The FTSE was down 81.50 to 6527.90 with Northern Rock the worst of the bunch falling 8.61% to 186.90.
The beleaguered bank announced today it had taken a total of £16bn from the Bank of England to help it through the crisis while chairman Matt Ridley resigned this afternoon.
Resolution took the top spot up 15.00 to 722.00 on news of a second takeover bid from Pearl which was rejected late this afternoon.
Barratt Developments also performed strongly up 1.29% to 667.00 and Scottish & Newcastle rose 1.19% again on takeover speculation.
The US market is down on news Wachovia has become the latest bank to warn about future trouble to come from loan defaults. The Dow Jones fell 174 points to 13,714 while the Nasdaq was down by 34 at 2,764.
There was also bad news from earth moving equipment manufacturer Caterpillar which cut its full year profit forecasts as a result of the poorly performing housing sector.IFAonline
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First mentioned in Cridland Report