(Corrects day of week in first paragraph)

By Sumeet Desai

LONDON, Dec 12 (Reuters) - Kleinmond, South Africa, is where the world's top central bankers last month first gave shape to Wednesday's unprecedented shot in the arm for money markets gripped by fear and panic ahead of the holidays.

In what is the probably the biggest ever joint central bank operation, the Federal Reserve joined with the European Central Bank and others to announce measures to get funds flowing freely through financial markets.

Central banking sources told Reuters the idea came into being when top policymakers gathered in the seaside town of Kleinmond for the Group of Twenty meeting on the weekend of Nov. 17-18. G10 central bankers then got togther in Cape Town on Nov. 19.

People had been talking about such a plan even before then -- money markets have been in a rut with little light in sight since August -- but there the principals were able to talk through more of the details.

Heads of the various central banks involved -- the Fed, the ECB, the Bank of England, the Bank of Canada, and the Swiss National Bank -- were in further contact last week, the sources said. The Bank of Japan also offered its support.

"It all came together last Friday," said one G7 source. With the ECB representing France, Germany and Italy, and the Bank of Japan also being involved, this was a coordinated G7 operation between the central banks as much as anything.