GORDON BROWN has invited the heads of Britain’s biggest banks to Chequers today as Treasury officials work on the final details of a multi-billion-pound plan to kick-start bank lending.

Marcus Agius, Barclays’ chairman, Mervyn Davies, Standard Chartered’s chairman, and Eric Daniels, Lloyds TSB’s chief executive, are among guests invited to the prime minister’s weekend home. Chris Gibson-Smith, the London Stock Exchange chairman, is also attending, along with City minister Lord Myners and Alistair Darling, the chancellor.

The lunch is taking place alongside detailed negotiations on the new scheme in the Treasury this weekend, co-ordinated by senior civil servant Tom Scholar.

Since the Treasury unveiled its bank rescue in October, it has injected £37 billion into the sector and guaranteed about £100 billion out of a proposed £250 billion of lending under the credit-guarantee scheme.

The next steps to be unveiled within a fortnight are set to include guarantees for businesses of all sizes and official insurance for banks to attach to new securitisations of mortgages and other loans, as recommended by Sir James Crosby, the former banker, in a report last year.

It will involve creating a so-called “bad bank” to take toxic debt off banks’ books, in line with the Paulson plan in America. The car industry will be helped with, among other things, credit assistance for buyers.

Further aid for the banking industry also follows warnings from Britain’s most senior accountants.

In a secret meeting with Myners before Christmas, senior partners from KPMG, Deloitte, Price Waterhouse Coopers and Ernst & Young warned they might not be able to sign off the accounts of Britain’s biggest banks. The auditors were not certain they could state that banks and building societies were “going concerns” under the terms of international accounting rules.

They warned that they might have to add qualifications to the accounts — with the potential to scare both shareholders and savers.

The accountants said they might have to add “emphasis of matter” paragraphs to the accounts, which would draw attention to continuing funding pressures.

The rest of corporate Britain is also concerned about auditors questioning accounts as the reporting season begins. “We want auditors to be extremely robust in their assessments of every company’s accounts,” said Michael McKersie at the Association of British Insurers.

“But we don’t want the auditors to second-guess the macro-economic environment to the extent where they start adding qualifications to company accounts without due cause.”

The government continues to recruit more advisers to help deal with the crisis. Four non-executive directors are this week expected to be appointed to the board of UK Financial Investments, the body set up to manage the taxpayer’s holdings in banks, including Glen Moreno, the chairman of Pearson, the media and education group.

Industry is warning that urgent action is needed. Manufacturers say the sector’s downturn will last for another 18 months and will see sound businesses fail in the absence of government help. The Engineering Employers’ Federation will release its annual manufacturing report this week and warn that output will drop by at least another 5% this year and show no recovery until the second half of 2010.

It follows official figures on Friday showing manufacturing output falling at its fastest rate since the deep industrial recession in 1981 and down more than 7% on a year ago.

The federation will this week urge a six-point plan on the government to save jobs, protect key sectors and preserve supply chains in the wake of the accelerating downturn.

“This year was already going to be challenging for manufacturing, but the combination of the global downturn and continued sclerosis in the financial markets means the downturn will now be longer and deeper than expected,” said Steve Radley, the federation’s chief economist.

“While reductions in interest rates will kick in at some point, we cannot afford to wait. The unprecedented speed of the downturn since last autumn is hampering companies’ ability to adjust and government must put measures in place as a matter of urgency.”

Its proposals include measures to minimise the effect on supply chains if credit insurance is withdrawn or reduced. It also wants the Bank of England to introduce “quantitative easing”, or increasing the money supply, though with caution, as an additional monetary weapon as Bank rate, cut to 1.5% last week, nears zero.

The federation also wants specific measures that include more flexible and generous short-time working allowances to enable manufacturers to keep staff; the restoration of empty-property relief, coupled with a 12-month freeze on business rates; and an increase in the annual investment allowance to £250,000, to ease cash-flow problems.

No 10 refused to comment on the guest list for the Chequers lunch.

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