Berlin - Chancellor Angela Merkel sought backing Sunday from sceptical Germans for a costly worldwide bank-rescue plan.

In remarks to a Sunday newspaper, Bild am Sonntag, she said, "Only action by the state can restore necessary confidence now."

Before a meeting Sunday in Paris of the 15 eurozone leaders, she said that the intervention had to be internationally coordinated.

"We are not doing this for the sake of the banks but in the interests of the people," she told the Sunday version of the mass- circulation newspaper Bild.

As in the United States, the left in Germany has grumbled at a rescue likely to cost tens of billions of euros, saying it comes only a few years after a reduction in the scale of welfare handouts to the German poor.

Merkel has reiterated her opposition to a joint bail-out by the eurozone, saying each country must deal with its own troubles.

Four of the G7 nations which set out the broad direction of the plan on Friday in Washington will be represented at the 16-nation Paris summit, which will embrace Britain although the British do not use the euro currency.

Merkel has not detailed Berlin's own actions, but sources in Berlin told Deutsche Presse-Agentur dpa they would comprise four elements.

One would be a government guarantee to encourage the German banks to lend one another money. Many were nervously parking money at tiny rates of interest with the central banks at the end of last week rather than lending it where it is needed.

Reviving inter-bank lending would allow credit to resume flowing into the wider economy.

A second part would be copied from the 700-billion-dollar US bailout, with toxic assets at the banks, such as investment certificates based on worthless real estate, being shifted to a so- called bad bank, which would buy the assets with government money.

This part requires the taxpayer to pay for the banks' mistakes.

A third element would be to recapitalize the banks, which have exhausted most of their shareholder funds as they write off vast quantities of worthless debt.

Britain has already made that move, saying last week it will invest at least 50 billion pounds (87 billion dollars) to recapitalize eight or more banks including Barclays and Royal Bank of Scotland Group. The government could sell the stakes again later.

Merkel also committed herself in a statement to parliament on Tuesday to alter accounting rules, as the US Congress has just done, so that tainted assets can be taken off bank balance sheets in all the European Union nations.

The website of the business newspaper Handelsblatt said Berlin was likely to dictate some strict terms to the banks for rescuing them.

The banks would be required to reform their business models and make fundamental changes to executive pay, altering the incentive systems and retirement bonuses that have prompted accusations that bank chiefs are greedy.

Handelsblatt did not identify its sources.

The German legislation is likely to be discussed Monday in cabinet in Berlin before it faces its trial by fire in parliament.

Merkel leads a grand coalition between her own Christian Democrats and the German Social Democrats which can comfortably pass any legislation. The key debates are therefore likely to take place in the two parties' caucuses before the issue is put to vote. (dpa)