ALISTAIR DARLING has been working this weekend on the final details of a Treasury plan to kick-start bank lending and stem the economy’s slide into recession.

The chancellor is said by aides to be close to finalising a proposed loan guarantee scheme.

Lord Myners, the City minister, and Tom Scholar, a senior Treasury official, have been coordinating the work in Whitehall.

Myners and Darling will today join Gordon Brown at Chequers for informal talks over lunch with banking industry leaders.

An aide to Darling said he would be returning to the Treasury after the lunch to continue planning the proposed loan guarantee scheme.

Senior officials refused to put a figure on the size of the scheme insisting that this was still under discussion. However, the Treasury is expecting that up to a third of all the loans underwritten under the scheme will default.

The guarantee scheme is one of a number of proposals the government expects to announce in the coming weeks to demonstrate that it is taking action to head off a deep recession.

The prime minister will hold a jobs summit tomorrow, attended by business and union leaders. Help for the car industry is expected over the next few days.

Officials say that the measures being taken, in combination with big cuts in interest rates by the Bank of England, will lift the economy out of recession in time.

Europe’s central bank is set to cut its interest rate from 2.75% to 2.25% this week, easing the pressure on the continent’s recession-hit economies. Inflation is coming down sharply in most economies.

Projections to be published this week suggest that domestic heating oil bills in Britain should stay low this year.

The Oil Firing Technical Association (Oftec) predicts heating oil will average 38p a litre this year, well down on the 60p level of last summer.

Times Recommends

• Shrinking violet Gordon turns into raging bull
• Eddie Izzard: 'I keep thinking if I do all these things she'll come back'
• Is sex for the disabled the last taboo?