Prime Minister found wanting when challenged on Northern Rock

6.59.08pm UTC (GMT +0000) Mon 7th Jan 2008

Northern Rock

Gordon Brown today attacked critics of the government's handling of the Northern Rock crisis, but was unable to guarantee that the £26bn of taxpayers' money loaned to the bank will definitely be recovered. The prime minister insisted that the decision to support Northern Rock was correct, as it had prevented wider panic in the financial markets. The Treasury is currently negotiating with two potential purchasers, Virgin Group and Olivant. Both their proposals involve the government continuing to offer billions of pounds in support for several years.

Liberal Democrat Shadow Chancellor Vince Cable said "It is absurd for Gordon Brown to claim people are playing politics whenever they disagree with him on important issues of substance. It is entirely legitimate to be concerned that £26bn of public money has been pumped into a failing bank with no guarantee that it will ever be repaid. The Liberal Democrats are the only party committed to safeguard public money and we are happy to work with the Government to find a way to do so. But without a private bidder who can guarantee the repayment in full of all taxpayer loans, the only option can be to temporarily nationalise Northern Rock."