UK Government is ready to Nationalise Royal Bank of Scotland and HBOS,

Treasury officials said last night that the UK Government is ready to take majority stakes in troubled British banks, such as Royal Bank of Scotland and HBOS, amid fears that the £500bn bailout announced last week had failed to restore confidence. In an unprecedent step in British banking, the Treasury said it would also put representatives on the boards of the banks involved.On Friday shares in both RBS and HBOS crashed to new lows as investors sold out on fears the recapitalisation plan will not work. But the Government's latest move is clearly an attempt to put a floor under the banks, in effect guaranteeing their survival. The news came as the International Monetary Fund warned that the world is on the "brink of systemic meltdown". The IMF chief, Dominique Strauss-Kahn, said in Washington, after talks with President George Bush and the G7 finance ministers, that the world's leading nations had failed to restore confidence over bank solvency. "Intensifying solvency concerns... have pushed the global financial system to the brink of systemic meltdown," he said.The extraordinary warning came as EU leaders prepared to meet in Paris again today to work on even tougher measures to stave off a deepening of the financial crisis. One suggestion on the table is to close stock markets temporarily. The French President, Nicolas Sarkozy, who has called for today's crisis meeting with Gordon Brown, Angela Merkel and Silvio Berlusconi and other leaders, is determined to work on more co-ordinated action, such as adopting the British-style rescue plan for Europe's biggest banks. Mr Sarkozy has called the meeting even though the EU was due to meet in Brussels on Wednesday, as he is determined to get a more harmonious outcome than last weekend's talks, which ended in disarray after Germany acted unilaterally to protect savings in its banks.Although the UK is not part of the eurozone, Mr Brown will be central to the talks and is pushing for European leaders to emulate the £500bn UK government bailout. The plan includes allowing eight banks to participate in a £50bn recapitalisation plan and guaranteeing borrowing between banks.