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Chancellor to only support NR proposal which protects depositors and tax-payers

The Chancellor has reasserted that the Government would only support a proposal for Northern Rock that protects the interest of the depositors and the tax-payers in the House of Commons yesterday.

Alistair Darling told MPs that the government-backed loans given to the bank – worth around £24bn – must be repaid.

He said: “The Government has a clear duty to protect the public interest and we will do that.”

“It is in the interests of everyone that the situation with regard to Northern Rock is resolved as soon as possible. It would be quite wrong to dismiss any option now without propoer consideration as some suggest. I continue to believe it is right to use this time to explore the best outcome for the company and the public interest.”

But shadow chancellor George Osbourne pointed out that the fallout from the crisis got worse each week.

Darling said that deposits of savers would continue to be fully guaranteed but that if the situation was set to change plenty of notice would be given.

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