German bank rescue bid collapses

Germany's second largest commercial property lender said a €35bn rescue plan for the company had fallen apart after private lenders withdrew support.

Hypo Real Estate Holding said it would seek to stay in business through "alternative measures", but did not say what those might be.

The company said it was "in the process of determining the consequences" of the rescue plan's failure, according to a statement.

Hypo was the first German blue chip firm to seek a government rescue after running into trouble in mid-September as credit froze on international markets.

The plan - approved on Thursday by the EU - would have entailed the German government injecting €26.35bn and a "liquidity line to be provided by a consortium of several financial institutions", the company said.

"The consortium has now declined to provide the line," it said, without identifying the banks in the consortium. The government had said last week that none was foreign.

The German government had no immediate comment on the plan's collapse. A spokeswoman for German financial regulator BaFin also declined to comment.