British finance minister Alistair Darling has announced that troubled bank Northern Rock will be brought into a 'temporary period of public ownership.'
'In the current market conditions we do not believe the two proposals deliver sufficient value for money for the taxpayer,' Finance minister Alistair Darling said.
'So the government has decided to bring forward legislation to bring Northern Rock into a temporary period of public ownership.'
Mr Darling said shareholders of Northern Rock would receive some compensation.
‘The legislation will enable the government to acquire the bank's shares and its assets. It will provide for compensation to be determined by an independent valuer,’ he said.
The first run on a major British bank in more than a century last year has become a headache for Prime Minister Gordon Brown, tarnishing his popularity and denting a reputation for financial stability.
Britain's fifth-largest mortgage lender already owes taxpayers around €33bn and has been put on the government's books as around €120bn of public debt.
A consortium led by billionaire Richard Branson's Virgin Group had been the front-runner, ahead of an offer led by the bank's management team.
Both were told last week to improve their offers because neither offered taxpayers a good enough deal.
