MPs must admit the real cost of the Northern Rock crisis, says damning report

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The MPs' inquiry also savages the role of financial watchdogs in the affair, accusing them of a "systematic failure of duty".

And it issues a thinly-veiled rebuke to the Bank of England's deputy governor and head of financial stability, Sir John Gieve.

He has already been accused by MPs of being "asleep in the back shop" when the Northern Rock crisis erupted.

The Treasury Select Committee report published today says future holders of the role "should have credibility in the financial markets".

Labour has been accused of offering a "blank cheque" in the biggest ever Government bail-out for a private firm.

Gordon Brown insists taxpayers will get their money back and could even turn a profit if the collapsed bank can be successfully revived.

But the select committee says taxpayers have a right to know now what their total exposure is under plans for Northern Rock.

The Tories claim it is at least £55billion, which they say amounts to a £2,000 "second mortgage" for every family in Britain.

In all, however, the deal could add up to £ 100billion in Government debt because the bank's liabilities will be effectively nationalised.

Alistair Darling: 'Failed to act'

Critics say the taxpayer is shouldering almost all of the risk, while a takeover by Sir Richard Branson's Virgin group or another private firm will see them creaming off at least 90 per cent of any profits.

The MPs say the Treasury must reveal "promptly and fully" the extent of the Government's liabilities and update Parliament quarterly on the changing scale of taxpayers' commitment.

The report is scathing about the failure of the Treasury, the Bank of England and the Financial Services Authority to offer guarantees to worried Northern Rock customers more quickly.

It was a "serious error of judgment" that no plan had been drawn up in advance to deal with such a crisis.

The FSA completely failed to spot the bank's 'reckless' business plan. Labour chairman of the committee, John McFall, said: "The FSA appears to have systematically failed in its duty."