The governments of Belgium, Holland and Luxembourg last night unveiled a €11.2 billion (£8.9 billion) joint nationalisation of Fortis as the Benelux banking giant became the first major continental European victim of the global credit crunch.

Yves Leterme, the Prime Minister of Belgium, announced that his Government would invest €4.7 billion to buy 49 per cent of the group’s equity. Luxembourg and the Netherlands are to spend €2.5 billion and €4 billion, respectively, buying 49 per cent stakes in the bank’s units in those countries.

Fortis is also set to sell its stake in ABN Amro — the source of its current troubles — while its chairman, Count Maurice Lippens, is to resign.

Details of the Fortis rescue emerged after talks in Brussels led by Jean-Claude Trichet, the President of the European Central Bank, and involving Dutch and Belgian ministers and the bank company’s board.

Benelux governments are desperate to avoid a panic. The banking and insurance group is Belgium’s largest private sector employer. About half the country’s population bank with it.

News of the bailout came as turmoil continued to grip the banking sector on both sides of the Atlantic. In London, the Government was preparing to nationalise Bradford & Bingley and to sell key parts of it to Santander of Spain. In the United States, Wachovia continued its own hunt for a buyer, with Wells Fargo and Citigroup locked in a bidding war.

The partial nationalisation of Fortis, whose assets are several times bigger than Belgium’s GDP, was announced just hours after BNP Paribas, of France, and ING, of the Netherlands, had pulled back from talks to buy the group. Those discussions had foundered over guarantees that the suitors were seeking from the Benelux governments against possible future losses in Fortis.

BNP, which was reported to have offered €1.60 per Fortis share yesterday, and ING declined to comment.

Fortis, whose origins date from the early 19th century, had almost a quarter of its value wiped from its shares last week amid questions over its solvency.

The group’s problems began with its joint €70 billion takeover of ABN Amro last year with Royal Bank of Scotland and Santander. Since then, Fortis has struggled to raise its €24 billion outlay on the deal.

The group’s shares plunged to €5.18, their lowest level in 15 years, on Friday leaving the group valued at less than half that figure, just over €12 billion.

Fortis, which last week appointed its third chief executive in three months, Filip Dierckx, has also suffered losses of ¤2 billion associated with the US sub-prime mortgage crisis.

Didier Reynders, the Belgian Finance Minister, last night told a press conference: “The important thing is that it’s a Benelux agreement. The governments are directly intervening to take control of the three banks in the three countries. We said that we would not leave any client by the wayside.”

Another senior Belgian politician pledged yesterday that the country’s Government would guarantee all deposits in Fortis. Marianne Thyssen, leader of Belgium’s Christian Democrats, who are in government, said that the step was needed to restore confidence in the battered bank. “The Government is ready to guarantee the full 100 per cent,” she said.

Under Dutch and Belgian law, only the first €20,000 in bank accounts is insured. The pledge came as financial authorities sought to stabilise the wider Benelux financial system.

With €445 billion in assets under management, Fortis is seen as a key part of the eurozone banking system.

There were fresh signs of stress emerging in the currency bloc yesterday. Germany’s Hypo Real Estate was reported to be in talks with the German banking regulator, Bafin, about a financing squeeze.

In the US, executives of Wachovia, America’s fourth-biggest retail bank, are believed to have spent the weekend discussing its possible sale to a shortlist of suitors and in talks with the US Federal Reserve and the Treasury Department. It was unclear whether the bank would be sold as a whole or broken up into several parts.

However, the US Government was resisting pressure to assist bidders by offering to guarantee any part of Wachovia’s assets. The timetable for a sale of Wachovia was unclear and talks were expected to slide into today.

The discussions came as American legislators appeared to have reached consensus on a $700 billion bailout of the US financial sector, which could be approved today.

CAUGHT OUT BY CAMERA

Filip Dierckx, the chief executive of Fortis, was photographed heading into a meeting with Belgian and Dutch ministers yesterday afternoon. The photographer, from Reuters, also captured a document Mr Dierckx was carrying, stating options to rescue the bank.

They included: “Fortis sells its stake in ABN Amro for x billion euros to xx” and “governments of Belgium and Luxembourg to invest xx billion euros in Fortis”.

The document also said that Count Maurice Lippens, the chairman of Fortis, would resign once a deal had been agreed.

Mr Dierckx could perhaps be forgiven for the gaffe. He had replaced Herman Verwilst as chief executive only three days earlier — on Friday, the day that shares in the group plunged 20 per cent.

PORTAIT OF A BANK

- Fortis lost €2 billion because of the US sub-prime mortgage crisis

- The bank group was founded in 1990, but has roots dating back to the early 1800s

- Fortis is the biggest private sector employer in Belgium, where more than 1.5 million households — roughly half the country — bank with the group

- It has a funding base of more than €300 billion from deposits

- Employs 57,000 people

- Earned net profit of €4 billion in 2007

- Fortis has €445 billion in assets under management

- World’s 19th largest financial institution

- Based in Brussels, Belgium, and Utrecht, in the Netherlands, Fortis helped to take over the Dutch bank ABN Amro a year ago with RBS and Santander for more than €70 billion. It has struggled to raise funding for its €24 billion outlay for the deal

- With ABN Amro, Fortis has a presence in more than 50 countries Fortis’s stock market value at the end of last week was €12.3 billion, half of what it is paying for the Dutch bank

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