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Sandler and Rock nationalisation

• Robert Peston
• 12 Jan 08, 12:59 PM

If anyone doubted that the Treasury is serious about taking control of Northern Rock, were a commercial rescue to prove impossible, those doubts must now be dispelled.

The recruitment of Ron Sandler to be executive chairman of a Treasury-controlled Northern Rock shows that a full plan for nationalisation of the troubled bank is in place.

Mr Sandler a former chief executive of the Lloyd's of London insurance market, is well known to the Prime Minister, Gordon Brown, and has done lots of the work Treasury as an adviser.

All of us as Taxpayers are exposed to the Rock to the tune of 拢55bn through direct loans made by the Bank of England and guarantees to other lenders made by the Treasury.

On Tuesday, recalcitrant shareholders risk annoying the Treasury by voting to restrict the ability of the company's board to sell assets.

Shareholders are voting too on whether the newish chairman, Bryan Sanderson, and some recently recruited non-executives should remain in place.

If they were voted off, the Treasury would regard that as a sign that the company is now ungovernable - and that nationalisation had become the least worst option.

A decision will also be taken imminently by the Treasury on whether competing proposals for a commercial solution to the Rock's ills are worth pursuing.

The Chancellor would prefer not to take this business into formal public ownership.

But if all the competing deals turn out to be either impossible or prohibitively expensive, Mr Sandler would find that he had taken on a huge and challenging job.

That momentous nationalisation decision is probably only days away.

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