Prime Minister Gordon Brown again refused today to give a categoric guarantee that more than £25 billion of taxpayers’ money loaned to Northern Rock to keep the stricken lender afloat would be repaid.

The Prime Minister sidestepped a challenge over whether the public funds were safe during an interview with the BBC, saying only: “Our intention is to ensure the Government’s financial position on this.”

He also said that he did not know when a final rescue plan for Northern Rock might be agreed, despite suggestions from the Treasury that it wants to matter resolved within weeks.

“We are in negotiations are the moment with prospective purchasers,” he said. “I don’t know when a final announcement will be made.”

Consortiums led by Virgin Group and Olivant, an investment group, are both in talks with Northern Rock and the Treasury over a potential takeover amid persistent question marks over whether sufficient funding will be available to help repay the loans made to the mortgage lender by the Bank of England.

Mr Brown's remarks came as he sounded a renewed warning over what he says is a “dangerous” year ahead for Britain’s economy, foreseeing “what is clearly several months of global financial turbulence”.

The Prime Minister said that his “new year determination” was to make sure that Britain can withstand the financial upheavals that he believes still lie ahead. But he once again insisted that his Government’s “tough decisions” have left the economy well placed to do so.

As he and Alistair Darling, the Chancellor, confront what may be the most testing year for the economy since the start of the decade, Mr Brown also renewed his insistence that “tough discipline” over public sector wage deals was essential to control inflation.

With ministers likely to be concerned that any inflationary wage deals might deter the Bank of England from delivering interest rate cuts that would bolster vulnerable growth, he claimed that public pay restraint has been a factor that had helped to pave the way for last month’s quarter-point cut in base rates.

After admitting at the weekend that more had to be done to “break the back of inflation”, the Prime Minister conceded that “I would like to have paid nurses and police more” and promised to “do better” on public pay in future years.

But amid simmering discontent among police officers and other public sector workers, he insisted: “We had to take these tough decisions to stage the pay awards so that we can get inflation down.”

Mr Brown’s latest warning over further economic turbulence came as mounting fears of US recession, sparked by bleak news from America’s jobs market on Friday saw world stock markets begin the week’s trading shakily today.

In early morning trading in London, the FTSE 100 index eked out slim gains but managed to cling to positive territory after equities in Asia tumbled to two-week lows .

The broadly-based MSCI index of Asia-Pacific stocks outside Japan had tumbled by 2.3 per cent, while in Tokyo the Nikkei 225 index dropped to its lowest for 17 weeks at one point, and later closed down by a hefty 1.3 per cent.

The Nikkei’s latest losses today came on the heels of its brutal 4 per cent plunge on Friday, the first day of equity trading in Japan this year. The FTSE also shed more than 2 per cent on Friday while in New York the broad S&P 500 index saw 2.5 per cent wiped off the value of American bluechips.

Fears over US and world prospects amid continued fallout from the debacle in America’s sub-prime home loans market was at the top of the agenda today as the heads of the world’s most powerful central banks gathered for a second day of keynote talks in Basle.

The central bankers, including Ben Bernanke, the chairman of the US Federal Reserve, and Jean-Claude Trichet, the president of the European Central Bank, are also set to mull the effectiveness of the unprecedented joint action they ordered at the end of last year in a bid to ease strains in money markets with injections of additional liquidity.

Since that joint action, sharp falls in market interest rates for lending between commercial banks in the world’s big economies have suggested that the intervention has been more effective than many economists had predicted.

Mr Trichet is due to brief journalists on the central bank governors’ conclusions later today.

However, inflation will remain a key concern during today’s talks, and continues to vex central bankers, and complicate their response to weakening global economic conditions. Inflation worries have been inflamed by last week’s latest surge in crude oil prices to record levels above $100 a barrel. Crude prices began the week a little lower, with US crude futures having edged down 61 cents in the latest trading to stand at $97.30 a barrel.

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