Fears over taxpayers swallowing £2bn cost of 'nationalising' Northern Rock

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Alistair Darling has drawn up contingency plans to bring the stricken bank under state control to protect the Bank of England's loan to Northern Rock.

Amid growing alarm over the scandal, the Chancellor revealed yesterday that the loan had risen to £24billion - twice the money spent on schools and more than four times Britain's overseas aid budget.

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Fiasco: Taxpayers could end up paying for the Northern Rock disaster

Taxpayers face the prospect of paying at least £2billion to cover interest payments on the loan, after potential bidders were said to be pressing the Government to waive the bill.

Mr Darling met City chiefs yesterday to calm fears that the crisis would result in a 'knee-jerk' tightening of accounting rules.

Officials insisted that nationalising Northern Rock was one option to safeguard the Bank of England money - but it was far down on a list of scenarios.

The revelation about the contingency plans came in a letter to the Liberal Democrats.

Vince Cable, the party's acting leader, said taxpayers would want a guarantee that the Bank of England's money would be paid back in full, including interest.

"It is simply unacceptable for the Chancellor to cover up the sheer scale of payments being made to Northern Rock when it can offer no guarantee that this money will ever be repaid," he said.

"We are now in an absurd situation where banks can take ludicrous gambles with their customers' money, knowing that if it all goes wrong the taxpayer will bail them out."

The Chancellor announced last night that the Government will issue a statement of the principles governing its approach to any Northern Rock takeover bid within days.

• A rise of up to 677 per cent in the stamp duty bill on many house sales has contributed to a market logjam, it was claimed yesterday.

According to research by Capital Economics, the phenomenon, coupled with other factors, has led to a fall in the number of homes changing hands each year.