More fears over the health of UK banks dragged shares in Royal Bank of Scotland down by another 30% today.

The latest decline came as London's leading share index opened in positive territory after yesterday's 7.8% fall wiped £93 billion from the value of the country's leading shares.

But amid reports that bosses of the UK's major banks met Chancellor Alistair Darling last night to ask for billions of pounds of funding, the sector came under heavy selling pressure, helping to pare back gains to less than 10 points by the end of the first hour of trading.

Royal Bank of Scotland - whose boss reportedly was among those who met Mr Darling, according to the BBC - was the worst casualty, down 41.5p to 106.6p. Lloyds TSB also fell more than 12%, with Barclays down 8%.

Yesterday's dramatic session saw the Footsie slump 391 points, its largest one-day points fall amid evidence the global banking crisis was intensifying across Europe.

The market opened up 120 points thanks to a late rally on Wall Street and a bigger-than-expected cut in Australian interest rates which offered some respite for beleaguered investors.

The Dow Jones Industrial Average was down more than 800 points at one point last night, but recovered in the final 90 minutes of the session to finish down 370 points at 9,955.50 - still its first close below 10,000 since 2004.

RBS's hammering today followed a 20% fall yesterday amid the market carnage. Its rivals also suffered double digit percentage falls during the session.

The BBC's Business Editor Robert Peston said: "Last night the UK's biggest banks - Royal Bank of Scotland, Barclays and Lloyds TSB - signalled to Alistair Darling that they'd like to see the colour of taxpayers money rather quicker than he might have expected.

"According to bankers, these three were disappointed that at a private meeting last night with Darling, held at his request, he didn't present to them a fully elaborated banking rescue plan."

The three banks estimate they may need an extra £15 billion each of new capital, Mr Peston added. He said that RBS boss Sir Fred Goodwin, Barclays' chief John Varley and Lloyds boss Eric Daniels were present at the meeting, along with Bank of England Governor Mervyn King and the new chairman of the Financial Services Authority, Lord Turner.

The Footsie rose initially this morning amid hopes that central banks will react to the crisis by cutting interest rates. This hope was fuelled after Australia lowered its base rate by one percentage point, lifting Asian markets as a result.

The Bank of England's monetary policy committee is due to begin its monthly meeting tomorrow, ahead of a decision at noon on Thursday. Analysts expect the Bank to cut at least a quarter of a percentage point from its base rate.

* Icelandic internet bank Icesave has today stopped UK customers withdrawing or depositing money.

The move follows reports suggesting the group's call centre received unprecedented volumes of calls yesterday as savers worried about the safety of their cash amid the turmoil in the Icelandic financial sector.

It is not known how many UK consumers hold money with Icesave, but it is thought that around 150,000 people in this country have savings with an Icelandic institution, mainly Icesave and Kaupthing Edge, the UK retail arm of Iceland's biggest bank Kaupthing.