The government is set to announce another series of substantial measures aimed at supporting Britain's banks to kick start the economy again.
The government has announced a second package of measures to support the banking system.
The plan includes taking an even larger stake in the Royal Bank of Scotland (RBS) and a new insurance scheme to protect banks from future bad loans.
The long list of measures includes a scheme to offer insurance against banks losing more money from the toxic debt that started the credit crunch.
Its aim is to free up banks to resume lending to companies and consumers.
The banks will have to pay for the insurance, but the government says it does not expect to be paid in shares.
In October, the Treasury ploughed £37bn into the banking system to provide a platform for normal lending to resume.
The Treasury will also be buying up to £50bn of safer assets from banks, which will include mortgage debt.
BBC business correspondent Joe Lynam said the £37bn bail-out was to save the banks, but the latest plan is to save the economy from a deep and prolonged recession.
Chancellor Alistair Darling is said to want to ease the terms of its original bail-out in which it took preference shares in some of the banks.
These government-owned preference shares mean the banks concerned are committed to paying out a dividend on them.
Some could now be exchanged for ordinary shares, and if the swap is agreed, it could increase the government's stake in RBS to 70%, and in the Lloyds Banking Group to over 50%.
It would also free up credit which the banks could then pass onto customers.
Underwriting loans
The Treasury is also likely to establish an insurance scheme to guarantee banks' future toxic debts.
The new state-controlled insurance company would provide cover in the event of bank customers defaulting on their loans.
We as taxpayers will be insuring some of the bad loans made by our biggest banks, to limit their future losses from their reckless lending Robert Peston, BBC business editor Robert Peston's blogSend us your comments
It would allow banks to pay a fee to have their bad loans underwritten by the taxpayer up to a certain level.
In addition, the fully-nationalised Northern Rock will be encouraged to provide home loans again, reversing its current role as a savings bank.
Speaking in Egypt, at a summit on the Gaza crisis, on Sunday, Mr Brown said the government wanted "the resumption of lending".
BBC business editor Robert Peston says the moves are designed to avert a further loss of confidence ahead of gloomy results expected from the big banks.
"It'll be designed to give banks and their investors a bit more certainty about the losses they'd face as the recession undermines the ability of many borrowers to repay their debts.
"We as taxpayers will be insuring some of the bad loans made by our biggest banks, to limit their future losses from their reckless lending," he said.
The government is expected to announce the new measures on Monday morning, followed by a press conference with the prime minister and his chancellor.
It comes as forecasters predict unemployment will soar to 3.4 million as the financial crisis deepens.
The Ernst & Young Item Club says the number of those out of work in the UK will pass 3.25 million by the end of 2010, and hit 3.4 million in 2011.
