Government to do "whatever is required" in crisis

LONDON (Reuters) - The government is determined to do whatever is necessary to maintain the stability of its financial system, Chancellor Alistair Darling said on Tuesday after meeting with central bank Governor Mervyn King.

The Treasury said Darling would make a statement on financial stability to parliament when it returns from its summer break next Monday to update legislators on recent developments and set the tone for legislation to be taken.

King met Prime Minister Gordon Brown and Darling to discuss the economy and financial situation a day after U.S. lawmakers rejected a $700 billion (388 billion pound) bailout for the financial sector, driving Wall Street's largest ever one-day points decline.

"The governor of the Bank of England, myself and the Financial Services Authority, we will do whatever is required to maintain stability and to protect the interests of depositors," Darling told reporters.

"We are absolutely determined to do that," he said.

Britain has nationalised two banks -- Northern Rock and Bradford & Bingley -- this year after they were hit by the credit crunch. Brown has often said the government would do whatever it takes to maintain stability and protect savers.

King holds regular meetings with Brown and Darling to talk about the financial crisis.

"We're obviously keeping in close touch. There are meetings between the governor of the Bank and the regulator, the Financial Services Authority, as well," said Treasury minister Yvette Cooper.

"That's been the case continually and will continue to be the case. We obviously need to monitor events very closely. We're disappointed really with the events in the U.S., the fact that they didn't get a deal," Cooper told Sky News.