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Last Updated: Thursday, 10 January 2008, 12:27 GMT
Private Rock sale is 'desirable'
Alistair Darling
Mr Darling was also questioned by MPs in October
UK Chancellor Alistair Darling has said that a private sector solution to the problems at troubled lender Northern Rock would be "highly desirable".

His comments were made to the Treasury Select Committee while discussing the government's handling of Northern Rock and its plans for the bank's future.

He said that possible nationalisation would be a stepping stone to a sale.

The taxpayer has a 57bn exposure to the Rock through direct loans and guarantees for other lenders.

However, he underlined the government's position that all options for Northern Rock were still on the table, including nationalisation and a sale to a private company.

But he added that it was not surprising that it had been difficult to find a private sector solution, "given the current economic climate".

February deadline

Mr Darling was asked why he had given a newspaper interview outlining his plans for legislation to give greater powers to the Financial Services Authority.

He explained that he wanted to enact legislation in the current parliamentary session and that would require him to publish proposals by the end of January.

The committee chairman, John McFall, said that he would try to publish some of the committee's findings in time to influence the chancellor's proposals.

The chancellor said the legislative response to the Northern Rock crisis had to be "proportionate".

He stressed the need to avoid what had happened in the US, where the action taken after the collapse of Enron led many companies to move their business overseas.

He described the US Sarbanes-Oxley Act as: "an example of getting it very wrong".

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