Alistair Darling, chancellor of the exchequer, has announced that the government will guarantee all deposits of Northern Rock account holders, and any other bank that found itself in a similar position, as ministers sought to calm savers’ fears.

The government’s move, which goes far beyond the current scheme for protecting depositors, came amid signs the crisis of confidence in Northern Rock was spreading to other lenders, with shares of Alliance & Leicester falling 31 per cent on concerns that the bank would be the next to turn to the Bank of England for assistance.