Rock could be nationalised - Brown

Speaking after rebel shareholders failed in an attempt to gain a greater say in the future of the mortgage lender, the Prime Minister confirmed that the Government was now actively considering the option of taking it into public ownership.

Although "a number" of private companies had expressed an interest, the move may be necessary to protect the British economy, Mr Brown said in an interview for ITV News at Ten.

"Because stability is the issue we will look at every option and that includes taking the company into public ownership and then moving it later back into the private sector," he said. "So that is, yes, one of the options that has got to be considered."

Earlier, investors in Northern Rock rejected three out of four resolutions put forward by its two biggest shareholders.

Hedge funds SRM Global and RAB Capital had wanted to restrict the board's ability to issue shares and sell assets at knockdown prices. However, the board had warned that the proposals could hinder a rescue of the ailing firm, and make nationalisation even more likely.

The resolution passed at the Extraordinary General Meeting limits the board's ability to issue shares, although Northern Rock said this would not represent an "additional material restriction" to a rescue.

The bank's chairman, Bryan Sanderson, said he would work "tirelessly" to find a solution to its current difficulties, but acknowledged the support that the rebel motions had attracted.

Shadow chancellor George Osborne responded to the news by restating his view that nationalisation would represent a "major failure" for Government policy.

However, he did not entirely rule out the Tories supporting such a move in Parliament if it was considered necessary.