As Germany sought to calm the public with a "decisive" pledge about savings property lender Hypo Real Estate (HRE) came under pressure Monday from other banks and Berlin to sack its chief executive after HRE needed a vast bail-out.

Questions about the German government assurance of an estimated 1 trillion euros (1.4 trillion dollars) of personal savings at German banks meanwhile were being raised on Monday. Neighbouring nations came under pressure to follow Germany's lead.

Berlin described the assurance to savers, issued by Chancellor Angela Merkel in two sentences in front of television cameras on Sunday, as "able to be relied on."

"We are saying to women and men savers that their deposits are safe. The federal government promises that," Merkel said.

Berlin has not announced any legislation on a deposit-insurance scheme beyond existing bank-industry guarantees. Officials said they were still talking to banks on how to shape the guarantee.

Merkel's spokesman Ulrich Wilhelm said in Berlin, "It's a political statement that can be relied on and is decisive." The German government and its capabilities stood behind this assurance, he added.

Jonathan Todd, spokesman for European Competition Commissioner Neelie Kroes, said: "We were informed by the German authorities of their intentions.

"The commission notes that the measures seem to be limited to retail bank deposits, and so less liable to give rise to distortions of competition."

Todd added, "In general, retail deposit guarantee schemes for savers can be an appropriate policy response to fears regarding the stability of the banking system."

The crisis reached Germany with the stumble by Hypo Real Estate (HRE), a Munich-based company that lends to commercial developers and municipalities to build hotels, offices, roads, airports and the like.

Germany was embarrassed when a 35-billion-euro bail-out a week ago proved inadequate. On Sunday a new, 50-billion-euro rescue was announced but industry sources said it had not yet been signed by banks and the government on Monday.

A sticking point appeared to be demands that HRE chief executive Georg Funke resign. HRE declined comment.

The other banks were reportedly angry that they were not told a week ago that HRE's problems were so grave.

German Finance Minister Peer Steinbrueck said it was "unthinkable" to keep dealing with the same HRE top management.

He charged that HRE, at the same time as seeking state aid, had used lawyers against the government so as to "escape its responsibilities."

In Monday trading, HRE stock declined as much as 40 per cent from Friday's close as investors worried that the new bail-out might also prove inadequate.

In Brussels, the EU Commission's Todd, said, "As soon as the details are notified to us we will assess very quickly whether the new measures are compatible with (the EU's) state aid rules."

A newspaper, Die Welt, was to appear Tuesday with a report that HRE was blaming its plunge from grace on a downgrading by ratings agencies that allowed creditors to call up loans.

Berlin has refused demands by the banking industry to nationalize HRE, a lender seen in Germany as too important to let fail.

Steinbrueck said financial securities that have been disdained in the past by central banks would be used as security for much of the 15-billion-euro expansion of the HRE bail-out.

The European Central Bank (ECB) had agreed to this, he said.

"Nobody can forecast just yet how much this paper is actually worth," he added.

The government and banking-industry guarantee that backstops the new bail-out remains limited to 35 billion euros, as announced one week ago.