The problem is that the government says its loan is secured on assets - ie mortgages against houses.

But those houses as we all know are vastly overvalued. In the coming house price crash these houses might end up 50% down. That means NRs assets aren't nearly so big. The government is lending billions of our money with very dodgy security being offered in return. This is the reason no commercial enterprise will lend to NR - it is just too risky, and they do not have enough assets to match their liabilities. In effect they are insolvent - by billions of pounds.

MG, London, UK

What i cant understand is why they werent just put on the market. If they had been dissolved into another larger brand, for example lloyds, there would be no need for the tax payer to have anything to do with it whatsoever. when the Northern Rock sinks again in 5-10 years time, the board will probably take some disgustingly massive redundancy package, sorting them for life and live happily knowing that they have ripped off every hard working tax payer in the country.

Max Dennis, Truro, Cornwall

As Peter of Brisbane points out, the stroke of genius in apparently embracing free-market tenets in outsourcing responsibility for nominal control of interest rates has allowed the option of taking that back if a pear-shaped situation were to develop, possibly in exchange for some or all blame.

Students of political evolution will note how a more dynamic approach can assist in suitably confusing convergence of any game theory aspects, including fair and sometimes zero-sum, reverting to old fashioned party favourites such as musical chairs and pass-the-parcel, where some control of auditory accompaniment can assist any winning solution.

dr venables preller, Warminster, UK

Why didnt the government bail out my company? They made me go under for a grand total of £1100.27

Len, Argyll, scotland

This is madness, a private bank being subsidised in effect by the tax payer? Surely this is illegal under EU law? It's no different from failing airlines, car makers or other businesses being propped up by tax payers money which should not be being used in this way. This bank and it's directors are to blame for this and they're greed and incompetence is NOT the fault of the tax payer. Browns policies as chancellor of the exchequer should also be looked at. Poor Darling, obviously he hasn't got a clue what to do about this and you can be sure that Gordon Brown will be running off to hide somewhere in order to make sure he is not implicated in the mess to come!
£24 billion of taxpayers money whilst local post offices are closing down everywhere we look, people pulling their own teeth out because they can't get dental treatment and Brown and his cohorts are doing this!

ed, wembley, middx

What's your definition of a plunge? Surely a 2% drop is a glide at worst? Using crazy adjectives when random variations of 2% are not uncommon is unhelpful.

Bern, Southampton, Hampshire

i found it scandalous that British Taxpayers have to pay for a private, profit driven Bank. The British governement reacted quickly to help bakers but does not react to help Nurse, teacher, doctors, firemen, civil servant.
Doesn't this means that the governement is not working for you, Bristish people, but more for some obscure force, that have contrary interest of yourself and your country ?

Philips, lignières la carelle, France

Is the headline a tad misleading here? "To" perhaps ought to read "may have to"?
The same scaremongering journalism caused run on the bank and will cause the property market to crash.

John M, Coalville, UK

1. Northern Rock - £24 billion, but almost likely to be nearer £40 billion (Observer)
2. Foot and Mouth Disease – Cost to the nation, at least £20 billion (Economist)
3. Defence – MOD overspends over a decade - £6 billion (NAO)
4. Underestimated NHS IT System - from £6.3 billion to most probably £40 billion but still will not work when completed (senior civil service quote)
5. National asylum IT System – Scrapped at a cost of £77 million (NAO)
6. Identity Cards – Initially estimated at £1 billion, now to cost up to £30 billion (Times)
7. Child Support Agency IT System – £1.72 billion remains as debt or uncollectable (WPC)
8. The Tax Credit System IT System – £100 million lost (HMRC)
9. Passport Office IT System – £12 million (NAO)
10. Defence IT System DII – initially £4 billion, now £5 billion (parliamentary questions to the secretary-of-state)
11. Iraq War - £ 7Billion
etc,
The list of the government's and their adviser's ineptitude is endless

Dr David Hill
The WIF
Bern, Swiss

david hill, bern, Switzerland

Well, Brown made the Bank of England less independent by taking some of its powers and handing them to the FSA. Then Brown took away more powers and gave them to himself. So, all in all, this fiasco has Brown's fingerprints all over it. Can we expect him to resign? Poor darling - the whole world knows he has to clean up Brown's mess and he'll get no thanks for the job. Had Brown left the BoE well alone, none of this would have happened as a quiet, behind-closed-doors solution would have been found for Northern Rock to survive and carry on. But that would smack of too much democracy.

Bobby, Cheltenham, UK

the problem is not that the govt supported nr, but rather that they left it too late. once panic starts, it's hard to reverse. anyone asking for their deposits back after they were guaranteed is a dangerous idiot, though. it's lack of confidence, not a sick business, that has made the nr share price fall (not that we should be concerned about the share price; it is right that shareholders take the risk).

darling is way out of his depth. but even he knows it would be meaningless to give a guarantee that the loan would be repaid. how can he? he is not in a position to control nr's losses or to make good any shortfall. he can only hope (with the rest of us) that the housing market holds up.

it is wrong to compare the loan to nr's net worth. net worth assumes the loan is repaid. every bank in the country has borrowed more than its net worth. what matters is the quality of assets. which look good as long as interest rates don't rise (they will fall "independently").

jem, london, uk

I think Mr. Darling will live to regret his knee jerk reaction to support Northern Rock, as will taxpayer's! Are we to believe taxpayers are to pick up the tab for all badly managed companies? He reacted out of panic and I believe WE will end up paying the final price of his incompetence. Hopefully this will be the final nail in the 'New Labour' coffin and good riddance to them!

Rod Ballard, Leicester,

I wish that we could hear a little more indignation at the huge number of wasted governmental ventures, the funding for which falls to us taxpayers. I don't expect that we shall see all of our money back but at least this is better than the alternative of allowing NR to fall. Good to see that, as usual, the FSA remains calmly aloof from this bloody mess.

Jeff, Lincoln,

"Taxpayers to foot the Northern Rock bill" said your headline.

This sort of sensationalism goes much too far. Many readers may naturally have taken it to mean that the affair will cost us taxpayers the whole GBP24bn.
Unless property prices fall to zero, which will not happen (although Mr Darling cannot guarantee it), that's rubbish.
The headline is unworthy of the Times.

And by the way, you have not told us what became of the GBP24bn that in normal times the London interbank market would have re-lent to Northern Rock.
Presumably it is now on loan to the Treasury? If so, the taxpayer is presently doing very nicely.

johnflewis, Isle of Wight, UK

Browns only covering Northern Rocks back because its a profit making organisation. I'm sure that will be cold comfort for all the Firpack investors who only get £0.05 from every pound back. DONT THINK I'll ever vote labour again.

John, Glasgow, UK

This is a good chance for Labour to show us what it can do with N/R, but hopefully it will be better than what Brown did when he sold our gold cheap then bought dollars high.

Gordon, Derby, uk

I am pleased that the idiots of britain are to be slaughtered yet again by supporting labour

the present day british have no backbone
carry on labour.

George BNP

George deighton, london, uk

The way the share price is going,any would be buyer could pick them up in the marketplace for a song.

clive, Bristol,

Ref coment by NR about vaqlue to dshareholders of proposals: er, what are the shareholders doing exspecting any w]value at all? This bank is bust and the ~Govt's loan should stand ahead ot the shareholders. As it is, not only the depositors are getting bailed out, so are the shareholders. With my money. Nice one, darling.

Duncan, Knebworth,

Alaistair Darling's bio is full of good reading. First Railtrack and now Northern Rock. Is there no limit to a man's talents ?

PG, Woking,

Maybe us taxpayers should refuse to pay our taxes is they are only going to be used to help[ private companies rather than the faltering public service.
After all which is better - a cheap mortgage or good health care ?

Mark Gale, Vannes,

If an 'ordinary citzen' cost the Country 24 Billion pounds, then they would be put in prison and the key would be lost for a long time. What penalty will the N R Directors face ?
If Mr Darling can't protect the economy or non N R customers from this appalling fiasco he should resign, or be sacked, for the protection of the public.
Thank God I don't live in U K any more.

Riley, Kyiv, Ukraine

This is a scandalous waste of taxpayers money. (a) What on earth happened to the often said statement "leave it to the free market" . (b) So now we not only let the major shareholders of Northern Rock pay 0% tax because "they" are "taking a risky investment" , THEN when it becomes too risky we bale them out and let them dictate at what price the bank is sold at.
Are we mugs ,or are we mugs for letting imbeciles like Darling, Brown, Blair etc act in Government ?.
What mugs these people must think that us taxpayers are !!

John, Woking, UK

what? the country is getting worse by the minute! i thought it was just the immigration sideof things in this country looks like you get the whole package in this country...crap!

does anyone realise how hard it is for students who have just finished university and are trying to earn a full time living and trying to save so that they can build a nest for themselves? on top of that they have loans to pay off! not everyone is privliged as the MPs children who have everything paid for!

kiran, london,

Amazing. Northern Rock - bailed out. BCCI - compensated. Equitable Life - left for dead. Perhaps the spectre of senior civil servants and judges collecting a govt handout would have looked worse than a handout for the queueing Northern Rock commoners.

Tone, Acton,

Let's face it. The Chancellor is only going to be able to protect the publics money if he Nationalises.

I predict the Northern Rock is going to become the National Rock.

Abid, Shipley, UK

Looks like Blair got out just in time....2008 looks to be full of joy??

peter cunningham, Edinburgh, Scotland

Outrageous! Why should I, as a taxpayer, contribute to anyone who loses their money. The Northern Rock was a purely profit driven enterprise - so it should either be liquidated and its savers paid off or it should limp on unaided. These Directors should be held to account with more stringent regulation which ssould simply state that if you are negligent in your directorship you should suffer the consequences and not simply be allowed to resign and walk away. There is no accountability which is endemic throughout society - change this and you change the way society will operate beneficially.

JJ, Bristol,

Had this government not blocked the sale of the bank before all this happened, we would not be in this position at all. Brown and Darling have needlessly exposed the country to enormous debt for years to come.

Alan, Cheltenham,

The Government should never have got involved, NR is like a bucket with a hole in it. The BOE are pouring money in, but they do not control the size of the hole where the money is pouring out. The size of the hole will get bigger as the ordinary depositor who can withdraw the rest of their savings at a moments whim decides to go for a higher/safer return elsewhere. And what assets does NR have, apart from putting houses on finance, all the company cars will be leased, most of the underused branches are rented premises.. With telephone banking and the internet the branches are becoming obsolete,. In most business's profit made is retained to fund expansion and a rainy day, what has happened to all the profits, has it gone to bonuses, pension funding etc, The continued drop in the share price reflects what the bank is actually worth. Cash is King and will get harder to find, look how interest rates have gone up to investors, the BOE say rates will come down, The Earth is Flat.

Jim Taylor, Brittany, France

So the Treasury can lend £24 billion pounds instantly without any guarantees that they're going to get it back but when the Armed Forces are screaming for hospital beds and proper care for the wounded they ignore it.
Glad to see that the Government consistently sets low standards and then fails to achieve them.

Bry Barnes, Somerset, Uk

The Government was damned if it did not act and is damned because it did. The question should be 'why play the loans to banks out in public when there was no risk to savers and shareholders?' If the Government had not underwritten savers then there could have been a run on other banks which were highlighted to be vulnerable at the time.

sk, Eastbourne, East Sussex

This separates the masters of politics from the fall guys. Blair retires before the proverbial hits the fan, Brown is the main culprit in this debacle but neatly sidesteps into 10 Downing Street, leaving the little Darling to pick up the pieces. You have to admire the political skills of some and lament the ineptitude of others.

If the "independent" Bank of England doesn't play ball by coughing up the cash, they will just remove its independence - clever politicians can justify anything under the guise of pragmatism.

Peter, Brisbane, Australia

In order to protect jobs in a Labour stronghold, the British Government has effectively increased the national debt by about £400 per capita, ie per man woman & child. Or £4,000,000 per Northern Rocker.
And they have lent £24,000,000,000 to an illiquid bank with a market capitalisation of circa £560,000,000.
And it is all 'guaranteed' by a load of houses that could not be repossessed without causing immense social problems.
So everything is tickety-boo, unless house prices fall or interest rates rise. Good luck, Great Britain.

Tim C, Southern England,

Alistair Darling - I'll pay for you to go to college to learn about economics - my daughter teaches it very successfully to A-level. After that you're on your own.

Ian, Solihull,