Final details of the biggest American state intervention since the 1930s were agreed last night as the credit crisis claimed its latest UK victim, with Bradford & Bingley set to be broken up and parts nationalised.

Details of the $700bn (£381bn) bailout of Wall Street emerged after Chancellor Alistair Darling made the drastic B&B move following the failure of efforts to secure a wholesale takeover of the ailing bank.

Now the bank's £20bn of retail deposits and 197 branches will be taken over by Santander, with the firm's £41.3bn mortgage book likely to be nationalised.

The US proposal, which aims to avoid a "long and painful recession", which analysts believe would wreak further economic misery in the UK, came in a bill made public by Congress after key Democratic and Republican negotiators reached a late-night deal.

Several conditions and restrictions have been added to the proposal made by US Treasury Secretary Hank Paulson last weekend, following delicate negotiations on Capitol Hill.

Under the new plan, $250bn (£136bn) would be available immediately for the US Treasury's use and restrictions would be placed on the compensation of executives at companies that sell mortgage assets to the Treasury. An oversight board would also be created.

An important bargain, vital to attracting support from centrist Democrats and Republicans who are fiscal hawks concerned about the growing federal budget deficit, was struck that will require the government to submit a plan to the US Congress after five years on how to recoup any losses.

Officials in both parties are hopeful that the bill will be put up for a vote tooday, and both Republican presidential hopeful John McCain and his Democratic rival Barack Obama have said that they will probably support the package when it comes up for a vote later in the Senate.

In the UK, top-level talks between B&B and the tripartite authority - the Treasury, the Financial Services Authority and the Bank of England - continued into the night with a view to making a formal announcement before stock markets opened this morning.

The UK Government plan will now be to put B&B and its loan book temporarily in Treasury hands to enable Santander - owner of Abbey and shortly Alliance & Leicester - and other potential bidders such as Barclays and HSBC more time to decide on deals.

One option involves passing B&B's loans, which include £41bn of home mortgages, on to Northern Rock to manage.

However, one analyst described such a move as placing the country's "banking rubbish" in one place to create a "British manure bank".

Private sector rivals are reluctant to take over B&B's mortgage book as more than 80% of it is high risk buy-to-let and self-certified loans, which have a far higher chance of defaulting.

Whatever the fine print, it was clear last night that B&B, a stalwart of the High Street which could trace its roots back to the 1850s, was set to disappear and become the latest victim of the credit crunch.