The index of share prices fell by more than 10% on Monday to stand at its lowest level for nearly two years.

The United States has said it is working with other Group of Seven major industrial nations on providing more financial aid to Russia, but no details have emerged on the size and scope of the emergency response the US administration had in mind.

Treasury Secretary Robert Rubin said on Monday that the US was working "very actively" to provide more financial aid to Russia.

"Our focus has been, and we are now very actively involved in working with Russia, in working with the G7 nations, in working with the IMF and the World Bank with respect to the financial situation, the reforms that Russia would need to continue taking in order to be successful, and then additional financing," he said on CNN's "Moneyline" programme.

Mr Rubin added: "All of this will be focused through the international financial institutions, most immediately through the IMF, although the World Bank also has a very important role to play."

He said the US would not provide direct financial assistance.

"I don't think that unilateral or bilateral action, either one, is the most effective way to proceed."

Over the weekend, both the International Monetary Fund and the US administration praised the Russian Government's determination to get its finances in order.

The IMF promised to release a $670m tranche of a $9.2bn loan to prop up the country's fragile economy.

Investors, however, decided not to take notice and continued to pull out. During the last month, the Russian stock market has lost 40% of its value.

Last week, the central bank intervened to stabilise the financial markets. It tripled interest rates to 150% and heavily bought roubles.

More action needed

Several government ministers and the head of Russia's central bank, Sergei Dubinin, say the crisis is over and that Russia has enough currency reserves to defend the rouble.

However, analysts doubt this and say the latest tranche of the IMF loan will not be enough. They suggest that Russia needs a fresh stabilisation loan to help the government buy out expensive short-term debt.

The Deputy Prime Minister, Viktor Khristenko, has acknowledged as much. He said the government needed to shift its debt burden into cheaper, longer-term paper to reduce the costs of borrowing.

Speculation has been rife in recent days that major western banks are preparing a new stabilisation loan to help support the rouble.

Banking sources in London and Moscow said that a groups of banks including ABN Amro of the Netherlands, Germany's Deutsche Bank and US banks JP Morgan and Chase Manhattan were involved in negotiations on the possibility of a package of several billion dollars.