Branson - but not at any price, please

Again, Treasury officials, driven forward by an ever-anxious Chancellor Alistair Darling wanting to push through a sale, have been caught by a problem that you could be forgiven for supposing they might have foreseen. This time, it's the need to repay the £25 billion of Government-guaranteed bonds within three years and not five, in order to comply with EU rules forbidding the granting of state subsidy.

For Luqman Arnold, an investment banker by training, that was too short a period to take over the ailing bank - and presumably discover all sorts of gremlins that might lie within - give it a kick, reshape and rebuild it, and all against a background of a depressed market. His Olivant team has gone, leaving a management plan based on downsizing the business and cutting the North-East workforce, and Sir Richard Branson's Virgin, once declared the preferred buyer and now seemingly the leading bidder again.

There is, of course, a third option - nationalisation - but Darling gives the impression of wanting to avoid that at all costs. No, with him, the suspicion must be that despite the Treasury's professed shock at Arnold's departure, he is not too perturbed. He never wanted Arnold to enter the fray anyway - the Government had already anointed Branson, only to have to afford Arnold equal status.

Shareholders may huff but Olivant's decision to quit can be blamed on the involvement of the EU, always a convenient get-out for a British politician under fire.

Today, Branson will be wearing his trademark smile - his most feared competitor has left the race. The taxpayer must hope that in his desire to offload the bank, Darling doesn't now give it to him on a plate.