Small investors fret at being kept in dark

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Roger Lawson, director of the UK Shareholders Association which speaks for small investors, said "The directors of Northern Rock should surely account for their failure to anticipate the funding problems.

"Questions need to be asked why investors were not told at an earlier stage about the nature of the problems, and about whether the wording of the fateful announcement on 14 September, that caused both depositors and investors to panic, contributed to the crisis."

He accused the bank of refusing to comment on rumours in the press in early September that it was about to issue another profits warning. He said: "No news usually means good news as a company has an obligation to issue price-sensitive news. "

About 800,000 members of Northern Rock received an average of 500 shares worth 452p each at the time of demutualisation. Early this year, those shares had almost trebled in value to 1250p but today they are worth barely half their issue price.

Lawson said the bank's outlook "for the business was probably much worse than indicated by the nominal profit forecasts in the announcement because the Bank of England's conditions for support were expensive, and the withdrawal of depositors' funds would compound the company's difficulties".

He also called on the rules governing banks' and building societies' levels of capital adequacy to be reviewed. He said: "The money markets being used by Northern Rock as a major source of funding seem even more fickle than retail depositors."