Darling stakes reputation to tell savers: Your cash is safe

In a bid to calm panic and restore stability to the banking system, Alistair Darling pledged that customers would be paid. Asked if his own reputation was on the line, he replied: "It is, I'm afraid, yes."

He also indicated that an autumn general election was now off the cards because of the banking turmoil. And despite Opposition demands to be told exactly when he became aware of the crisis, Mr Darling sidestepped the question during an interview with GMTV.

Referring to investors who are having difficulty withdrawing their savings from branches or online, he said: "I really feel sorry for people who are in queues or having difficulties on the internet. The bank is not used to dealing with these numbers of people.

"But it is important that they remember that if they want to get their money out of the bank, they can do so."

He said investors would get their money back "whatever happens" - implying that the Government will spend whatever it takes to prevent Northern Rock defaulting

His commitment went much further than the official compensation scheme for banking failures which pay out 100 per cent on savings up to £2,000 but only 90 per cent on sums of up to £30,000.

Savers are estimated to have withdrawn up to £3 billion over the weekend which means the scale of the Bank of England's financial support to Northern Rock must be huge.

Mr Darling said no public money was at risk because Northern Rock had only been given credit facilities by the Bank of England, which would in time be repaid, again indicating he was ruling out the possibility of the bank going under.

Mr Darling was asked several times when he first knew about the crisis. He replied that there had been "general concern" since mid-August about the separate crisis in America. He then said that Northern Rock's problems "only really became acute in the middle of last week", again leaving it unclear when the Government was first alerted. Asked if he personally first heard about it last week when the Bank of England bailed out the bank by agreeing to act as "lender of last resort", Mr Darling drew another veil by saying the official financial watchdogs were continually monitoring all institutions.

"It was obvious they were going to have some, er, that they were getting into temporary difficulty," he said.

Commenting on reports of a snap election this autumn, Mr Darling said: "I don't get any sense that people inside government or outside government are anxious for a dash to the polls."

Although the Prime Minister has personally yet to categorically rule out an autumn poll, a string of ministers have been signalling it is off the agenda. Health Secretary Alan Johnson said yesterday: "My instinct is we should get on with the job of governing, there are big issues to tackle."

Gordon Brown and the Chancellor were today meeting US treasury secretary Hank Paulson in Downing Street to discuss the worldwide credit crunch. Although the Northern Rock crisis will not be on the agenda, the Prime Minister is expected to reassure people that their money is safe in British banks and building societies.

Tory leader David Cameron today tried to step up the pressure on the Government by calling for the Chancellor to make a full statement on the crisis.

In a speech in the City, Mr Cameron said it would be "quite wrong" for Parliament to be recalled, "as that would only add to a sense of alarm". He added: "But it is incumbent on the Chancellor to make such a statement and set out the Government's view on these matters and I hope that he will take the opportunity to do so early next week."

Mr Cameron also blamed Mr Brown for the Northern Rock crisis after overseeing a "decade of debt".