The IMF warned the world's financial system was near meltdown and France promised that a meeting of European leaders in Paris will detail measures to keep a market panic from triggering the most severe global downturn in decades.

The Sunday Times newspaper said Britain will launch its biggest retail bank rescue on Monday when the four largest, HBOS, Royal Bank of Scotland, Lloyds TSB and Barclays, ask for a combined 35 billion pound ($60.5 billion) lifeline.

The International Monetary Fund said it backed a Group of Seven plan to try to stabilise markets and urged "exceptional vigilance, coordination and readiness to take bold action" to contain a firestorm that pushed global stocks to five-year lows on Friday.

French President Nicolas Sarkozy and German Chancellor Angela Merkel, meeting in France, said they had "prepared a certain number of decisions" to present at a European summit on Sunday to try to restore normal flows in blocked credit markets.

France's Economy Minister, Christine Lagarde, said just before leaving Washington the Sunday gathering would go beyond talking about remedies to "put meat, muscles on the bones of that skeleton and to develop, follow up and execute upon it".

The US appealed for patience but the IMF said time was short after the Group of Seven industrialised nations failed to agree on concrete measures to end the crisis at a meeting on Friday.

"Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," IMF chief Dominique Strauss-Kahn said.

Mr Strauss-Kahn later expressed hope that government actions would prove powerful enough to persuade banks to resume lending and bring an end to a spreading credit crunch.

"In the coming days ... what I expect is that the reaction by the different institutions will be positive enough to unfreeze the different markets and to restore the necessary funding," he said at a news conference.

Source: Reuters