WASHINGTON — The government put itself four-square into the country's banking business Tuesday, resorting to what President Bush conceded was the unwelcome choice of massive government investments in the banking system in order to loosen paralyzed channels of credit.

The president said the decision to buy shares in the nation's leading banks — a kind of federal intervention not seen since the Depression era — was "not intended to take over the free market but to preserve it."

But the administration was clearly conflicted by the action.

Said Treasury Secretary Henry Paulson: "We regret having to take these actions. Today's actions are not what we ever wanted to do — but today's actions are what we must do to restore confidence to our financial system."

At a news conference last month, Bush defended his administration's increasingly aggressive market interventions to deal with the biggest upheavals on Wall Street in seven decades.

"I'm sure there are some of my friends out there saying, I thought this guy was a market guy; what happened to him?," he said. "Well, my first instinct wasn't to lay out a huge government plan. My first instinct was to let the market work until I realized, upon being briefed by the experts, of how significant this problem became."

Said Paulson: "Government owning a stake in any private U.S. company is objectionable to most Americans — me included. Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable."

Nine major banks will participate initially, including all of the country's largest institutions. The first bank to take advantage of the new program was Bank of New York Mellon which announced Tuesday that it would sell $3 billion in preferred shares to the Treasury.

Some of the nation's largest banks had to be pressured by to participate by Paulson, who wanted healthy institutions that did not necessarily need capital from the government to go first as a way of removing any stigma that might be associated with banks getting bailouts.

It was the latest in a long series of moves taken by the administration and the Federal Reserve over the past several weeks to prop up a weakening financial industry. The economic picture in the United States had been darkening for months, but the slump took on new urgency — and had greater global repercussions — amid record-setting selloffs on Wall Street and enactment of a $700 billion bailout bill.