City firms turn down Rock arbitrator role

The Government is no closer to appointing an independent arbitrator to determine how much Northern Rock shareholders should be compensated after the nationalisation of the Newcastle-based bank two months ago.

A number of leading City firms are understood to have declined approaches from the Government to make a valuation of how much the bank was worth when it was taken into public hands in February. A Treasury official confirmed there has been "no movement" on an appointment.

Roger Lawson from the UK Small Shareholder's Association, which is seeking a judicial review of the nationalisation, said: "The terms of reference from the Government make it impossible for any assessor to make an independent valuation. Who would want to tarnish their name by taking the role on?"

Mr Lawson argues that the bank's £110bn mortgage book valued its shares at nationalisation at 320p each. Legislation enabling the public takeover in effect valued the shares at zero.