RBS and another major British bank, Barclays, categorically denied they had sought capital from the government despite reports that they and Lloyds TSB had urged finance minister Alistair Darling to quickly put in place a rescue plan.

But the second consecutive day of heavy share price falls for RBS, and smaller but still substantial losses for Barclays and Lloyds TSB, could increase the pressure on the British government to step in soon.

RBS was the worst-hit, plummeting by almost 40 per cent to 90 pence although it later recovered to 111.40 pence, a drop of 24.78 per cent, by 1230 GMT.

Lloyds TSB slumped by almost 10 percent before recovering to 241.25 pence, a fall of 6.85 per cent, and Barclays was down 2.79 per cent at 305.25 pence.

RBS denied a BBC report that it had asked Mr Darling for fresh capital in an emergency meeting late on Monday.

'Contrary to press speculation, RBS did not make a request to government for capital,' the bank said in a brief statement to the London Stock Exchange.

Barclays also rejected reports it had asked for money from the government.

Chief executive John Varley told a banking conference Tuesday: 'Contrary to press rumours, Barclays has not requested capital from the government and has no reason to do so.'

Lloyds TSB, which is in the process of taking over its rival HBOS, said it was looking at 'opportunities' to raise capital although it declined to comment on Monday's meeting.

'We're taking a number of actions to reach this target, like paying a full year dividend in shares,' he said.

The BBC said that RBS, Barclays and Lloyds TSB had asked Chancellor of the Exchequer Darling to take moves which would lead to them being re-capitalised, meaning the government would use taxpayers' money to buy into the banks' shares, giving it preferential voting rights.

EU finance ministers meeting in Luxembourg meanwhile agreed Tuesday to support troubled big banks to protect the broader financial system, German Deputy Finance Minister Joerg Asmussen said. -- AFP