The Government is to launch its biggest retail bank rescue on Monday, according to reports.

The four largest banks HBOS, Royal Bank of Scotland, Lloyds TSB and Barclays, are to ask for a combined £35 billion lifeline, a newspaper has reported.

The unprecedented move would make the government the biggest shareholder in at least two banks, HBOS and Royal Bank of Scotland, the newspaper said.

It did not name its source.

No government officials or representatives from the four banks were immediately available to comment on the report.

British Finance Minister Alistair Darling, attending a G7 finance ministers' meeting in Washington, said the government was to give more details early this week about its already announced £400 billion banking rescue plan.

The report also said the scale of the fund-raising could lead to trading at the London Stock Exchange being suspended to give the market time to digest the impact.

The newspaper said Royal Bank of Scotland, which has seen its market value fall to below £12 billion, was to ask ministers to underwrite a £15 billion cash call.

It said HBOS, Britain's biggest provider of mortgages, was seeking up to £10 billion.

Lloyds TSB, in the process of acquiring HBOS in a rescue merger, wanted £7 billion, and Barclays needed £3 billion.

A government source said the government could end up with seats on the boards of major retail banks.

The newspaper said the bank rescue could leave the government owning 70 per cent of HBOS and 50 per cent of Royal Bank of Scotland, and as a result it could take board seats at both banks and exercise control over future dividend payments.

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