The British government has launched a 50 billion pound emergency rescue plan for major British banks in a bid to stem the financial market meltdown and revive investor confidence.

The radical plan, announced by prime minister Gordon Brown, also envisages part nationalisation of eight major British banks.

Under the plan, the treasury would be invest up to 50 billion pounds in exchange for preference shares in eight of the country's largest banks - Abbey National PLC, Barclay's PLC, HSBC, HBOS, Lloyds TSB Bank, Royal Bank of Scotland and Standard and Chartered Bank as also the Nationwide building society.

''Our stability and restructuring programme is comprehensive, it is specific and it breaks new ground. This is not a time for conventional thinking or outdated dogma but for the fresh and innovative intervention that gets to the heart of the problem," Brown said.

Chancellor of Exchequer Alistair Darling said the scheme would see taxpayers' money used to buy stakes in major banks rather than give it away.

The rescue plan comes a day after bank stocks plunged on investor fears that they wont be able to get through the global financial meltdown without help.

The Bank of England also announced that it will also make available 200-billion pounds in short term loans and issue 250-billion pounds to guarantee loans between banks.