Britain nationalises mortgage lender Northern Rock

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The Independent Online

Britain will nationalise ailing mortgage lender Northern Rock until financial markets stabilise and it can be returned to the private sector, finance minister Alistair Darling said on Sunday.

"In the current market conditions we do not believe the two proposals deliver sufficient value for money for the taxpayer," Finance minister Alistair Darling told a news conference. "So the government has decided to bring forward legislation to bring Northern Rock into a temporary period of public ownership," 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 25 billion pounds ($49 billion) and has been put on the government's books as around 90 billion pounds of public debt.

A consortium led by billionaire Richard Branson's Virgin Group [VA.UL] 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.