Oct. 4 (Bloomberg) -- Hypo Real Estate Holding AG, the ailing German property lender, said a 35 billion-euro ($49 billion) government-backed bailout plan collapsed as commercial banks withdrew their support.

``The intended rescue package involved a liquidity line to be provided by a consortium of several financial institutions,'' Hypo Real Estate said in a statement on the DBF newswire today. ``The consortium has now declined to provide the line. The group is now in the process of determining the consequences of this'' and ``alternative measures are being investigated.''

Munich-based Hypo Real Estate sought the lifeline after its Depfa Bank Plc unit, which lends to governments, failed to get short-term funding amid the credit crunch. The bailout would relieve the company of having to tap money markets for the ``foreseeable future,'' Chief Executive Officer Georg Funke said Sept. 29.

The European Commission, the executive arm of the European Union, yesterday approved the rescue. The European Central Bank and the Bundesbank were supposed to contribute 20 billion euros, and a group of unidentified banks, 15 billion euros. The plan called for Hypo Real Estate to use 42 billion euros in assets, mostly debt owed by government borrowers, as collateral.

Heiner Herkenhoff, a spokesman for the German BDB banking association, declined via e-mail to comment.

`Difficult Situation'

``The bank is in a very difficult situation,'' Hypo Real Estate spokesman Hans Obermeier said in a telephone interview. ``We hope everyone involved in the discussions is aware of this.''

Hypo Real Estate's financing needs exceeded the bailout plan guarantee, Germany's Die Welt reported earlier today, citing unnamed people in the finance industry. It will need 20 billion euros by the end of next week and 50 billion euros by the end of the year, according to the newspaper. As much as 100 billion euros may be needed to shore up the bank's finances by the end of 2009, Die Welt said.

The global financial crisis that prompted Lehman Brothers Holding Inc.'s Sept. 15 bankruptcy filing is weighing on Europe. Belgian authorities are exploring ``all methods'' to keep Fortis in business even after it received an 11.2 billion-euro government bailout on Sept. 28. Belgium and France on Sept. 30 threw Dexia SA a 6.4 billion-euro lifeline.

To contact the reporter on this story: Hellmuth Tromm in Berlin at htromm@bloomberg.net

Last Updated: October 4, 2008 15:56 EDT