Shares in Royal Bank of Scotland tumbled today as speculation over its funding position deepened during another day of market turmoil.
The bank's stock slumped 40% at one point amid reports boss Sir Fred Goodwin and his rival bosses at Barclays and Lloyds TSB met with Chancellor Alistair Darling last night to discuss a possible capital injection for the sector.
The FTSE 100 Index slid 1%, wiping out a shortlived rally that came after yesterday's 7.8% fall.
RBS, which fell 20% yesterday, was the worst casualty with Lloyds TSB down 16%, and Barclays down nearly 10%.
RBS declined to comment on its share price movement today or the reports of a plea for a Government capital boost.
But the bank confirmed that Sir Fred was part of the team of banking bosses involved in last night's meeting with the Chancellor.
The BBC reported RBS, Barclays, and Lloyds TSB needed around £15 billion of extra capital each.
Barclays denied it had requested a government cash injection. A spokeswoman for Lloyds TSB refused to comment on whether any discussions were taking place with the Government.
"We never comment on any discussions that may or may not have taken place with the Government," she said.
The BBC's Business Editor Robert Peston said: "Last night the UK's biggest banks - Royal Bank of Scotland, Barclays and Lloyds TSB - signalled to Alistair Darling that they'd like to see the colour of taxpayers' money rather quicker than he might have expected.
"According to bankers, these three were disappointed that at a private meeting last night with Darling, held at his request, he didn't present to them a fully elaborated banking rescue plan."
He said that RBS boss Sir Fred Goodwin, Barclays chief John Varley and Lloyds boss Eric Daniels were present at the meeting, along with Bank of England Governor Mervyn King and the new chairman of the Financial Services Authority, Lord Turner.
A spokeswoman for the Treasury declined to comment on last night's meeting.
RBS raised £12 billion of extra capital earlier this year to help cope with multi-billion investment write downs linked to the credit crunch.
Barclays also raised £4.5 billion from existing and new shareholders to help shore up its balance sheet.
Lloyds TSB last month agreed to take over Halifax Bank of Scotland, which has suffered from its own funding problems.
There has been speculation that Mr Darling is considering moves to shore up UK banks with taxpayers' cash, but he did not give any firm commitments when he addressed MPs yesterday.
He said "all practical options must remain open" for dealing with the crisis, but added that it would be "irresponsible" to give a running commentary on plans.
Yesterday the Footsie plunged nearly 8% as the banking crisis intensified across Europe.
London's leading shares started today's trading with some solid gains, but these fell away amid the fresh banking sector woes.
They deepened in Iceland today, where the Government has stepped in to save another of the country's major banks, Landsbanki. Last week ministers were involved in a rescue of rival Glitnir
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