Thrifty Loans

Prime Minister Gordon Brown has delayed a decision with regard to the future of Northern Rock to give the stricken bank one more chance to find a private buyer. Mr Brown told the City and MPs that they would have to wait for an announcement about Northern Rock’s future.

It seems the Prime Minister is trying to deflect assumptions that nationalisation is imminent. However, Conservative leader David Cameron accused Mr Brown of ‘dither and delay’ after the latter refused to confirm that £55bn of taxpayers’ money had been handed over to the bank. The affair marked a ‘fresh chapter in the incompetence of this Government,’ Cameron said.

Shares in the bank are showing no signs of recovery, down as low as 52.5p, giving it a stock market value of only £221m; less than a year ago it was valued at £5.3bn.

About to embark on a five-day tour of China and India, Mr Brown told MPs: “Our action was to ensure stability in the economy. And to ensure that stability we said we would secure the deposits of all depositors in Northern Rock and stand behind the firm with support from the Bank of England.”

There has been speculation in the City that hopes of a private sale have disappeared, but the PM said: “In the next few weeks we are looking at the situation of how we can find buyers for Northern Rock.”

Mr Cameron was not convinced, saying that each taxpayer had so far lent £1,800 to the ailing bank and asked the Prime Minister to confirm those figures to the Commons. Mr Brown’s response was to say that it was his intention that all money borrowed from The Treasury would be paid back by the lender.

Emergency legislation is ready to be rushed through Parliament in 48 hours should the Government need to buy the company’s shares