Jaw-dropping as it might sound, Britain is facing the possibility - small, but growing ominously - of another Northern Rock-style debacle.

The implosion of Northern Rock last autumn triggered a spate of soul-searching and policy proposals from bankers, regulators and ministers. The first British bank run in a century and a half must never be allowed to happen again, it was said, as the country's international reputation for banking prudence and solidity suffered a pummelling. Yet a mere nine months on, Bradford & Bingley is now straying uncomfortably close to the same precipice.

B&B shares, which were trading at 400p a year ago, sank another 19 per cent yesterday to 34p. Some hedge funds and other speculators are betting that the bank will fail. Some analysts estimate that the bank is valueless.

Fortunately, there has been little sign of depositors panicking. B&B is solvent. There have been none of the queues that sealed Northern Rock's fate. The rejigged official deposit guarantee system means the entire first £35,000 of any account is protected, making B&B a safe home for the savings of all but the biggest depositors.

Like Northern Rock, B&B has been hit by the tightening of credit in money markets. Like most of the world's banks, it was enticed into investing money in complex, opaque assets backed by US sub-prime mortgages. Unlike most banks, B&B has specialised in non-standard mortgages, lending mostly to buy-to-let landlords and to borrowers who were not asked to provide proof of earnings. No British bank has entered a serious housing market downturn with such an usual mix of assets. Time will judge if it was prudent to pursue the borrowers it did, and whether the Financial Services Authority was right to allow it do so. The jury is still out.

There is no such ambiguity over the way B&B's board and its advisers have conducted themselves as the credit crunch bit. It has been a story of self-delusion, denial and incompetence.

First, the bank denied it needed fresh capital. Then it changed its mind. Then it allowed those who had acted as guarantors to its first attempt at capital-raising to wriggle out of their promises. Then it allowed the lead rescuer behind a second attempt at capital-raising, the US private equity firm TPG, to walk away.

Now a third rescue attempt has been tabled, which should inject £400 million of fresh capital into the stricken bank by the end of August, toughening up its balance sheet and giving it months more breathing space. But even now, poor wording of the deal announcement has left many outsiders doubting whether that £400 million really is committed this time.

If, as regulators and bankers are claiming off the record, nine of the biggest financial institutions in Britain really have irrevocably committed to underwrite this cash injection, they should say so explicitly. If necessary, the FSA should force them to say so. Better still, it should ask them to place the cash in a ring-fenced account now. This is not a time for timid half-measures.

Taxpayers ended up underwriting the Northern Rock bill. This time it is the City that must step up to the plate, unambiguously and irrevocably. There must be no possibility of ducking out a third time.

Six weeks is an awfully long time in these jittery markets. Time and ambiguous drafting are the enemies of confidence. There has been too much kowtowing to the notion that shareholder rights are sacred, and not enough muscle of the kind that the US Treasury has demonstrated in making sure that banks recapitalise. Only the immediate re-establishment of confidence in B&B by the FSA and other City institutions can save it from the fate of its northern neighbour.