The UK government's bail-out and part-nationalisation of the banks has hit a snag with the £17 billion merger between Lloyds TSB and HBOS.  The merger must go ahead and both institutions are in favour, says the prime minister.

Gordon Brown told the BBC's Politics Show both institutions now want the proposed merger, which has been brought about by the crisis in banking.

Under the plan, £17bn would be put into HBOS and Lloyds TSB, meaning taxpayers would own about 40% of the merged institutions.

The SNP and Liberal Democrats have questioned if the deal should go ahead.

They have called for clarification over the bail-out, arguing that it may still be possible to preserve HBOS, while the Conservatives have branded the deal "necessary but expensive".

But Mr Brown said: "We have one offer, which is the Lloyds TSB, it protects the maintenance of the Halifax Bank of Scotland, in merger with Lloyds TSB and if people have another offer then obviously we'll look at it.

"But that's the only offer on the table."

One thing for sure is that the banking crisis calls into question the SNP's confidence in Scotland's financial industry.  The two leading banks - RSB and HBOS - will come out of this mess being largely owned by the government in London.  While non-Scottish ownership is not in itself a problem, ownership by the UK government is.  It's a thorny issue for Mr Salmond and one that is not going to go away easily.