She says the Government passed responsibility for monitoring to the FSA, which failed to spot the building crisis.
Dunleavy, who is to stand as a Conservative candidate for Bolton North East at the next election, says the Chancellor’s late intervention was purely politically motivated, drawing parallels with last year’s Farepak meltdown where the Government did not intervene.
She says the Government is now left with the three “poor” choices of either nationalising Northern Rock or selling at an undervalued price, both costing the taxpayer “billions”, or letting it go bust.
She says: “The Government’s handling of the Northern Rock crisis has been a disgrace. This situation should never have arisen. The FSA should have identified it before it happened. The financial services industry has suffered with compliance for years and yet here they are caught cat-napping when it really matters.”