FTSE up 6.3 pct ahead of U.S. bank announcement

* FTSE 100 rises 6.3 pct by midday, led by commodity stocks

* Financials up, U.S. to inject $250 bln into its banks

* Cadbury Q3 sales rise, stock up

(For more on the financial turmoil, click on [nCRISIS])

By Dominic Lau

LONDON, Oct 14 (Reuters) - Britain's top share index was up 6.3 percent by midday on Tuesday, extending the previous session's sharp gain, with Washington set to unveil a $250 billion injection into its banks, further easing market anxiety.

The gains came after the FTSE 100 .FTSE posted its second best one-day percentage rise ever on Monday. The benchmark plummeted 21 percent last week -- the index's second worst weekly fall ever -- on liquidity strain and global recession fears.

By 1052 GMT, the FTSE 100 was up 265.9 points at 4,522.8. The index is still down 30 percent for the year, however.

Beaten-down banks were among the standout gainers, with the FTSE 350 banks index .FTNMX8350 up 3.7 percent.

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz) put on 2.2 to 11.7 percent.

Following similar measures in Europe, the U.S. Treasury is due to unveil its plan at 1230 GMT with about half of the $250 billion likely to go to the top nine U.S. banks to get them lending to each other again, people familiar with the plan said.

"It does seem that the coordinated move by governments seems to have done the trick. They have pulled a little bit of money back into the market. I suppose it's a little bit of wait-and-see," said Mark Priest, a senior trader at ETX Capital.

"We have seen what these markets can be when they are not happy," he said.

"Everybody is a bit wary of just giving away free money because we have seen what it can lead to."

The expected announcement lifted Asian and European stocks, with Japan's Nikkei average .N225 surging over 14 percent to post its biggest one-day gain in its 58-year history.

The Dow Jones industrial average .DJI rose 11 percent overnight, its biggest one-day point gain ever and its biggest percentage gain since March 15, 1993.