The British government has floated new measures to rescue insolvent banks quickly following the recent run on the Northern Rock bank.

The Treasury has suggested ensuring quicker payouts than those likely under the existing savers' protection scheme.

One idea floated by the government in its Treasury discussion paper is that a new system of administration should be set up just for insolvent banks, which would mean an administrator could be appointed under special rules to sort out a bank's problems more quickly than would be likely under the present insolvency laws.

Another idea is to raise further the savings sum guaranteed, up from the recently agreed new level of 35,000 pounds (70,000 U.S. dollars).

Chancellor Alistair Darling told the Commons Thursday that he wanted to protect savers money if their bank failed.

"This regime would mean depositors are insulated from a bank that has failed, greater compensation for them and certainly their compensation can be paid out quickly," Darling said.

The Treasury, Bank of England and the Financial Services Authority (FSA) have started formal consultation on ways to improve the British system of protection for savers if their bank goes bust.

The authorities are worried that the recent crisis at the Northern Rock bank could have spilled over into other sections of the financial services industry.

"Recent events have demonstrated the importance of depositor confidence if institutions are to weather periods of financial instability," said the official discussion paper.

"Unless there are robust mechanisms to shore up depositor confidence, the risk of instability can be exacerbated," the paper said.

At the moment, if a bank in Britain went bust, savers might find their money frozen for weeks or even months while insolvency experts tried to rescue it. However, the FSA is already planning to beef up the existing British Financial Services Compensation Scheme so that it has a capacity of just over 4 billion pounds.