Reaction to Northern Rock nationalization

LONDON (Reuters) - Britain's government has said it will nationalize Northern Rock Plc NRK.L -- the first major nationalization in decades and a decision that has provoked intense reaction. Following are comments on the move:

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POLITICAL REACTION

GEORGE OSBORNE, CONSERVATIVE SHADOW CHANCELLOR:

"This is the day when Labour's reputation for economic competence died. Gordon Brown has dithered his way to the disaster of nationalization.

"Now the taxpayer will bear the full risk of lending 100 billion pounds of mortgages in an uncertain housing market. We will not back nationalization."

VINCE CABLE, LIBERAL DEMOCRAT SHADOW CHANCELLOR:

"Belatedly the government has made the right decision.

"The first priority must be to work out the seriousness of the problems at the bank with an independent audit of its loan book.

"There will be difficult times ahead, especially for the employees, as the bank is downsized. However, there is now hope for the long-term future of the bank when it is eventually sold in more satisfactory conditions."

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BUSINESS REACTION

MERVYN DAVIES, CHAIRMAN OF UK-LISTED BANK STANDARD CHARTERED

(STAN.L):

"It's been a well publicized problem but I think in the end it's the right solution.

"I think the government had choices here and at the end of the day it is trying to safeguard taxpayers' money."