Prime Minister Gordon Brown is holding talks with Bank of England Governor Mervyn King on proposals to stabilise the banking system.
Chancellor Alistair Darling and the chairman of the Financial Services Authority, Lord Turner, are also taking part in the discussion.
Downing Street denied it was an "emergency meeting", adding that it would focus on "ongoing action".
Any announcements would be made in a "calm and orderly way", it said.
Share falls
US President George Bush called Mr Brown earlier - as well as the leaders of France Taro Aso elected as Japanese PM ...
Chavez set to meet Spanish king ...
Belgian PM 'to offer resignation' ... and Italy - to underline the need for cooperation, the White House said.
Banking shares fell in London amid news that bank bosses had met Mr Darling on Monday to discuss fundraising.
Royal Bank of Scotland fell 34%, HBOS dropped 22%, Lloyds TSB was down 10% and Barclays fell 9%.
The banks have called on Mr Darling to make a proposal to help restore liquidity, BBC business editor Robert Peston said.
Meanwhile, customers of the Icesave internet bank have been warned they will probably have to claim compensation for money held in their savings accounts.
UK authorities are preparing for the bank's parent in Iceland, Landsbanki, to be declared insolvent.
A Downing Street spokesman declined to comment on whether there would be any House of Commons statement about the meeting.
There was no mention of the talks at the lobby briefing for journalists earlier on Tuesday.
BBC political correspondent James Landale said: "Clearly things are moving. The question is 'how fast?'"
Monday's meeting was attended by Mr Darling, Mr King and Lord Turner, as well as representatives of RBS, Barclays and Lloyds TSB.
The Treasury is understood to have been formulating a plan that would allow the government to provide extra funding to the banks in exchange for stakes in them.
The government said it would not speculate about what policy options were being considered.
(BBC)
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