The Government will be the “rock of stability” amid the global financial turbulence, Gordon Brown said today following the injection of £37 billion into Britain’s troubled banks.

Addressing journalists at a Downing Street news conference with Chancellor Alistair Darling, the PM said that the action the Government was taking was “unprecedented but essential”. Later, in a speech at the Reuters’ building in Canary Wharf, Mr Brown said that inaction would have constituted a “failure of leadership”.

The Government is taking a £20 billion stake in Royal Bank of Scotland with a further £17 billion for Lloyds TSB once it is merged with HBOS.

Mr Brown said “excessive and sometimes undisclosed risk-taking” by financial institutions led to the current crisis. He said that with financial markets ceasing to work people should not be left on their own to be buffeted about.

“For savers, for small businesses, and for homeowners, we must in an uncertain and unstable world be the rock of stability on which the British people can depend.”

Banks receiving state funding would not be able to give board members any cash bonuses this year, he confirmed.

The Government has secured “strong commitments” that the banks will restore lending at competitive rates to individuals and small businesses. Ministers will appoint independent non-executive directors to the boards of those banks receiving state capital injections.

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