Gordon Brown has called on the banks to keep lending to small businesses despite the global credit crunch.

The Prime Minister welcomed a commitment by the European Investment Bank to make £4 billion available to provide finance to firms in the UK.

Following talks in Downing Street with German Chancellor Angela Merkel, Mr Brown said it was now up to the banks in Britain to honour their commitments.

"We must continue to encourage banks to lend. Having re-capitalised the banks we must ensure that the money is used to sustain credit lines on normal terms to solvent businesses," he said.

"I urge banks not to change the terms and charges for existing lending to small and medium sized enterprises."

The Prime Minister said the wider economic problems could only be dealt with through concerted international action.

He said it was now essential that the International Monetary Fund played a central role in preventing the crisis spreading to countries like Hungary and Ukraine.

"This is a global problem that requires a global solution. No country, no matter how big, can solve these problems on their own," he said.

Mr Brown said that he and Ms Merkel - who also visited the Queen - had agreed on the need for global action on the financial crisis.

EU leaders meeting in Brussels on November 7, will aim to finalise a coordinated message to take to the global leaders' crisis summit called by US President George Bush for November 15, in Washington.

Both he and Ms Merkel wanted action in the coming days to prevent the spread of financial "contagion" from Eastern Europe countries, said the Prime Minister.

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