European Leaders Split on Rescue Strategy

"There is a lot of grandstanding," he added. "The French put something forward, and then not. It doesn't look well worked out to me."

A spokesman for British Prime Minister Gordon Brown said in London that Brown had received assurances from the French government that a Europe-wide bailout fund would not be on the agenda Saturday. Brown has not supported the idea of a general bailout even within Britain, moving instead to nationalize troubled institutions on a case-by-case basis.

The European Central Bank in Frankfurt, Germany, announced, meanwhile, that it was keeping interest rates in the eurozone unchanged. The bank president, Jean-Claude Trichet, said bank governors discussed a rate reduction given the scarcity of credit caused by the banking crisis, but decided against it for now. That signal of a possible cut later was followed by a further erosion in the euro's value against the dollar.

The crisis has caused "an exceptionally high level of uncertainty" in financial markets, Trichet said.

Europe's main stock markets sank again Thursday, although less abruptly than early on in the crisis. London's FTSE index was down 1.8 percent, the CAC 40 in Paris was down 2.25 percent and Frankfurt's DAX dipped 2.51 percent.

Ireland's unilateral decision to shore up its banks with a blanket deposit guarantee also created controversy in Europe, on grounds that it would give Irish banks an unfair leg up over rivals based in other parts of the E.U.

Alistair Darling, the British chancellor of the exchequer, or finance minister, made two telephone calls to Irish Finance Minister Brian Lenihan on Wednesday to complain that the move created a problem for Britain, the Guardian newspaper reported.

Digby Jones, Brown's minister for trade and investment, said Britain would not consider such a guarantee of all bank deposits. "It is easy if you have got 3 million population and a smallish economy -- it is a far easier decision to do that than if you are America, for instance, or Britain or Germany," he told BBC Radio. "If you ever guarantee anything, you have got to assume one day you are going to get it called. . . . It would be trillions and trillions of taxpayers' pounds involved."

Britain is planning to take a smaller step, increasing the amount of bank deposits guaranteed by the government. Currently, deposits of up to 35,000 pounds -- about $62,000 -- are backed, but that is set to rise to about $88,000 next week.

The British Bankers' Association complained that the Irish move could cause British depositors to switch to Irish banks. "While we support proposals aimed at reintroducing stability to the financial markets, we need fair play for financial institutions across Europe," the association said in a statement.

The Irish Parliament, after an all-night session, passed the plan into law Thursday, guaranteeing all deposits in six major Irish banks. The plan, which could theoretically cost about $580 billion, covers all commercial and personal deposits, along with bonds, for the next two years.

Newspaper headlines in Britain warned of a "stampede" of British depositors switching to Irish banks. But bank offices in London seemed relatively calm. Allied Irish Bank officials declined to make formal comment, but a bank official who spoke on the condition of anonymity said Allied Irish had seen "some inflows" at its 90 British branches.

One customer, Simon Rabbani, 64, a retired property dealer, said he had come in to switch his life savings from Citibank to Allied Irish. "They said there is a 100 percent guarantee, that's the main reason why I'm here," Rabbani said. "It's not for the coffee."

Sullivan reported from London. Correspondent Craig Whitlock and researcher Shannon Smiley in Berlin contributed to this report.