America’s banking crisis reached new levels of hysteria yesterday as police ordered angry customers of IndyMac, a Californian bank on the brink of collapse, to remain calm or face arrest.

Police waded in to quell unrest among anxious IndyMac depositors as they queued outside the bank’s San Fernando Valley branch in a desperate attempt to withdraw their money.

The scenes reflected the growing panic that Americans are feeling over the safety of their savings, as every day brings a further dose of dire news about the deepening housing slump and the worsening outlook for US financial industries.

After the US Treasury moved at the weekend to throw an emergency $15 billion (£7.5 billion) funding lifeline to Fannie Mae and Freddie Mac, the stricken giants that underpin a vast slice of American mortgage lending, fears that the US economic turmoil is entering a dangerous new phase also spilled over into London’s stock market, sending shares plunging again.

More than £30 billion was wiped off the value of Britain’s biggest companies as the FTSE 100 index of bluechip shares tumbled by another 128.5 points, or 2.4 per cent.

Yesterday’s close at 5,171.9 marked the lowest ebb for London’s stock market since October 2005, after leading shares earlier fell even further, touching lows not seen since the aftermath of the 7/7 terrorist attacks on the capital.

The steep losses came as investors took flight from shares amid anxieties that severe fallout from US financial upheavals will hit British banks and financial companies. Investors have now seen the FTSE plummet by more than a fifth over the past 12 months — and about £375 billion erased from the value of Britain’s bluechip shares over that period.

As economic jitters gripped America, Ben Bernanke, the chairman of the powerful US central bank, the Federal Reserve, emphasised that the United States is beset by threats to its prosperity.

Mr Bernanke told the US Congress that the danger of still higher inflation in America was growing even as the peril over a severe downturn mounted. “The possibility of higher energy prices, tighter credit conditions, and a still-deeper contraction in housing markets, all represent significant downside risks to the outlook for growth,” he said. “At the same, upside risks to the inflation outlook have intensified lately.”

But Mr Bernanke joined Henry Paulson, the US Treasury Secretary, in trying to soothe fears over the deepening financial fallout from America’s housing market slump for both banks and consumers. The fate of the housing market was “the most critical and central issue that we face”, he said.

His comments came as world markets’ worries over the US outlook sent the dollar falling sharply again on foreign exchanges, to record lows against the euro. However, shares on Wall Street rose as investors took some heart as oil prices sank by almost $7 a barrel as markets bet that a US slowdown will hit demand for crude.

Mr Paulson also moved to try to prop-up the plunging shares in Fannie Mae and Freddie Mac, by insisting that the US Government would move in to buy stock in the crucial mortgage guarantee companies only if this was vital to keeping them afloat.

Shares in the two companies have continued to tumble after the US Treasury said that it was ready to inject billions of dollars of taxpayers’ funds to save them, but that this would be backed by a new issue of shares that it would then hold. Such a move would “dilute” the shares left to existing investors, severely cutting the value of their stakes in Fannie and Freddie. However, Mr Paulson said that there were “no immediate plans” for the $15 billion lifeline thrown to the two groups to be taken up, or for the new shares to be issued.

His comments came as shares in Fannie and Freddie dived further as one ratings agency that benchmarks the companies’ financial strength downgraded their assessment. Fannie shares fell by as much as 30 per cent yesterday and Freddie’s by 34 per cent, before rebounding slightly to stand 15 per cent and 15.5 per cent lower, respectively, by early afternoon.

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