London  - Staff employed at the British subsidiary of US bank Lehman Brothers face the prospect of not being paid this week, administrators PricewaterhouseCoopers (PWC) said Monday.

The US bank's main operation in Britain, where 4,500 people work, was placed into administration shortly after its US parent filed for bankruptcy protection.

PWC partner Tony Lomas said at a news conference in London that picking over the firm's business in Britain was an "extraordinarily complex" task and would take a "significant" amount of time. Staff numbers would be downsized.

Lomas indicated that the forthcoming wage bill was 42 million pounds (75 million dollars).

"The administration is a period of stress and distress for the people. We started the day with no certainty that we would have cash available to make payment due at the end of this week. We still don't know what the position is."

Lehman Brothers' London headquarters had received fresh cash for its operations from New York on a daily basis, Lomas explained.

Lomas said he was "amazed that a business as huge as this can fail." To him, the events underlined the importance of business confidence which, once lost, could not be regained.

His comments came after a day of tumbling share prices on the London stock market, where big banks bore the brunt of the shock news from Wall Street.

Shares in Halifax Bank of Scotland (HBOS), Britain's biggest mortgage lender, fell by up to 30 per cent Monday, followed by Barclays losses of 16 per cent and a drop of around 12 per cent for Royal Bank of Scotland (RBS).

The Bank of England, in step with the European Central Bank, injected an extra 5 billion pounds (8.97 billion dollars) into money markets.

The central bank said the extra funds were almost five times oversubscribed by banks, which put in bids totalling 24.1 billion pounds, in a sign of the renewed pressures on the financial system.

PWC said it was working to "wind down the business in as orderly a manner as possible."

Lomas said Lehman Brothers' London operation "found itself unable to meet its obligations when the flow of funds dried up last night."

Employees clearing their desks at headquarters in London's Canary Wharf district Monday said they were told by internal e-mail that the bank had filed for bankruptcy.

"It's just shock, total shock. We really thought someone would buy Lehman because it has such a strong franchise," said research worker Duo Ai, despatched to London from New York.

Earlier Monday, Britain's Barclays Bank, which had been one of the front-runners in efforts to rescue Lehman Brothers, said it had considered a merger but decided that a bid would not have been in the interest of shareholders.

"We confirm that Barclays considered a combination with Lehman Brothers and did not proceed because it was not possible to conclude a transaction in the best interests of Barclays shareholders," Barclays said in a statement.

The news from Wall Street sent shock waves through Britain's banking sector, which has been jittery ever since the collapse of mortgage lender Northern Rock a year ago, and its nationalization earlier this year.

"The whole of the international financial system is at risk," Vince Cable, an economist and financial affairs spokesman for Britain's Liberal Democratic Party said Monday.

After the demise of Lehman Brothers, the "whole of the financial sector simply cannot return to where it was before," Cable said.

But Angela Knight, chief executive of the British Bankers' Association, took a more relaxed view.

She described Lehman Brothers as a "relatively small player" in Britain and said no British bank was in a similar situation, as leading banks had been "recapitalizing themselves" over the past few months.

"Whilst it's not going to be a particularly comfortable day, the issue is one of a major US investment bank which has got into difficulty. No UK bank is in a similar situation," she said. (dpa)