There were calls today for the UK Government to follow Ireland's lead and guarantee all savers' deposits during the current banking crisis.

There were calls today for the UK Government to follow Ireland's lead and guarantee all savers' deposits during the current banking crisis.

Shares in Irish institutions like Anglo Irish Bank soared as much as 66% today after Irish Finance Minister Brian Lenihan announced a 400-billion euro (£315 billion) state guarantee of all deposits in the country's indigenous financial firms.

It came the day after the Irish Stock Exchange suffered its greatest fall in history - 13% - and rumours spread that millionaire depositors were withdrawing their savings from Irish institutions.

With UK banks suffering hefty falls on the London Stock Exchange amid the turmoil, Liberal Democrat leader Nick Clegg led calls for the Government to issue a temporary guarantee for all savers' deposits in the British banking system. They totalled £891.6 billion at the end of June, according to the Bank of England.

He said: "We are now in the eye of an economic storm.

"The financial system urgently requires some breathing space. British people need total reassurance that their savings are safe.

"The Liberal Democrats will support the Government in issuing a blanket guarantee for all deposits in the British banking system."

The Financial Services Consumer Panel, an independent body set up to represent consumers by City watchdog the Financial Services Authority, also called for an unlimited guarantee.

Chairman David Lipsey said: "That Irish depositors in a failing institution should be better compensated than their British counterparts is a national disgrace.

"We would like to see unlimited compensation. If consumers knew they would get their money back they would have no incentive to rush around risking a run on their bank."

In the UK, deposits up to a maximum of £35,000 with a single bank are currently fully protected. The Treasury recently estimated that limit covered approximately 97% of all UK depositors.

David Kuo, Head of Personal Finance at money website Fool.co.uk, said: "The Irish government has done the right thing to stand behind its financial institutions.

"To restrict compensation to just £35,000 while claiming that the banking system is robust is confusing for consumers. If UK banks are completely robust then Chancellor Darling must back them completely."

The Financial Services Authority recently proposed that the limit be extended to £50,000 under looming bank reform legislation, a move the Tories have agreed to back.

The Irish Government's unlimited guarantee on deposits at six banks came the day after the Irish Stock Exchange suffered its greatest fall in history - 26% - and rumours spread that millionaire depositors were withdrawing their savings from Irish institutions.

It applies to Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society.

Mr Lenihan said there would be an approximate 400-billion euro liability to Irish taxpayers but charges and strict terms and conditions applying to the agreement would safeguard their interests.

"I do not see any hazard or exposure to the taxpayer from the decision I have arrived at," he explained.

"Were liquidity to dry up in the Irish banking system in the weeks ahead, the inevitable result would be economic catastrophe for this country."

Kevin McConnell, an analyst at Bloxham Stockbrokers, said Ireland was now the safest place in Europe for global depositors to store funds. "This could act as a blueprint for a lot of countries across Europe in how they fix the credit crisis," he said.

Consumers who want to take advantage of the increased protection offered by the Irish government can do so through Irish banks that operate in the UK.

Bank of Ireland has operations over here, and it also owns Bristol & West and backs the Post Office savings accounts, meaning savings with these institutions are also covered by the scheme.

Anglo Irish Bank also has UK operations and is currently offering some particularly competitive rates, including a seven-day notice account paying returns of 6.55%, which is at the top of the best buy tables, as well as an easy access account with a rate of 6.4%.

But consumers were reminded that the increased protection offered by the Irish government was only relevant to them if they had more than £35,000 current guarantee with a single UK banking group.

Michelle Slade, of financial information group Moneyfacts.co.uk, said: "The first thing that consumers should look at is the rate that they are getting. It is very unlikely that a bank would be allowed to fail.

"But for those people who are looking for increased protection, Anglo Irish Bank has good rates."