The Northern Rock debacle produced its first senior casualty yesterday when Matt Ridley, chairman of the run-hit bank, announced plans to quit.

The Newcastle-based company named Bryan Sanderson, the former chairman of the international bank Standard Chartered and of the health insurer BUPA, as his successor.

The bank said that Dr Ridley and the other directors believed the time was now right for him to go. He had until now been asked to remain while new funding arrangements were put in place and to allow him to appear before the Treasury Select Committee, it said.

A director for more than a decade and chairman since 2004, Dr Ridley was paid £315,000 a year. He has refused to accept blame for the implosion at the bank, which led to panicking depositors queueing to withdraw their savings before the Government stepped in with a guarantee. It is understood that he will not receive any payoff.

MPs and trade unions welcomed the resignation. Michael Fallon, a Conservative member of the Treasury Select Committee, said: “Somebody must accept responsibility and it’s the head of the organisation that honour demands should go. I would hope that he is followed by the chief executive [Adam Applegarth] and in due course by all the non-executive directors.”

David Fleming, national officer of the union Unite, said: “Someone at the top has at last accepted responsibility for the crisis that has deeply affected working people and savers.”

Mr Sanderson, who resigned abruptly from Standard Chartered in November, will take over as soon as his appointment has been approved by the Financial Services Authority.

Brought up in a colliery village in the North East, Mr Sanderson is a former chairman of Sunderland Football Club and a director of Durham Cricket Club. He spent most of his career at BP. He has also been a regular adviser to Labour and served on several committees advising the Department of Trade and Industry.

He said that he had first been approached about the job three weeks ago by Sir Ian Gibson, the senior independent director. The appointment is understood to have Treasury approval.

Yesterday Mr Sanderson damped down expectations of a deal for Northern Rock that would please all stakeholders, from taxpayers and shareholders to employees and regulators. “There’s not going to be any ideal solution,” he said. “We’ve got to find the least damaging outcome.” Northern Rock is considering possible rescue offers from, among others, Virgin Money, Sir Richard Branson’s financial services group, and JC Flowers, the private equity firm.

It continues to borrow from the Bank of England to meet short-term liabilities. The loan, underwritten by taxpayers and secured on Northern Rock assets, has reached £16 billion and has been mushrooming at the rate of £400 million a day.

Sir Ian said: “I want to thank Matt Ridley for his hard work as chairman since 2004 and particularly for his commitment during the very difficult circumstances of the last few months.”

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