( dpa ) - The British government confirmed plans Monday to back a private sector rescue of troubled mortgage lender Northern Rock, which critics have said amounts to "partial nationalization" of the bank.
In a statement to the London Stock Exchange, the Department of the Exchequer said that up to 25 billion pounds (50 billion dollars) given to Northern Rock by the Bank of England in loans last September will be converted into government bonds.
Analysts said the proposal would mean that the government would end up owning part of the bank.
Alistair Darling, the Chancellor of the Exchequer, was due to make a statement on the proposals in parliament later Monday.
The plans, drawn up by investment bankers Goldman Sachs, would mean the converted government-guaranteed bonds would be sold off in small parcels to investors over a period of time.
In effect, the guarantee for the bonds means that the British taxpayer would finance the bank for up to five years, or until financial markets recover.
Richard Branson's Virgin Group and the investment firm Olivant have presented proposals for the takeover of Northern Rock, which hit trouble as a result of the sub-prime lending crisis in the US last September.
The firms have until February 4 to detail their proposals.