Would Branson have made such an effort to rescue the NR bank without a huge financial commitment from the Government?. Of course not. Without such a commitment his proposals are not commercially viable. The only benefactors would have been his consortium, who could have walked away at any time in the future, leaving the taxpayers to pick up even larger debts. Temporary nationalisation or bankruptcy have always been the only options available to the Treasury.

pip, Sutton, Surrey

The shareholders can whine all they like - it is not the government's job to look after them. It may be that the FSA shouldn't have allowed the NR business model, but the fact that they did does not make them accountable for its failure.

The shareholders could have challenged the management's operating model, but they chose not to as this would have reduced NR's profit potential. Management, and therefore the shareholders, took the risk; and they lost.

They should be grown up about this, accept that they have taken a risk and lost, and move on. If they get taxpayerss money above a few pence a share, then I, and thousands like me, shall be furious.

Daniel, London, UK

The only solution.More to come and just not in UK.

tom payne, kerry, ireland

Why not now go the whole hog and turn NR into a sort of KiwiBank.

www.kiwibank.co.nz

DickW, Aberdeen, Scotland

I don't see why shareholders of NRock are surprised or feel they have lost out, if the govt didn't step in they would have still lost their money

Jon, Bristol,

Mr Golden appears to have made a bad investment. Whether in Ireland or the UK, that sounds like his fault.

Gordon Stewart, London,

Well done Mr Darling, this will be the best deal for the Tax-Payers without a doubt.

Barrie Garland, Bristol, U.K

It's the sensible option, in all the circumstances. The dire conditions in capital markets have been - and continue to be - completely unprecdented.

I really didn't like the idea of an entrepreneur - or anyone else - cleaning up at the taxpayer's expense. After a period of 3 or 4
years - when the housing market has re-stabilised and once house prices have started to grow again - it can be re-privatised at little overall cost. For sure there will be some nervous moments and likely write-offs of some of the more extreme mortgages in the current market correction, but this is probably the right decision.

Nigel Grimshaw, Cambridge,

This quote from a Labour leader is so depressing.

"Gordon Brown, the Prime Minister, said recently: "My first concern has always been the stability of the economy. Why we acted to help Northern Rock in the first place was to prevent contagion to other banks and other building societies and the British economy."

Does Gordon Brown not understand that this whole fiasco could not have happened to a building society? By definition Building Societies could not have encountered this greed-induced problem. This is what he should have said.

"My first concern has always been the stability of the economy. The foolish and greedy conversions of building societies to PLCs have been a disaster for all but a few. We will hold this bank and future failures such as Bardford and Bingley in the public sector to allow the mutual sector to regrow. Thank Christ for Nationwide and Brittania."

Ash, London,

Great!!! Now the government tries its hand in banking. Pity the shareholders.

Thimmaiah Machaiah, Maidenhead, Berkshire

Can we have our shares now please?

judy, Liverpool, England

This is nothing more than a subsidy to the tune of £6 billion each for sixteen seats in a Labour heartland. With house prices about to embark on a long journey South the collateral behind Northern Rock will be depreciating and its gearing with it. In addition the interest charge at base plus libor will add some £5.7 billion to the debt this year, £6 billion the next and so on. Then there's the cost of running a business that is effectively dead in the water. Revenues will fall well short of overheads therefore and so another few hundred million will be thrown onto the pile. Someone should be going to jail for this.

figurewizard, petersfield, hampshire

It is not a proper or appropriate use of public funds to provide free insolvency insurance to customers of any bank that happens to get itself into financial difficulties. At the same time as the government catastrophically under-funds vital public services such as the armed forces, health, prisons and the justice system, it squanders unimaginably vast public wealth on things such as this on which no expenditure at all is appropriate. The present administration is, without any doubt, the most reckless government in the history of British democracy.

James E. Petts, Burnham, England

This whole debacle stems from the financial woes of the ineptitude shown by those engaged in the prime lending section of the American banking system so it is hardly a British or NuLabour engendered problem. However, having said that, I feel the 'follow the Leader' attitude adopted by the UK in so many aspects of its daily life brought it to British shareholders and investors' doorsteps. Now comes the difficult part - how to address the situation? A tough call, no matter who is holding the reigns of Government. Nationalisation may still be a dirty word in many people's vocabulary but how else can faith in our banking and other financial institutions be maintained if Northern Rock is just allowed to founder? On the other hand, the propping up of what is, after all, essentially a private business does set a dangerous precedent as the article points out. What should always be borne in mind by investors, though, is that all forms of investment carry a risk.

Colin Cumner, Adelaide, South Australia.

That the NR business model was flawed is now well understood.

However, the financial sector still lent it the money it needed through the wholesale market. If it was so obviously flawed why did it do that? Greed of course. The whole system is to blame.

DickW, Aberdeen, Scotland

If shareholders want compensation they should put up the capital needed to save the bank. I feel that before long the amount of defaults will make this a very bad position for the govt. to have taken, but they probably had no choice after the initial bail out was made. That was the mistake.

Mart, Sevenoaks, England

Nationalizing the Rock is WONDERFUL news as it gives you British the opportunity to FINALLY create your own truly NATIONAL BANK, and take the control of creating your currency and setting your own interest rates away from the Private European families who started the Bank Of England 200 years ago and have been milking your economy since. 5 American Presidents, including Lincoln and Jackson took back the power for the U.S. government to create and control our currency, and brought prosperity to America each time, that lasted until the next time the Banking Cartel bribed their way back, into control of this vital sector, that gives them power over us all. Brown could become the greatest national hero in two centuries, if he could accomplish this feat. Read your financial history.

victor compton, Cherbourg, France

If the 'independent valuer' gives a similar unwelcome answer as the police pay review body did - will it be similarly ignored?

Or if the 'independent valuer' suggest a figure, oooh say of £1 billion, will the government tamely pay up.

If the 'independent valuer' suggests a price which does not suit existing shareholders, can they sue?

Would anybody buy anything, let alone a bank, based on the say so of an 'independent' valuer?

Of course no one would, not with their own money. Fortunately for Darling/ Brown and this broken backed government they have ours to play with.

TrevorH, OXON,

what exactly have people who received shares for nothing lost?

e skelton, cardiff, uk

You could say that the government has just paid £55bn to replace all the council house stock that the Tories flogged off for a song. As for the mortgagees, they are now the proud would-be owners of council houses.

Paul, Coventry,

Very wrong ,worrying and unjust.
Like any other 'insolvent' business, NR should have been put into administration. The administrator would have tried to sell NR as a going concern. But if that failed, the assets would be sold , creditors paid off and anything left returned to the rightful owners, the shareholders.

History has tought us that all nationalised business was run inefficiently, largely for the benefit of its staff,swallowing endless taxpayer subsidies.

The government is responsible for at least a part of the destruction of NR value. Brown, Darling, Balls&co designed the FSA which utterly failed to prescribe and monitor the NR's liquidity. HMG mismanaged the announcement "lender of last resort" which led to the panick run-on-the-bank ( several hundred banks in Europe needed similar ECB lending but they remained anonymous). Before that , they turned down Loyds Bank's offer to take over NR.

Compensation? Never right when the confiscator determines the price.

Jake Foreman, Hastings, England

Remember that this is an admission that there is no short term solution to the problem, that the credit market seizure was not a minor hiccup and the world of credit is now quite different to what it was pre August 2007.

As has been said many times this is not a liquidity crisis. There is plenty of money around. Just look at the deep pockets of the soveriegns funds who have been buying up the US banks on the cheap.

Consequently what we have is a risk problem. No one would touch NR unless the government took on all the risk. The governments has now decided that if they are going to take the risk, they may as well take the reward. This is of course a sensible option. What worries me though is how this new risk aversion by the markets will play out in the indebted UK economy over the next few years.

Neill, Maidstone, Kent

About time! Sadly the bank was allowed to get into this state by the regulators and I feel sorry for the shareholders who still own shares granted when the company demutualised. But at least there is an end in sight to this farce.

I'm just waiting for the hedge funds' PR companies to start their media onslaught next week about how the government isn't going to pay them enough for their worthless shares in a worthless company.

Michael, London,

Sorry people , the shareholders ain`t going to get a penny ; it`s all going to the government .

Jim, Sidcup/Kent,

I wonder if the Rock announcement was timed to be partly obscured by the Kosovo one ?

As it's only going to be "temporary period of public ownership," we have nothing to fear. Somehow I suspect temporary will be longer than Darling's temporary period as number 2 on the Titanic.

roger, london,

The regulators have to take some of the blame, it's true, but the UK has always been relatively regulation-light compared to the continent. Some risk comes with that, and setting the level of that risk is the responsibility of the shareholders, since they ultimately own the company. And given the difficulty in motivating diffuse shareholder groups to make changes in company direction it becomes a classic case of caveat emptor...

Really I don't see what the fuss is about. The BoE functioned as the lender of last resort, safeguarding depositors' balances, which is what it's supposed to do. The BoE or the regulators make no guarantees about the stock exchange, and if nationalisation is the best way to safeguard the public investment, all well and good.

Kerome, London, UK

what a waste of space Darling has known for months that he did not want Richard Branson to get the rock. All the jobs that will be lost will be on his shoulders alone. A real missed oppertunity

Joe, Bury, Suffolk

I just wonder what the Government's reaction would have been if Northern Rock hadn't been based in a Labour Stronghold. Interesting?

Derek, Bristol, England,

Excellent. The "people's philanthropist" has been thwarted. Despite the problems people can have confidence in the "new" Northern Rock. How long would it have been before the Virgin bid came off the rails as the bells and whistles and razamataz that characterise all such short term opportunist ventures came face to face with reality?
I have no interest in NR other than a wish to see it prosper long term rather than become another part of a less than transparent ,dubious, "flashing lights, and small print" empire.

D.L. Stephens, York, England

"old labour" - they can't resist taking any money from anybody who may have saved or invested - is was our pensions a few years ago - it's our savings today - our standard of living tomorrow - but who gets it? - not us - must be the MPs - expenses, wages, pensions? - they just keep going up - the dead hand of the anti English labour party is destroying England.

Marty, London, England

The current crisis is the INEVITABLE result of the last 5 years of ridiculously low interest rates and irresponsible lending.
No one should be surprised.

B Calvert, London,

Well, Nu Labour, you've got what you deserve. Youre in freefall now.

ronnie, Bridego Bridge, Bucks

Brian, You hit it on the head, the FSA doesn't regulate thats why the UK financial sector is such a mess....

bob taylor, castelnau, France

A pity for the shareholders - but as Brian in Dublin states, prices move in both directions and since the bank run some months ago, anyone with shares in the Rock has been operating a speculative position - they must be presumed to know that the downside was exactly what has now happened......

Jeremy, Gateshead, Tyne & Wear

Yes, of course Brian - any irish joke would be hugely ironic wouldn't it, as the Northern Rock fiasco was the fault of all 60 million inhabitants of the UK wasn't it?

If your opinion is representative of the irish as a whole, I suspect it can only enforce the validity of those jokes!

Alex, London,

The BBC:

"Financial services, by contrast, have been considered the great British success story - so for such a seemingly growing bank to end up being nationalised is a big moment for the City and a big moment for the government."


Errrrm yes such successful financial services sector....

Rather like the British industrial heritage circa 1780 to 1979!

But they weren't successful were they? And they most certainly didn't 'adapt' into new markets like Northern Rock.

Alistairs Solicitors, Bristol, UK

I work for a high street bank, and when studying for my bankers exams many years ago was taught that banks never "borrow short and lend long". It really was not rocket science to realise the Northern Rock business model was deeply flawed from the outset. How the BoE and FSA allowed this situation to occur is absolutely ludicrous. Amazingly Northern Rock is still doing business - all backed by a government - i.e. yours and mine - guarantee.
If I was an NR shareholder, employee or depositor I would be spitting feathers!

N Jarvis, Norwich, UK

Excellent! I'm switching my savings account to Northern Rock immediately. I can't lose my money.

Bob, London,

Richard Branson must be bitterly regretting his trip to China with Gordy now. What an opportunity to make £1 billion underwritten by the British tax payer! Best thing since railway privatisation. Darling has no good options left (except a dignified resignation perhaps).

David Logan, Birkhill, Scotland

I am a small shareholder and am utterly stunned at the level of imcompetence I have experienced from investing in the UK.

I am prepared for shares to go up and down but what has happened has been unreal.

I would have assumed that a business model that could collapse in a day would never have got past the regulators.

That a bank run occurred is just incredible.

And now my shares have been confiscated.

This is worse than a banana republic.

To cap it all off I can just imagine the reaction in the UK if this happened in Ireland.

Well the evidence is clear. Any Irish joke I hear in the UK afer this episode is deeply, deeply ironic.

Brian Golden, Dublin, Ireland