AIG BID BACKED; CREDIT CRUNCH CRISIS.

THE White House yesterday defended the federal takeover of AIG, claiming the failure of the sinking insurance giant and Manchester United sponsor posed a greater risk than the pounds 47.2billion loan of taxpayers' money.

Spokeswoman Dana Perino said the move - which gives the government a stake of almost 80 per cent in the firm - was to protect the US economy.

She said taxpayers would be the first to be repaid but admitted it was possible they might not get their money. She also refused to rule out more bail-outs, adding: "We will act to limit broader harm to the economy."