Gordon Brown emerged from a meeting with the heads of Britain’s biggest banks on Tuesday saying he “welcomed” the opportunity to discuss the urgent action needed to unblock the money markets to ease the effect of the credit crisis on the economy.

The prime minister met the chief executives of Barclays, HBOS, HSBC and Royal Bank of Scotland, as well as leading investment bankers from the City of London. The talks focused on possible solutions to the credit squeeze that has led to a sharp rise in financial instability.