A last-minute rescue deal has secured the future of one of Germany’s biggest banks, Hypo Real Estate.

The finance sector will grant Hypo Real Estate a further €15 billion (£11.6 billion) in addition to the €35 billion (£27 billion) already offered jointly by the German government and banks.

The original rescue package fell through at the end of last week when banks and insurers refused to back it but weekend negotiations salvaged the deal in time for the opening of the stock markets.

The bank, which is one of Germany’s biggest property lenders and severely affected by bad debts, said the increase became necessary as a result of the “intensification” of the financial crisis during the past week.

The government is providing a guarantee of up to €35 billion, with the rest of the cash being raised from the financial sector.

“We are very grateful for the support of all the parties. This solution ensures that Hypo Real Estate Group is stabilised, will have access to sufficient liquidity even in an ongoing financial crisis, and can continue to operate,” said Georg Funke, chief executive, this morning in Munich.

The group has total assets of €395 billion and 1,900 employees across Europe, the Americas and Asia.

The German government was concerned that the failure of Hypo Real Estate would damage the financial system.

Yesterday, the government appeared to guarantee all savings, as Ireland has already done.

“We say to savers that their deposits are safe,” Chancellor Angela Merkel told a news conference in Berlin.