LONDON, Sept 22: British Finance Minister Alistair Darling has signalled the government is considering raising the limit on depositor money protected by law, Saturday’s Times newspaper reported.

This week Darling pledged to guarantee all existing deposits at Britain’s fifth biggest mortgage lender, Northern Rock, to arrest a run on the bank after thousands of depositors queued withdraw their savings.

“This is a bullet that needs to be bitten,” he told the Times of potentially raising the limit in a story that presented a list of steps Darling was considering but did not directly quote him on specific measures.

Britain now protects up to 31,700 pounds of savers’ money.

The times cited Darling as saying the government had not fixed a figure but it could possibly raise the limit to 100,000 pounds.

Setting such a level would encourage big savers to spread their money around, he said. But Shadow Chancellor Vincent Cable said raising the limit could hit pension funds.

The Liberal Democrat parliamentarian said he supported the “sensible” step, but told Sky News it could trigger an exodus from Britain’s pension funds in favour of bank-based savings.

Britain is already suffering from a so-called pensions crisis, created by the rising costs of an ageing population.

The government’s proposed National Pensions Savings Scheme, expected to be introduced in 2012, aims to encourage around 10 million Britons without workplace pensions to save and help plug a 57 billion pound savings gap. Ministers also want to raise the state retirement age to 68 by 2046.

CALLS FOR REVIEW: Cable also urged the government to review where banks borrow their money from.