"The intended rescue package involved a liquidity line to be provided by a consortium of several financial institutions," the company said in a statement released Saturday. "The consortium has now declined to provide the line."

It was not known if the government, which planned to inject nearly euro27 billion (US$37.4 billion), would raise its stake in the bailout package.

Under the terms of the original bailout, a consortium of German banks were to provide a line of liquidity worth some euro10 billion (US$13.8 billion). Those banks were never identified, but the government said all were German.

"The consortium has now declined to provide the line," Hypo said in a statement.

Hypo was the first German blue chip to seek a government rescue after running into trouble in mid-September as credit froze on international markets after its Dublin-based unit Depfa Bank PLC failed to attract needed short-term funding amid the widening credit crunch.

German media reported that the consortium apparently got cold feet after an examination of Hypo showed that losses could be as much as euro50 billion (US$69.2 billion) by the end of 2008.

The emergency meeting came a day after Europe's four major economic powers called for tighter regulation in a bid to stop the fiscal bleeding wrought by turmoil on Wall Street _ though Germany, France, Britain and Italy shied away from advocating a massive bailout akin to that in the United States, where Congress approved a US$700 billion (euro506 billion) plan last week.

The EU's failure during the past week to pull together on dealing with the crisis has caused worry. Both Ireland and Greece angered their EU neighbors by acting independently and guaranteeing to protect all savings.

European states have pumped billions of euros into banks to keep them afloat over the last week, trying to assure savers their money was safe and avert a panic that has frozen lending across the world.

Banks from Iceland to Germany to the Nordic nations have felt the sting of the meltdown since Lehman Brothers Holdings Inc. filed for bankruptcy last month.



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