The New Nation - Internet Edition

Agency, Berlin

A top German bank is on the brink of collapse after a 35bn euro ($48bn; £27.2bn) rescue plan collapsed.

Germany's second-largest commercial property lender, Hypo Real Estate, said a banking consortium had withdrawn their support for the deal.

Correspondents say its failure will put further strain on financial institutions in other countries.

The news came after EU leaders at a Paris summit refused to commit to a US-style rescue plan for banks.

Hypo Real Estate, which has large amounts of bad debt, has suffered from the credit squeeze in international markets.

The bank said a consortium of German financial institutions involved in a government-led rescue plan pulled out of the negotiations after refusing to come up with nearly 35bn euros ($50bn; £28bn) for a bail-out.

The reasons why the consortium pulled out are unclear but a Hypo Real Estate spokesman said the property lender was fighting for its survival.

Some analysts are saying the bank will not last more than a few days without a rescue package, so action must be taken before the markets open on Monday.

Another meeting of government representatives and private bankers is expected to take place on Sunday.

Correspondents say if Hypo Real Estate does collapse it could plunge already volatile markets even further into debt.

It has to be indicated to the marketst that European countries will not react as every man for himself Dominique Strauss-Kahn, IMF head

News of the failed plan came as leaders of the major European economies met in the French capital for talks hosted by President Nicolas Sarkozy.

Britain, Germany, Italy and France all agreed to work together to support financial institutions but did not agree to set up a big rescue fund similar to that of the US.

They decided instead to seek a relaxation of the EU rules governing the amount of money individual states can borrow.

The leaders also issued a joint call for a G8 summit "as soon as possible" to review the rules governing financial markets.

Mr Sarkozy announced a series of other measures - including unspecified action against the executives of failed banks.

Speaking after the meeting at a joint news conference, he said the four had agreed that the leaders of a financial institution that had to be rescued should be "sanctioned".