Failures in the implementation of the UK Government’s first bailout plan for the banking industry led directly to the need for the second intervention announced last week by Prime Minister Gordon Brown and Chancellor Alistair Darling, according to senior sources close to the scheme.

Sources familiar with last week's intervention by the British authorities say the handling of the Government's October £37bn (€40bn) bailout of UK banks created an "untenable situation", which reached a head earlier this month.