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Vow to protect taxpayer cash

Chancellor Alistair Darling says he will veto offers that fail to safeguard taxpayer-funded loans made to Northern Rock.

Private equity firm JC Flowers has tabled an offer understood to include a nominal offer for the firm and a guarantee to repay its £25bn in emergency funding and £1bn to support new business growth.

In Parliament on Monday, Darling said it would be wrong to dismiss any proposal without proper consideration but he “fully expects to get back” money lent by the Bank of England.

Virgin is looking to acquire Northern Rock and repay £10bn of borrowing immediately and the rest later via a funding syndicate and Olivant led by former Abbey chief executive Luqman Arnold. He wants to take a stake but bring in his own management team. US private equity firm Cerberus has ruled out a bid. It is believed to have been put off by market turmoil and credit-related losses at GMAC in the US in which it has a 51 per cent stake.

Dutch bank ING is expected to outline proposals this week.

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