The Government has put Northern Rock up for sale, with reports suggesting the nationalised bank will be valued at £1bn.
Chancellor George Osborne (pictured) confirmed plans in his Mansion House speech in London last night.
Osborne said a sale process was likely to generate “substantially the best value” for taxpayers.
He said: “On behalf of you the taxpayer, I have decided to put Northern Rock up for sale.
“Any interested parties can bid for it, including mutuals, which this Government is actively committed to promoting.
“This does not mean that other options to return Northern Rock to the private sector have been ruled out.
“But the independent advice I have received is that a sale process is likely to generate substantially the best value for the taxpayer and should be explored as a first option.”
The Chancellor said Northern Rock Asset Management, the separate “bad bank”, will continue to be owned by the state as its assets are “run down over time”.
He also sought to assure insurance companies they would not be treated in the same way as banks under the new regulatory regime.
He said: “I’ve heard your argument that insurance companies face different risks, so I can announce that we will set a specific statutory objective for them.”