( dpa ) - Troubled British bank Northern Rock is to be nationalized temporarily, British Chancellor of the Exchequer Alistair Darling said in London Sunday.
This would be the first time since the 1970s that a British company was nationalized. Speculation that Northern Rock would be nationalized had been rife for months.
The bank had got into trouble last September following the sub- prime mortgage crisis in the United States and had to be rescued by the Bank of England with an emergency loan of 25 billion British pounds (49 billion dollars).
Thousands of clients had then queued for days to withdraw their money from the bank. Customers could still make their payments as normal, Darling said.
Neither of two private proposals to take over the bank had made "sufficient value for money to the taxpayer," Darling said.
A consortium led by billionaire Richard Branson's Virgin Group and the management of the bank had shown interest.
Shares in Northern Rock are to be suspended on Monday morning. Nationalization is to be pushed though parliament with emergency legislation on Monday.
Darling stressed the measure was only temporary and the bank would have to return to private ownership in the long run.
Virgin chief Branson said nationalization was not the "right answer."
Ron Sandler, the former chief of Lloyd's of London insurance, has been appointed to lead Northern Rock. Sandler said he was pleased and nervous. The bank from Newcastle, north-east England, would continue to play a key role in the region, he added.
Media reports said that numerous jobs would be lost if the bank was nationalized. Northern Rock presently employs 6,500 people.