By Paul Hoskins and Lorraine Turner

LONDON (Reuters) - Investors gave a mixed reaction to a 50 billion pound government bailout of Britain's banks that drew a sigh of relief from the industry itself.

Shares in HBOS (HBOS.L: Quote, Profile, Research) jumped 65 percent on Wednesday as analysts said it was best placed to benefit from the bailout and after the bank said it had no plans to pull out of a state-backed takeover by local rival Lloyds unveiled last month.

"HBOS has most to gain from such funding guarantees and is cheapest," analysts at Collins Stewart wrote in a research note, adding that they continued to attach a high-risk "buy" rating to the stock.

Coordinated interest rate cuts in the United States and Europe gave shares an additional boost.

Shares in Barclays (BARC.L: Quote, Profile, Research) and Lloyds traded broadly in line with the broader market for much of the morning, however, as the global credit malaise overshadowed the deal.

Standard Chartered (STAN.L: Quote, Profile, Research) was the biggest loser amid worries over prospects for some of its key Asian markets.

HBOS said the package, which includes a pledge to inject 200 billion pounds into money markets, was good for shareholders and customers and showed a "very real and serious intention" to restore stability to the banking system.

"Our proposed acquisition by Lloyds TSB remains very much on track," an HBOS spokesman said. "Work on the deal is going well. The integration planning process is making good progress."  Continued...