LONDON, Sept 18: British Prime Minister Gordon Brown defended on Tuesday his government’s decision to intervene to help stop a panicked run on the Northern Rock bank.

In his first comments since the crisis erupted, he said Britain was doing everything to keep the British economy stable and halt panic in the banking industry.

“The decisive action we have taken means that the deposits of Northern Rock customers are guaranteed. It is because of the strength of our economy that we have been able to take these measures,” he said.

The underlying strength of the economy had allowed the government to tackle the crisis at the bank effectively, he added.

“Everything that can be done will be done and is being done to maintain the stability of the economy.”“We are an economy that will continue to grow, continue to create jobs, continue to have low inflation. Everything that has been put in place in the last two days is designed to ensure that.”

And he added: “We are dealing with international events ... The US mortgage problems have spread to Germany, and are now having an effect in Britain, and on Northern Rock.”

Northern Rock ran into difficulties borrowing money in the midst of a worldwide credit squeeze, triggered by a sharp downturn in the US subprime housing sector and a wave of defaults by high-risk US borrowers.

New finance minister Alistair Darling announced on Monday the Bank of England would guarantee all existing deposits in Northern Rock, amid fears the crisis could spread to other banks.

The sense of panic over Northern Rock eased on Tuesday as fewer savers queued to withdraw cash and the share price rebounded slightly following government pledges.

Some customers were nonetheless still unhappy, lining up for a fourth day to take out money from Britain’s fifth-biggest mortgage lender.—AFP