Chancellor Alistair Darling is today to unveil new protection for savers, to stop a repeat of the Northern Rock debacle.

Under new plans savings up to £50,000 in a single bank will be guaranteed if a bank fails.

The current system of deposit protection came under fire during the Northern Rock crisis – with a lack of confidence leading to the queues outside the Novocastrian mortgage lender.

The existing Financial Services Compensation Scheme (FSCS) covers savings up to £35,000 in each bank. But at the time of the Northern Rock collapse only 100 per cent of the first £2,000 was covered and 90 per cent of savings over that level to £35,000.

Initial figures bandied around for protection had hit as high as £100,000, but Mr Darling is expected to step back from that figure due to pressures from the banks.

Banks have also pushed the chancellor to ensure they would only have to pay into a protection scheme if another bank fails, and not pay into a scheme in advance to set up an emergency fund.

The British Bankers’ Association (BBA) claims doing so now would hit lenders now when liquidity problems mean spare funds are scarce.

Confusion also exists in the current system over weather savings in separate banks are protected if two or more banks collapsed.

The FSCS maintains the current £35,000 protection stands for each account a person holds in different banks, but the rules are unclear and some experts maintain a single claim could be made if more than one bank failed.

New rules are set to come into force in the autumn after a consultation.