Alistair Darling, the Chancellor of the Exchequer, was today ordered to face questions from MPs over his handling of the Northern Rock crisis.

The Treasury confirmed that the House of Commons Treasury Select Committee, which yesterday grilled Mervyn King, the Bank of England Governor, will also take evidence from Mr Darling.

The Financial Services Authority (FSA) has also been summoned.

John McFall, the Select Committee chairman, said he had written to the Chancellor – who has already said he will make a statement to Parliament on Northern Rock – to tell him that it is widening its inquiry into the stability of the UK's financial markets.

MPs on the cross-party committee want to know why the so-called "tripartite" framework of the Bank, the Treasury and the FSA responsible for financial stability since 1997 failed to prevent the run on Northern Rock, which led to savers queueing to withdraw their money from branches.

Mr Darling, who has already conceded that his job is on the line over the Northern Rock debacle, will not relish the prospect of facing Mr McFall and his committee colleagues.

The chances of a chastened Mr King being reappointed as Governor when his present term expires next summer remained in the balance today after both he and his deputy, Sir John Gieve, were savaged by one MP after another during yesterday's hearing by the Treasury Committee.

However, Mr McFall claims that Mr King’s evidence raised more questions than it answered.

Mr McFall said that what had once been seen as a "Rolls-Royce" structure turned out be "an old banger" when put to the test.

Downing Street today confirmed that the Treasury was considering Mr King's call for an overhaul of legislation regulating the bank system.

However, Gordon Brown's spokesman said it was too early to say whether legislation would be tabled when MPs return to Parliament after their summer break next month, or whether reform of the tripartite framework would be considered.

George Osborne, the Shadow Chancellor, has said regulatory reform is an "urgent priority" and offered Mr Darling the co-operation of Conservative MPs to get the necessary legislation swiftly on to the statute book.

Separately, a group of private shareholders in Northern Rock has approached a leading London lawyer to ask him to investigate bringing a damages lawsuit against the company for failing to inform the market of its troubles quickly enough.

David Greene, head of litigation at Edwin Coe, said any lawsuit would focus on whether Northern Rock breached its duties as a public company by waiting until September 14 to make a statement to the Stock Exchange.

If a lawsuit is launched, the current group of 30 shareholders will invite all Northern Rock investors to participate.

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive