Alistair Darling yesterday played down speculation that the government would soon be able to secure private sector finance to cover the billions of pounds lent to Northern Rock, the beleaguered mortgage lender. Financial Times, The Times, Daily Telegraph

Speaking to the Commons’ Treasury committee, the chancellor said the process of trying to find new finance to replace the £26bn lent by the government was 'reaching a stage when we have to come to a conclusion'.

But he stressed that the government was operating in 'extremely difficult circumstances' where many financial institutions “cannot borrow or lend”, so the bank might have to be nationalised.