Gov. Bruce G. Sundlun offered a plan he says will let the vast majority of depositors whose accounts were frozen in 45 Rhode Island banks and credit unions get most or all of their money back within four years.

Sundlun's rescue plan applies to 16 of the institutions that have been unable to get the federal insurance they need to reopen, and is subject to their approval.The plan involves loans from other banks - and could mean a tax increase.

The 16 institutions hold about $1.3 billion, or about 70 percent of the $1.7 billion that the governor froze on Jan. 1 when the private insurance fund that covered the 45 institutions ran short of cash. Twenty-two of those institutions have since obtained insurance enabling them to reopen Monday, Sundlun said.

Under the plan, nine Rhode Island banks would lend the state $150 million. The money would be used to pay depositors at the closed institutions half their savings accounts up to $2,500 and up to $10,000 from their checking accounts, he said.

The checks would be mailed Jan. 21, and the state would write IOUs of up to $100,000 for the outstanding amounts, he said.

"Such methods of repayment were implemented during similar banking holidays in other states by the United States government during the banking holiday declared by President Roosevelt in 1933," Sundlun said.

Sundlun said that he hoped to recoup the money through state spending cuts, but said that a tax increase may also be needed.

Sundlun, a Democrat, said he would seek legislative approval for the plan, which was drawn up by his staff, legislative leaders and people from the business community. But he planned to move ahead with it anyhow, he said.