Britain's support for its banks has hit 850 billion pounds in the wake of the global financial crisis, a watchdog report said today, amid tensions over performance pay for senior bankers.
The National Audit Office said Prime Minister Gordon Brown's government was justified to spend the "unprecedented" amount on rescuing the banks, which went into meltdown after the collapse of US investment bank Lehman Brothers in 2007.
"It is difficult to imagine the scale of the consequences for the economy and society if major banks had been allowed to collapse," said NAO head Amyas Morse for the release of the report today.
"The Treasury was justified in using taxpayers' money to safeguard savings and stabilise and restore confidence in the financial system. "But the big question is what all of this will eventually cost the taxpayer. This will take time to answer," he added.
Britain was among countries that spent billions of pounds bailing out leading banks including Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG) during the crisis, while Northern Rock was nationalised outright.
LBG is 43-per cent owned by the taxpayer while RBS, ravaged by the credit crunch and the takeover of Dutch giant ABN Amro at the top of the market, is set to become 84 per cent state-owned after the latest bailout.
