A DRAMATIC £400bn rescue package for Britain’s ailing banks – including the part- nationalisation of all the big High Street names – was widely seen as the last throw of the dice to beat the credit crunch last night.

The unprecedented bail-out, which was quickly followed by a surprise half-point cut in interest rates, won backing from the opposition parties – but failed to halt the London stock market slump.

Gordon Brown said Britain now “led the world” by buying stakes in banks to keep them afloat, rebuild their balance sheets and kick-start frozen interbank lending markets at the heart of the crisis.

And he signalled that the era of boardroom fat cats was over, with the banks only eligible for the cash injection if they accepted tough new restrictions on sky-high pay and bonuses.

Hours after the package was unveiled at 7.30am, following all-night talks at the Treasury, the Bank of England slashed the interest rate to 4.5%, matched by central banks in the US, Europe and Canada.

The cut will bring a £47-a- month saving on a £150,000 mortgage, if the reduction is passed on in full by lenders – with economists quick to predict further reductions to come. However, the day’s unprecedented events failed to dispel the gloom engulfing the markets, following an Interna- tional Monetary Fund warn- ing that it was only a step in the right direction.

In a hard-hitting report, the IMF warned the global econ- omy was facing its most dangerous crisis for 70 years – and that even more momen- tous action may be needed.

Some left-wing MPs said the package didn’t go far enough, criticising the Treasury for failing to take controlling vot- ing rights on boards of banks.