HOWZAT

However, Santander said it would be business as usual in the B&B branches and all three brands would continue to be used for the time being.

Santander is taking over the employment of 1,400 of B&B's staff in the branches, boosting its UK workforce to 23,500. The remaining head office and call centre staff will become government employees, though their long-term employment prospects remain uncertain.

The deal will make Santander one of the biggest players in UK savings, with around 10 per cent of the UK market and 24 million customers, including B&B's 2.7 million depositors.

The purchase price includes the transfer of £208 million of capital relating to offshore companies. However, Santander will be a net cash gainer after receiving £4 billion from the Government as part of the deal terms.

A spokesman for Santander said today: "There's no guarantee of jobs. But this deal is not predicated on job losses and branch closures."

The three brands — Abbey, A & L and B&B — will be kept separate and customers will not be able to use the branches interchangeably. However, in the long run, Santander looks likely to integrate them more fully and reduce them to a single brand.

Antonio Horta-Osoria, chief executive of Abbey, said: "This is good news for B&B savings customers. They can be certain that their hard-earned savings are with a bank they can trust."

Santander is one of the biggest banks in Europe and has emerged from the credit crunch relatively unscathed so far. Founded in 1857, it has more than 60 million customers in 40 countries. As a result of the Abbey purchase, which it paid for with its shares, it is also one of the most widely held shares in Britain.

B&B spent yesterday in talks with the Treasury, Financial Services Authority and Bank of England – and a series of bidders. The Times understands that, at one point, serious consideration was given to an offer from HBOS, which is being taken over by LloydsTSB.

Gordon Brown met Mr Darling in No 10 on Saturday morning to approve the B&B nationalisation. Treasury officials worked all weekend on the deal. The Bank of England has apparently been gathering information on B&B for several weeks and had planned a firesale of the assets.

The nationalisation was criticised by Conservatives, whose party conference began in Birmingham last night, but they will not stand in the way when it comes before the Commons.

In the US, congressional leaders reached an outline agreement on a $700 billion (£387 billion) bank bailout after days of often bitter negotiations.

One major obstacle to the deal — opposition from Republicans in the House of Representatives — appeared to have receded. After a three-hour meeting, John Boehner, the leader of the House of Representatives, said the plan was a "giant improvement", adding: "We have made it pretty clear to our members that we are supporting the bill."

Even as the deal edged closer, another big US bank teetered on the brink. Wachovia, the country’s sixth largest, risks collapse unless it can find a buyer.

In Europe, Fortis, which employs 85,000 in Europe, was at the centre of a three-country partial nationalisation after BNP Paribas pulled out of talks. The Belgian, Dutch and Luxemburg governments invested €12 billion (€9.5 billion) in the banking and insurance group last night, taking a 49 per cent stake.

The US rescue plan could be signed into law by President Bush this week. After marathon negotiations between Henry Paulson, the Treasury Secretary, and leading Republicans and Democrats, a tentative deal was struck. The details were posted online and will be voted on by the House of Representatives as early as today and by the Senate later this week. Both John McCain and Barack Obama said that they would almost certainly back the deal, despite its unpopularity with voters, because the risks of inaction were too great.

The deal would give Mr Paulson $350 billion to start buying toxic mortgage-related assets immediately, with the remaining $350 billion to be approved by Congress. There would be curbs on executive pay and severance packages, a taxpayer stake in the plan, the ability for the Government to renegotiate loans for struggling homeowners and strict oversight.

Warren Buffett, the respected investor, had warned many of those involved that, without a rescue package, the entire US economy could collapse.

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