London - The British government has expressed its concern to Ireland over its decision to offer blanket guarantees on savings held by the six leading banks in the Irish Republic.

Reports Thursday said that Britain's Chancellor of the Exchequer, Alistair Darling, had spoken twice on the telephone with Irish Finance Minister Brian Lenihan, amid fears that the move was causing an exodus of funds from Britain.

As the Irish government sought to rush legislation through the Dail (parliament) to protect its banks, sources in London said that Lenihan had been told "in no uncertain terms that the scheme was a problem for the UK."

Lenihan told Darling that the decision to safeguard all deposits at six banks had not been planned, but had been an emergency move to prevent the collapse of one Irish bank, in turn leading to the failure of another.

The Irish guarantee scheme covered six domestic institutions - Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life & Permanent, Irish Nationwide Building Society and Education Building Society - to the tune of 400 billion euros (560 billion dollars).

Darling's intervention came amid signs that savers were rushing to open accounts at Irish-backed banks, including the Post Office in Britain, whose accounts are provided by Bank of Ireland.

Darling had urged his Irish counterpart to make the scheme open to British banks operating in the Irish Republic, the reports said.

The Bank of Ireland was reported as saying that there had been a "steady stream" of savers contacting banks to transfer funds, especially from the British province of Northern Ireland.

A Bank of Ireland spokeswoman said there was growing evidence British savers were moving cash to the bank.

She said the bank was seeing a "very, very steady" increase in people contacting its call centres from Northern Ireland and the pattern was thought to be the same across Britain.

Anglo Irish Bank, which offers a telephone-based savings account in Britain, experienced one of its busiest days ever. Allied Irish Bank said it had been similarly deluged, leading to concerns that the savings market was being unfairly distorted by the Irish move.

Apart from putting direct pressure on Britain to extend its own scheme of savings' guarantees in a highly nervous environment, the Irish measure has been criticized as a "unilateral" step by the European Union (EU) Commission which is examining the scheme under competition rules.

Britain has said it will extend coverage per deposit to 50,000 pounds next week. (dpa)