There have been two questions hanging on everybody’s lips in the northeast in recent weeks. The first is whether Kevin Keegan, the city’s returning sporting messiah, will revive Newcastle United’s football fortunes. The second is whether the deal being cobbled together by Gordon Brown, Goldman Sachs and Sir Richard Branson (or another private buyer), can revive Northern Rock.

In football a new manager either wins or he doesn’t. The victims of failure are the owners and supporters. In banking it is more complicated. Northern Rock’s name may adorn Newcastle’s football shirts but every taxpayer in Britain has a vested interest in what emerges from the wreckage. Tomorrow Alistair Darling will announce that Bank of England loans to the troubled bank of about £25 billion – taxpayers’ money, let us not forget – will be converted into government-backed bonds to be issued to investors.

This may sound like arcane financial engineering. What it means is much more significant. Something that began life as a temporary support operation to see Northern Rock through its difficulties has become a long-lasting liability which will be on the government’s books for years. Add the guarantee to Rock depositors, worth about £30 billion, and taxpayers are up to their necks for a cool £55 billion. That is more than the Treasury raises annually in corporation tax from every company in Britain and exceeds the defence, transport and environment budgets combined.

It goes without saying that taxpayers should not end up footing the bill for Northern Rock. But the omens are not good. Both prime minister and chancellor have been reticent in offering guarantees that taxpayers will not lose money. Mr Darling’s statement will bear close scrutiny. There has already been a significant shifting of ground. Late last year the Treasury was insisting that any private buyer of the bank should immediately pay off £10 billion to £15 billion of taxpayer loans. Now, with Mr Brown desperate to avoid nationalisation at all costs, this condition has been relaxed. Taxpayers will have to wait longer.

Is the Northern Rock deal the best available or has it been constructed – as Vince Cable, the Liberal Democrat Treasury spokesman, put it – to save political face? Nationalisation is rarely a good answer to anything but Mr Cable’s charge has to be answered. As things stand, the government is taking on a substantial chunk of the bank’s liabilities while leaving the assets – and any upside from the business – to private buyers. The fact that Mr Brown has been swanning around China this weekend with Sir Richard does not reassure.

The wider political significance has yet to play out. While Mr Brown was winning easy plaudits for his handling of foot and mouth, flooding and a failed terrorist attack last summer, a bigger crisis was getting under way. Northern Rock fell between the Bank, the Treasury and the Financial Services Authority, the City watchdog. When a private sector deal was a possibility and Lloyds TSB was mooted as a buyer, the governor of the Bank and the chancellor rejected it as unthinkable to support such a deal with government loans and guarantees. Yet that is exactly what is happening now. Above all, it was hard to see who was in charge in those few crucial weeks when Northern Rock turned from a drama into a crisis. Mr Brown, who is supposed to know about these things, certainly was not.

Whether Northern Rock turns out to be pivotal for the government depends on the wider economic outlook. The storm clouds have been gathering but it is still not clear if this is more than a sharp but necessary slowdown, from which the economy will recover after a few months, or something that will be lasting and painful for families and businesses around the country. If it is the latter, the botched rescue of the troubled bank will be remembered as its symbol. The government’s reputation for economic competence will have foundered and sunk on the Rock.