By Matthias Sobolewski and Erik Kirschbaum

BERLIN (Reuters) - The German government is working on a British-style rescue plan for its financial sector which could involve guarantees of over 100 billion euros ($137 billion) and a large capital injection.

A coalition party source confirmed the essence of a report in Die Welt newspaper which said the government was considering a major rescue package based on the British model.

"What Die Welt is reporting is not incorrect," the source, who is familiar with government deliberations, told Reuters.

Finance Minister Peer Steinbrueck confirmed the government was working on a comprehensive plan, although he said it was too early to offer any details of what it might look like.

"The government is preparing to take some concrete action," Steinbreuck told ARD television in an interview from Washington but he repeatedly declined to elaborate.

"No, it's too early to speculate about that," Steinbrueck said when asked about the newspaper report.

"What's accurate is this -- that I'm convinced that in Germany we cannot continue going from one crisis ... to another like in the last week but instead we need a comprehensive solution. That's being worked on now," he said.

The conservative daily Die Welt reported the government was considering offering the sector interbank guarantees worth "triple-digit" billions or direct loans. It is also mulling the injection of equity capital in "double-digit" billions.  Continued...