National Australia Bank will be eligible to raise government-guaranteed debt and may also sell to the government preference shares (which will count as tier one capital) in Clydesdale Bank under the recapitalisation scheme for British banks announced last night.While the aid - which comprises £50 billion in equity and £200/250 billion in - is targeted at eight named institutions (including all the clearing banks, the two colonial networks and one building society), other banks may apply.The criteria include any UK registered banking subsidiary of foreign banks "which have a substantial business in the UK", and which NAB does.Other Australian banks with registrations in Britain would not qualify.The form, and price, of any preference shares (or similar security) is still to be clarified. NAB has not, as yet, flagged any interest in the scheme.Abbey, Barclays, HBOS, Lloyds TSB, Nationwide Building Society, Royal Bank of Scotland and Standard Chartered will also sell a combined £25 billion in new tier one capital to the British government by the end of the year. HSBC said it did not plan to tap the government funding.All eligible banks may also exploit a scheme under which Britain's government will guarantee £250 billion in term debt of up to 36 months. Banks must first increase their capital base under terms agreed with the government to qualify to sell this debt.