The Group of Seven (G7) leading economies today said they “strongly welcome” the US Government's $700 billion (£379 billion) plan to bailout America’s banking system as cross-party political wrangling continued over the rescue deal.

Finance ministers from the G7 said in a statement: “We pledge to enhance international cooperation to address the ongoing challenges in the global economy and world markets and maintain heightened close co-operation between finance ministries, central banks and regulators.

“We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system.

Today's statement follows calls from Henry Paulson, the US Treasury Secretary who is spearheading the US bailout, that other countries should follow America's example.

He said: "I'm going to be pressing our colleagues around the world to design similar programmes for their banks and institutions. Our system is a global one."

Earlier today, Chancellor Alistair Darling told delegates at the Labour Party conference in Manchester that global governments must work together to stabilise financial markets but stopped short of announcing any US-style bailout.

He said: "Just as one government alone cannot combat global terrorism, just as one government alone cannot deal with climate change, one government alone cannot deal with the impact of globalisation.”

Mr Darling and Gordon Brown, the Prime Minister, are set to fly directly to New York from the conference to discuss tighter regulation of the financial industry with US officials.

Mr Darling said: "In the next few weeks Gordon and I will be in the US and in Europe and speaking to finance ministers around the world to put in place measures to help prevent the mistakes and misjudgments, which caused the crisis."

Shares in London have been volatile today after Friday's record rally as the US rescue plan emerged. The FTSE 100 index of leading shares fell by 36.06 points to 5,274.24 by late afternoon trading.

Last week, the US Government unveiled a $700 billion plan to restore confidence in the US banking system by pooling together billions of dollars worth of toxic mortgage-backed assets and placing them in a separate vehicle.

In the US, trading almost wiped out the Dow Jones’ rally of nearly 400 points on Friday. Leading US shares closed down 372.75 points to 11,015.69 as concerns mounted that a law to secure the bailout of the US banking system will not be passed on Wednesday, as many investors had hoped.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax