Tonight our time, the global financial crisis will see the biggest bailout of a national banking system so far when the UK Government reveals a much leaked 35 billion to 50 billion pound plan to partly nationalise some of the biggest names in finance.

Barclays, Lloyds TSB, HBOS, Royal Bank of Scotland (RBA) are at the top of a list of banks mentioned for specific equity injections from this huge fund (which could top $A120 billion) after the announcement is made.

It will be the first concerted attempt by a national government to provide support to an entire sector. Other governments in Europe in particular have used a piecemeal approach of guaranteeing or backing all bank deposits, all deposits by individuals, or in the case of Spain, guaranteeing deposits and setting up a fund to buy distressed debt from its banks.

The UK banking sector has been badly hit by the credit crunch. Two banks have gone. Northern Rock was nationalised earlier this year and the loans side of Bradford & Bingley was taken over last month. Alliance and Leicester was taken over by Banco Santander of Spain and HBOS was forced into a merger with Lloyds TSB, which remains under pressure because of plunging share prices.

The UK regulators and government have not handled some of the pressures well, and last week’s move by a desperate Irish government to kill off the collapse of its financial sector by guaranteeing all deposits enraged the UK authorities as it started a rush of money to Ireland from Britain.

So the government of Gordon Brown has decided on the biggest gamble of all — to directly invest fresh capital in the banks to convince the markets that they will be supported at all costs.

When news leaked out of the idea, there was turmoil in the financial stocks listed on the London stock exchange. The main index, the FTSE, finished slightly higher after Monday’s record loss, which was no mean achievement, but banks were belted with shares in RBS down 39% after the 20% on Monday and HBOS off 41%. News of the scheme and its details were leaked to London newspapers that are publishing their Wednesday am editions about now. The Times and The Telegraph were good examples.

London analysts say that RBS, Barclays and Lloyds will be the main recipients of the capital. It’s not clear if the huge and well run HSBC will participate in the plan. If it does it would get probably the smallest amount of new money of the lot. It seems the capital will be injected through the government acquiring preferred shares guaranteeing a fixed rate of interest (like Warren Buffet’s injections into Goldman Sachs and General Electric). The capital will be injected into the banks’ so-called Tier one capital, the area of highest quality and the core of any bank’s balance sheet. The position on whether existing shareholders can participate in the issue is not clear.

The Government will make a statement in the House of Commons tonight, our time, detailing the bailout. The UK move overshadowed another day of dramas in Europe, though it wasn’t as frenetic as Sunday of this week, or Monday of last week. But there was enough happening to say that the crisis has deepened.