Mortgage giant Northern Rock was yesterday facing the first run on a major bank since the Depression of the 1930s.

Worried savers, many elderly, queued for hours to withdraw their cash from branches across the country, despite constant reassurances that the bank is solvent.

The panic was sparked when Northern Rock, Britain's fifth-biggest mortgage lender, announced that it had agreed an emergency funding package with the Bank of England.

That deal, thought to be the first of its kind since 1970, was the strongest sign yet that British banks would not escape a global credit crunch caused by America's sub-prime home loan crisis.

News of the crisis broke late on Thursday night. By early yesterday morning queues formed outside branches in Glasgow, Edinburgh, Aberdeen, London and the bank's home town of Newcastle.

"What do you do when you read headlines like Northern Wreck'?", said one saver outside a Glasgow branch yesterday. Many customers pulled their life-savings, with some withdrawals said to be well into six figures.

The bank's website was constantly jammed yesterday as its many online customers tried to log on. Eventually the Northern Rock homepage carried an apology, begging clients to be patient.

Panic came despite independent experts stressing that customers had nothing to fear: the Bank of England would not lend to a bank unable to honour its debts.

Stockbrokers, however, echoed public concerns. Northern Rock shares tumbled 32% yesterday, adding to the more than £3bn stripped off the bank's value since its peak in February. Other building societies were hit too. Shares were down 8% at Bradford & Bingley, 7% at Alliance & Leicester and 4% at Halifax Bank of Scotland.

In a clear signal that some in the market expect the credit crisis to hit the house market, major developers such as Persimmon, Taylor Wimpey, Bovis Homes and Berkeley Group saw their shares fall 6% and more.

Northern Rock's 1.5 million savers and 800,000 mortgage borrowers were yesterday urged to stay calm.

A spokesman for the The British Bankers' Association said: "Northern Rock is a sound and safe bank and there is absolutely no reason for either mortgage customers or savers to worry."

The bank still expects to make £500m in profit this year, although that is about £150m less than expected. Experts don't expect it to go bust, but some speculated it might face a takeover bid. HSBC was said to be among potential bidders.

The Bank of England's offer of emergency aid is extremely rare and is the first example since its independence in 1997. Analysts said the undisclosed deal is thought to allow Northern Rock to borrow at 1% above the Bank's base rate.

Chancellor Alistair Darling said the Bank stepped in "to create a stable banking system".

He said: "That is precisely the right action to take when you are faced with the sort of problems we have just now."

Northern Rock chief executive Adam Applegarth, who earned £1.35m in salary and bonuses last year, said his bank had yet to draw on the emergency cash, which he called "a backstop in case we need to use it".

Mr Applegarth said the bank's underlying businesses were solid but it was facing short-term difficulties borrowing. How short-term? "Looking forward," he said, "I can't see when the global liquidity freeze is going to end. We simply don't know."