Sept. 22 (Bloomberg) -- The U.K. government may guarantee as much as 100,000 pounds ($202,000) of people's bank deposits as it seeks to avoid a repeat of the run on Northern Rock Plc, Chancellor of the Exchequer Alistair Darling said.

Such a guarantee would effectively triple current U.K. savings protection. The system may be modeled on the U.S. bank deposit insurance program, Darling said. A U.K. Treasury spokesman confirmed comments Darling made to the London-based Times newspaper.

Customers withdrew an estimated 2 billion pounds in savings from Northern Rock in the three days after the Bank of England said Sept. 14 it would provide the mortgage lender with emergency funding. The panic ended when the government agreed to guarantee all deposits at the Newcastle-based bank, prompting widespread calls for an overhaul of how Britain protects depositors.

``There are clear issues the regulators need to look at,'' Angela Knight, chief executive of the British Bankers Association said in an interview with Sky News today. ``I want to see confidence back,'' she said.

A new program would be funded by a levy on banks and other financial institutions, Darling said. Deposits held in a collapsed bank would be moved to a special vehicle and paid to savers in several days. The government hasn't decided how much money it would insure per individual, though Darling said 100,000 pounds was possible.

`Feel Reassured'

``We need people to feel reassured that if something happens they can get their money almost immediately,'' John McFall, chairman of the parliamentary committee that scrutinizes Darling and the Treasury, told British Broadcasting Corp. television in an interview today.

The ability of banks to hold investments off their balance sheets may be restricted as part of a move toward greater transparency, Darling said. Two German lenders had to be bailed out in July and August after being unable to refinance investments held in units off their balance sheets.

Changes to the Bank of England's lender-of-last resort system may be made, Darling said, so that other banks wouldn't be put off from seeking assistance because of Northern Rock's experience.

Northern Rock's shares fell as much as 73 percent after the Bank of England said it would provide the company with unspecified financing. The lender has borrowed about 3 billion pounds from the central bank, the Financial Times reported today, citing the Bank of England balance sheet in the week to Sept. 20.

3 Billion Pounds

Northern Rock on Sept. 17 issued 5 billion pounds of mortgage-backed bonds that could be used as collateral for loans from the central bank.

Darling, who will tomorrow address delegates at the ruling Labour Party's annual conference in Bournemouth, southern England, declined to say whether he would recommend Bank of England Governor Mervyn King for a second term next year.

The Chancellor said he plans to outline his banking proposals to the House of Commons when it meets in October.

Prime Minister Gordon Brown's standing hasn't been diminished by the Northern Rock events, according to a poll published today. The Labour party had support from 39 percent of those polled by YouGov Plc, ahead of the Conservatives on 33 percent, the Daily Telegraph reported.

Brown

The three-day run on Northern Rock has threatened to erode Brown's reputation for economic competence. As Chancellor of the Exchequer, Brown presided over the longest period of growth in two centuries, driven by a 10-year housing boom.

Darling said he will ask regulators to focus on banks' access to liquidity as well as their solvency, and to look at banks that post exceptionally good profits as well as those doing badly.

To contact the reporter on this story: Sebastian Boyd in London on sboyd9@bloomberg.net

Last Updated: September 22, 2007 12:24 EDT