WASHINGTON (AFP) - Group of Seven finance chiefs announced Friday a plan of action to fight a global crisis including the use of "all available tools" to support key institutions and prevent their failure.

"The G7 agrees today that the current situation calls for urgent and exceptional action," a statement released by the US Treasury said.

"We commit to continue working together to stabilize financial markets and restore the flow of credit, to support global economic growth."

The plan states that the G7 would "take decisive action and use all available tools to support systematically important financial institutions and prevent their failure."

The communique was released after a meeting of finance ministers and central bankers of the United States, Germany, Japan, France, Britain, Italy and Canada in Washington.

US Treasury Secretary Henry Paulson, in a separate statement, said the G7 had "finalized an aggressive action plan to address the turmoil in global financial markets and the stresses on our financial institutions."

"This action plan provides a coherent framework that will direct our individual and collective policy steps to provide liquidity to markets, strengthen financial institutions, protect savers, and enforce investor protections," said Paulson, the architect of a 700-billion-dollar bank bailout passed by Congress last week.

"Never has it been more essential to find collective solutions to ensure stable and efficient financial markets and restore the health of the world economy," he said.

The G7 statement said the members will "take all necessary steps to unfreeze credit and money markets and ensure that banks and ensure that banks and other financial institutions have broad access to liquidity and funding."

Members would "ensure that our banks and other major financial intermediaries, as needed, can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses."

The statement also said the G7 would ensure that national deposit insurance and guarantee programs "are robust" to allow people to have confidence in the safety of their deposits.

The plan also calls for "action, where appropriate, to restart the secondary markets for mortgages and other securitized assets."

The G7 statement came against a backdrop of a growing financial firestorm as panic spread in global markets.

The G7 finance chiefs met ahead of the International Monetary Fund and World Bank annual meetings opening Saturday, drawing finance leaders and private financiers from the twin 185-nation institutions members.

The gathering of the planet's finance leaders is being held amid a stunning loss of confidence in the global financial system that has sent markets into a freefall.

The major industrial powers have already pumped massive amounts of liquidity into the global banking system in an effort to unclog credit markets, and led a coordinated cut in interest rates.

But panic has still gripped the markets, which have hit multiyear lows in the United States and most other countries amid loss of confidence.

Stock exchanges from Tokyo to London suffered more staggering losses Friday, adding to the turmoil for finance ministers from the G7 to discuss.

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