Firms in Kent and Medway will be given a lift by the Government's injection of up to £37 bn of taxpayers' cash into banks - the regional minister for the South East has said.

Jonathan Shaw, MP for Chatham and Aylesford, was speaking after the Government said it would be putting the cash into the Royal Bank of Scotland, Lloyds TSB and HBOS.

As part of the deal the banks will bump up mortgage and small-business lending to 2007 levels.

Mr Shaw said he welcomed the development.

He said: "I think we need to ensure that our banks are able to lend to businesses, in Kent, small and medium sized businesses are a dominant feature of the economy.

"And we are seeing people struggling to get mortgages, so commitments from banks will help the housing market. We are seeing the housing market stop, and first time buyers are absolutely key to resolving this.

"The package we have put together is a blue print for the developed world, we need to ensure today that what we have said about the banks passing on money actually happens.

"These are unprecedented times which call for Government action. We can't see our measures in isolation, that's why Alistair Darling and Gordon Brown have been involved on an international level."

In answer to some commentators' view that this was a humiliation for the banks, Mr Shaw said: "I'm not going to join the chorus of derision.

"Clearly the banks have to look at themselves. They now have an opportunity to work with the Government. We have to have a banking system - it is the foundation stone of the way the economy operates."