Chancellor Alistair Darling has announced that the Northern Rock bank is to be nationalised. Ministers have decided that bringing the bank into public ownership is the only way to ensure its long-term stability.
The nationalisation is being described as a temporary measure, and comes despite plans for a management buyout, or a takeover by the Virgin Group.
GRAHAM GODDARD, UNITE DEPUTY GENERAL SECRETARY
Unite is demanding that the government give clarification on the long-term job security, terms and conditions and pension protection for staff.
Unite wants a commitment to no compulsory redundancies and, in case of any voluntary redundancies, for workers to be compensated at the same level as our European counterparts.
Throughout this crisis, the workforce has been committed to the future of the company and they deserve recognition for this.
We will oppose any attempt to asset strip Northern Rock.
CBI DIRECTOR GENERAL RICHARD LAMBERT
It is critically important that state ownership of the bank should not be allowed to distort the savings market, through access to government funds on favourable terms. In the meantime, the banking industry will work with the company for payment and other purposes.
Northern Rock has revealed very serious shortcomings in our regulatory system and in our approach to dealing with troubled banks. The consultations now under way to correct these failings are of vital national importance
SIR RICHARD BRANSON, VIRGIN GROUP BOSS
We have tried our best to save the Northern Rock and the jobs of the staff.
We put all the resources of Virgin's senior management team on this for five months and we believe had a very strong proposal, an experienced team and one of Britain's best brands.
We believe nationalisation is not the right answer and that a commercial
solution would have been the best way forward."
SHADOW CHANCELLOR GEORGE OSBORNE
After months of dither and delay we have ended up with this catastrophic decision.
We now have the situation where the government will be making decisions on whether or not to foreclose on people's loans in a falling housing market.
LIBERAL DEMOCRAT TREASURY SPOKESMAN VINCE CABLE
Belatedly the government has made the right decision.
The first priority must be to work out the seriousness of the problems at the bank with an independent audit of its loan book.
This must be conducted under the auspices of the Bank of England, not the Financial Services Authority.
Secondly, the bank must stop irresponsible lending at more than the value of property, and aggressive deposit-taking.
Thirdly, there will be difficult times ahead, especially for the employees, as the bank is downsized. However, there is now hope for the long-term future of the bank when it is eventually sold in more satisfactory conditions.
ROBIN ASHBY, NORTHERN ROCK SMALL SHAREHOLDERS' GROUP
I'm shocked and appalled. Nationalised industries do not run very well at all.
I thought that there was a good offer made by the management of Northern Rock as recently as late on Friday night and that seems to have been brushed to one side with this rush into macho politics.
We've had far too much of that throughout the Northern Rock saga.
Originally the burning embers were inflamed by the petrol of government publicity poured on it, and we've gone right the way through to this disastrous announcement today which I think is going to do irreparable damage to Britain's reputation as a financial services sector.
MATTHEW SINCLAIR, TAXPAYERS' ALLIANCE ANALYST
This is a debt that no one in the private sector wanted, even when the Government offered it in a heads you win tails we lose deal.
The government has left the taxpayer saddled with billions of risky debt that no one else would touch.
Taxpayers could now end up paying a very high price for the government's incompetence.
ANGELA KNIGHT, BRITISH BANKERS' ASSOCIATION
What I would like to see now, and the industry would like to see now, is that this ceases to become something of quite such general interest, important though it is, and we can move forward into a more stable and calmer environment than that which we've had for the last few weeks or months.