Although times will continue to be tough, we’re not heading towards a 1930s-type depression, according to MP Derek Wyatt.

He thinks it will be at least two weeks before governments and banks around the world have a clear idea how bad things are – but that we should not expect an economic meltdown like the one that followed the Wall Street Crash in 1929.

Mr Wyatt said: “It is now a matter of confidence, but just as it looks as though we have reached the bottom of the trough, an Icelandic, Danish or German bank goes belly up, so it may be another two weeks before we know – but who actually knows?

“Longer term we may have to look again at joining the Euro.

“We need to tighten the regulations and will probably need a new Finance Act once the crisis has passed. We have made more credit available through the Bank of England as inter-bank loans have almost stopped.

“This is the key. We need to make retail high-street banking come back to the high street with a bank manager.”

Conservative parliamentary spokesman for Sittingbourne and Sheppey Gordon Henderson said: “Personally, I think we have a long way to go before we see the worst of the crisis, and it is the human aspect of the worsening situation that really worries me.

“They are wrong. While this crisis started in a banking system that few people truly understand, its impact will be felt by real people with real problems.

“This is a national emergency to which we need a national solution, which is why I am pleased that David Cameron has announced he will work with Gordon Brown to bring forward solutions, including increasing protection for savers and ensuring they can be paid out rapidly, and passing new banking legislation to give the Bank of England powers to deal with failing banks.”