Alistair Darling defends decision to keep bank loan secret

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If the loan had been made public it could have "seriously jeopardised" the stability of the entire UK financial system, he said.

Because of this fear, he decided any disclosure of the loan was "not in the public interest".

Mr Darling's justification for keeping the loan secret comes ahead of an emergency statement to the Commons later today.

Ministers will explain to MPs the situation which saw the Bank of England forced to lend the money at the height of the financial crisis in October last year.

Yesterday Bank of England Governor Mervyn King told MPs on the Treasury Select Committee the Bank stepped in as a lender of last resort just weeks after the collapse of Lehman Brothers to buy time until the Government could take action.

In a written ministerial statement today Mr Darling said: "The Bank's assessment at that time was that it was vital that their emergency liquidity assistance operations remained confidential, and that any disclosure or leak of the operations would seriously jeopardise the financial stability of the system as a whole. I shared this assessment."