Darling statement on Northern Rock

LONDON (Reuters) - Britain's Chancellor Alistair Darling announced on Sunday the government was nationalizing mortgage bank Northern Rock NRK.L.

Here is the full text of his statement, as reported on the Treasury Web site.

"I would like to make a statement on the Government's decision on the future of Northern Rock. I am doing so today because it is necessary to make a formal announcement before the markets open tomorrow morning.

The Government has now completed its review of the two detailed proposals on the table. We have made our choice after considering all proposals.

Last autumn, the Government stepped in to save Northern Rock to stop its problems spreading to other parts of the banking system.

But in current market conditions, we do not believe that they deliver sufficient value for money for the taxpayer.

So the Government has therefore today decided to bring forward legislation to take Northern Rock into a period of temporary public ownership.

We have done so after full consultation with the Bank of England and the Financial Services Authority.

Northern Rock will continue operating as a bank on a commercial basis. It will be open for business as usual tomorrow morning and thereafter.

Importantly savers' and depositors' money remains safe and secure.

The Government guarantee arrangements I announced last year remain in place and will continue to do so.

Borrowers will continue to make their payments in the normal way.

Our financial adviser Goldman Sachs has concluded from a financial point of view that a temporary period of public ownership better meets our objective of protecting taxpayers.

The bank will be run at arm's length and on a commercial basis. I will appoint Ron Sandler as Executive Chair to run the bank.

I will also appoint Ann Godbehere, former Financial Officer at Swiss Re, as Chief Financial Officer.

The Financial Services Authority continue to assure me the bank is solvent. It believes that Northern Rock's mortgage book is of good quality. And the FSA will also continue to regulate the Northern Rock.