LONDON, England (CNN) -- The British government is to guarantee all existing deposits at troubled bank Northern Rock, Treasury Chief Alistair Darling said Monday. Customers line up to withdraw cash from a Northern Rock branch in southeast London Friday. 'People can continue to take their money out of the Northern Rock, but if they choose to leave their money in the bank it will be guaranteed safe and secure,' Darling said at a Downing Street press conference. The announcement came at the end of a day in which the troubled bank had yet again seen customers queue for hours since early morning to withdraw their savings. Shares in Northern Rock fell by 35 percent Monday, erasing more than £600 million ($1.2 billion) from its value. They ended the day at 282.75p, down 155.25p -- and a little over 20 percent of their value seven months ago. The crisis has now seen Northern Rock's market value fall to £1.2 billion since the Bank of England agreed to allow it access to emergency finances last week -- although sources say Northern Rock has not yet drawn on the facility. Shares in Northern Rock fell by 35 percent Monday, erasing more than £600 million from its value. They ended the day at 282.75p, down 155.25p -- and a little over 20 percent of their value seven months ago. The bank made the loan request Thursday because it relies heavily on wholesale money markets for cash, and had been unable to borrow the amounts it required from other banks since the 'credit crunch' in money markets. That was caused in part by U.S. banks making mortgage loans to Americans with poor credit histories. The bank's problems have had a knock-on effect elsewhere in the British banking and home loans sector. Alliance & Leicester today saw its shares fall by more than 30 percent, while Bradford & Bingley saw its shares drop in value by 15 percent. Elsewhere shares in HBOS, parent company to Halifax, which also has a high profile in the mortgage arena, fell five percent. Royal Bank of Scotland and Barclays - each bidding for ABN Amro - were down by four percent and three percent respectively, off reports that the Dutch bank may be about to issue a profits warning. Housebuilders have also been hit with fears of further difficulties in the housing sector. FTSE 250 companies Redrow and Taylor Wimpey shares shed dropped 7 percent and 5 percent respectively. Overall the FTSE 100 Index was down 106.5 points (1.7 percent) to close at 6182.8. Darling said that the problems affecting Northern Rock were part of a wider global picture. 'We know that this is an international problem affecting countries throughout the world, including the United States and here in the United Kingdom. 'Here in Britain, we meet these challenges against a background of a strong economy, one that has grown for over sixty consecutive quarters.' 'In addition, we have historically low inflation which has in turn seen low interest and mortgage rates.' But David Jones, chief market analyst at CMC Markets, told Britain's Press Association ahead of the announcement: 'Today's UK market has once again been about Northern Rock, with the share price of the beleaguered mortgage bank down by more than 30 percent as the rush by savers to withdraw money continues to fuel something of a panic and keep sentiment negative.' By 8 a.m. Monday, dozens of people were queuing outside Northern Rock's branch in Birmingham, repeating scenes seen on Friday and Saturday, Britain's Press Association reported. Don't Miss BoE bails out key mortgage lender Northern Rock shares tumble again Spooked savers empty bank accounts Police were called in some cities on Saturday to steer panicked crowds away as Northern Rock bank branches closed for the day. Customers withdrew $2 billion from the bank on Friday, The Financial Times reported, citing an unidentified person described as close to the situation. Before today's guarantee for existing deposits was announced, Darling and the country's Financial Services Authority tried to assure customers there was no doubt over Northern Rock's solvency. The authority 'has reiterated yet again tonight that it is satisfied that Northern Rock is solvent, can carry on doing business and, crucially, paying out money if people want to withdraw their funds,' Darling told Channel 4. Some press reports have said that Northern Rock is preparing itself for a sell-off. Quoting unidentified sources, the paper said one plan would divide the bank's mortgage portfolio between other major banks in what would be a private-sector rescue of the lender. HSBC - which some analysts believe may be circling for a potential bid - saw its stocks do well today, down less than one percent. E-mail to a friend