The Treasury is poised today to nationalise Bradford & Bingley, the troubled mortgage bank.

In an attempt to try to avoid a rerun of the Northern Rock debacle the Government plans to hold an immediate fire sale to sell off B&B’s assets to one or more banks.

The Spanish banking giant Santander is in talks about its potential role in the rescue. Another buyer could be HSBC.

Although the Financial Services Authority had been trying to find a single white-knight bidder to take over B&B’s loans in their entirety, Britain’s big banks refused to get involved.

Alistair Darling, the chancellor, had been keen to try to avoid an expensive takeover that would cost the taxpayer billions. The Treasury is expected to announce today that B&B will be nationalised under special legislation used when it took Northern Rock into public ownership earlier this year.

It is understood that most of B&B’s £50 billion of loans, including £42 billion of home mortgages, will not be sold and will be nationalised on a long-term basis. Discussions are now understood to focus on breaking up the bank and selling its assets to other banks. The government has been lining up bidders for B&B’s £20 billion of retail deposits and 197 branches.

Tony McGarahan, a spokesman for B&B, said late last night that talks were taking place and an announcement would be made before the stock market opened on Monday.

“We can assure customers that their deposits are safe with Bradford & Bingley,” he said.

The crisis for B&B came as negotiators in Washington continued to wrangle over the terms of the US government’s $700 billion (£380 billion) bail-out of its banks.

President George W Bush said there was “widespread agreement” on the principles of the plan, and Harry Reid, the Democrat Senate majority leader, said “significant progress” had been made. The terms of the deal are expected to be announced today, before markets open tomorrow.

Gordon Brown, who met Bush in Washington on Friday, returned to Britain yesterday to be briefed on the B&B situation by Mr Darling, who stayed in London to help oversee the latest crisis in Britain’s banking system.

B&B has been hit hard by fears that its portfolio of buy-to-let and self-certified mortgages will generate huge losses as the credit crunch begins to bite and house prices fall.

The bank’s shares have fallen more than 93 per cent in the past year, closing a further six per cent down on Friday at just 20p. The bank is now valued at £290m, compared with £3.2 billion at its peak.

Talks accelerated yesterday because of fears there could be a run on the bank tomorrow. B&B lost £800m of deposits in June and July.

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