Chancellor: "Transfer of Northern Rock added to national debt"
The transfer of liabilities of the Newcastle-based Northern Rock and Bradford & Bingley to the national balance sheet is one of three measures which has had a "significant impact" on the public finances, George Osborne told Parliament in his Autumn Statement - adding £17bn to the national debt.
A report by the financial watchdog the National Audit Office says the Government bail out of Northern Rock could cost the taxpayer £2bn.
The Government spent £1.4bn on taking the troubled bank into public hands in February 2008. At the end of last year it sold part of the bank to Sir Richard Branson's group Virgin Money for £747m.
But the National Audit Office says that deal could cost the British taxpayer £480m and the total cost could get as high as £2bn in the long term. Robin Ashby of the Northern Rock Small Shareholders Group says the Government sold it off too soon.
But North East financial analyst Gary Fawcett of Brewin Dolphin said the Government had no choice.