EUROPEAN leaders raced against the clock yesterday to clinch a rescue strategy for banks battered by the worst financial crisis since the 1930s, under intense pressure to throw them a lifeline before world markets reopen.

At a summit in Paris, the focus fixed firmly on how much state money governments could mobilize to buy into banks if needed, and if they would also underwrite lending between banks, a practice paralyzed for now by fear and distrust.

French President Nicolas Sarkozy told reporters the meeting would come up with an "ambitious and coordinated plan" to tackle the crisis, which spread from the United States more than a year ago but hit fever pitch in recent weeks.

Officials suggested action rather than rhetoric could emerge from a gathering that involved the leaders of Britain and the 15 countries of the euro currency zone, as well as European Central Bank President Jean-Claude Trichet.

"If market confidence is not restored this weekend, it's game over," said Marco Annunziata, chief economist for UniCredit, an Italian bank that is among many whose shares have been hurt in panic-stricken stock markets.

The American Standard & Poor's 500 index tumbled more than 18 percent last week, its worst weekly fall on record. European stocks plunged 22 percent and Tokyo's Nikkei crashed 24 percent.

Money markets are essentially on life support and dependent on regular, massive injections of emergency liquidity from central banks across the globe because banks themselves will not lend to each other as they used to.

The Paris meeting was hastily arranged by Sarkozy on the heels of a G7 summit of rich nations in Washington that offered no concrete, collective action but promised to do whatever was needed to unfreeze credit markets.