The Government is not being fair to shareholders in Northern Rock by saying that it wants to take all of the upside from a potential future sale of the bank – the lawyer representing the largest investor in the nationalised bank has argued.

Alistair Darling has repeatedly said the Government expects to receive a windfall from selling Northern Rock when economic conditions improve.

But Northern Rock shareholders are set to receive nothing because the Treasury has laid out compensation terms which dictate that the bank is treated as though it was in administration at the time of nationalisation, according to Lord Pannick QC, who is representing the hedge fund SRM Global.

Daily Telegraph, The Independent