A legal battle between Northern Rock shareholders and the government came a step closer yesterday after Treasury lawyers rejected investor pleas for “fair compensation”. Financial Times, The Times, Daily Telegraph, The Independent

The UK Shareholders Association will now seek a judicial review of the decision to base payouts on the assumption that the bank was unable to continue without public support. The UKSA says this would leave shares in the group virtually worthless.

It hopes the review, expected in nine months’ time, will force ministers to rethink the valuation of the business. Assets such as Northern Rock’s £110bn mortgage book give it a net value of at least £3.20 a share, the UKSA says.