Newspaper round-up

LONDON (Reuters) - Here are the business headlines from Friday's newspapers.

Financial Times

FSA BOLSTERS PROTECTION FOR SAVERS

The Financial Services Authority has strengthened investor confidence by altering the rules of the deposit protection scheme. The initiative will allow building societies that merge to keep their separate compensation limits. The new rules, which will operate until September 2009, are expected to cut the amount of withdrawals made from merged building societies by customers who fear that their combined investment goes beyond the maximum deposit protection limit. Adrian Coles, director-general of the Building Societies Association, described the move as sensible while the British Bankers' Association welcomed the changes, saying it approved any action that improved protection for savers and bolstered confidence in financial services.

BROWN PROMISES TO RESTORE FLOW OF MORTGAGE LENDING

Gordon Brown has vowed to help the ailing construction industry by restoring the flow of mortgage lending. Chairing a meeting with representatives of the housing and building sectors, the Prime Minister underlined the damage being suffered by the industry and acknowledged the need for "proper funding" from the banks. He added: "We are trying to encourage the mortgage industry back into business. The flow of money is not how it should be and that is affecting confidence." A credit guarantee scheme is currently being considered by ministers, in a bid to free up lending to homeowners and small businesses.

COURT TAX RULING THREATENS TREASURY

The UK Government faces the threat of paying multi-billion pound payouts to companies after a landmark ruling by the High Court on the taxation of foreign dividends. Following a claim made by British American Tobacco (BATS.L), the court decided that the Treasury's system of tax relief for dividends paid to the UK from EU-based companies breached European legislation. The tobacco company said the judgement could lead to the recovery of 1.2 billion pounds, subject to future review by European Courts. However, experts stressed that the closure of the case would probably require the passing of several more years.

BA EXECUTIVE ON PRICE-FIX CHARGE IS PROMOTED