, 25, was walking home after a night out when he was fatally injured as the cars hit the flats on London Road, a few miles from his home.
Neighbours described Mr Gaylor as a "decent young man" who was "always polite". Six people have been arrested over the incident.
Prince 'snubbed' Dr Who
The Prince of Wales turned down an offer to star in science fiction hit Doctor Who, its producer has revealed.
Executive producer Russell T Davies told 2,000 fans at the Cheltenham Literary Festival the Prince snubbed his invitation to star in the BBC show.
Joined on stage by actor John Barrowman, who plays Captain Jack Harkness, Mr Davies OBE called the Prince a "miserable swine".