The graphic below provides a high-level overview of the plan:

Graphic courtesy of the BBC.

What a novel idea: instead of overpaying for the bank's worst assets based on the idea that you "might" be able to sell them for a profit later, you instead  inject cash into the banks in exchange for interest payments and/or preferred shares, set capitalization standards, mandate behavior towards consumers, mandate standards around executive pay and dividends and (most importantly) effectively guarantee that the taxpayer gets to benefit from any upside. Furthermore the plan is relatively simple and can be enacted rather quickly, so you avoid issues around a slow ramp up time, administrative difficulties, it's easier to shift course if new or different actions are needed, etc.

Perhaps the best part of the British bailout plan is the fact that the banks are being treated in the same manner that they would treat each other, or any other business that was desperately in need of cash and/or outside investment.

I.e. in the space of less than 24-hours the British Government has embarrassed our Government's feeble attempt to bailout our banking system, especially since their plan took over a week to put together and is a pork-laden insult that will prove to be largely ineffective.

Mind you I don't especially like bailouts because of the moral hazards introduced, the way the taxpayers are treated and the overall message it sends to a society, however in some cases bailouts are indeed necessary, and if you're going to do a bailout something like the current solution being put into action by the British is not a bad way to go.

At this juncture the American taxpayer needs to pose the following question to their representatives in Congress: "Why didn't you display the leadership, courage and integrity to put forth a similar plan, especially when many critics of TARP suggested the very same thing and something like the British plan would be easier to implement?"