LONDON: Britain will nationalize Northern Rock, the mortgage lender that nearly collapsed in the global credit crisis last year, after bidders failed to meet the governments terms, officials said Sunday.

Alistair Darling, the chancellor of the Exchequer, said during a press conference that the government would undertake a “temporary” takeover of the banks operations after revised bids from Virgin Group and the banks own management team failed to meet the demands of officials, who feared that taxpayers would be stuck with billions of pounds in losses.

Darling said neither a proposal from Richard Bransons Virgin Group nor an in-house management team delivered “sufficient value for money to the taxpayer.”

The government has said more than 25 billion, or $49 billion, in government loans made to the bank in September must be paid back within three years.

“Taking into account the wider considerations, Ive concluded this is the right approach,” Darling said during the news conference.

“It is our belief that the company can be moved back into the private sector at the earliest and most prudent opportunity,” he said.

Northern Rock ran into trouble in September because it relied too heavily on short-term money markets for funding instead of on deposits. A subsequent profit warning and appeal to the Bank of England for an emergency loan led to the first run on a British bank since 1866.

The government had been in the middle of an auction process to find a private buyer for Northern Rock, with revised bids submitted over the weekend by Virgin and the in-house management team.

Darling had a deadline of March 17 to chose between the bids and nationalization. That is the date when he must submit a restructuring plan to the European Union for state aid approval.

A corporate troubleshooter, Ron Sandler, has been appointed head of the newly nationalized bank, Darling said.

Sandler, a former head of Lloyds of London insurers, is regarded as close to Prime Minister Gordon Brown. He also has previously helped the Treasury on pension policies.

Northern Rocks problems started in the summer. On Aug. 9, the European Central Bank pumped a record \94.8 billion into European money markets after BNP Paribas froze withdrawals on funds hit by U.S. subprime market crisis.

On Sept. 14, Northern Rock said the Bank of England had stepped in to provide support. The banks shares plummeted more than 30 percent despite reassurances from regulators the lender was not bust.

Three days later, the government stepped in to guarantee deposits at Northern Rock in a bid to stop the run.

On Thursday, Britains government asked Virgin and the banks own management team competing to rescue the large mortgage lender Northern Rock to improve their competing offers to avoid a nationalization.

The Virgin consortium had been told it was the front-runner, ahead of the rival offer from the banks management team.

Both, however, had been asked to offer better terms, as the government preferred a private deal but saw public ownership as a better option for taxpayers. Darling said the shares would be suspended Monday. The stock has fallen 88 percent since Sept. 1.

Manchester today experienced its sixth earthquake in a month, according to the British Geological Survey.

The tremor was felt in the city centre at 5.46am and measured 2.4 on the Richter scale, a spokesman said.

“Much of the reports were of rumbling and faint shaking. Some people said their beds rattled and moved. One person said a building creaked. An earthquake that size doesn’t do damage,” he said.

There are around 200 earthquakes a year in Britain, according to seismologists, but only about 25 are felt by people. They rarely produce anything other than minor damage.

In April an earthquake measuring 4.3 shook parts of Kent, leaving one woman with head injuries, cracking buildings and toppling chimneys.

An earthquake measuring 2.5 was felt in Manchester on August 10. The city was hit by a series of tremors five years ago.

The British government on Sunday announced the nationalization of Northern Rock, which owes the government some 25 billion, or $49 billion.

The following are key dates in the banks troubles:

Aug. 9, 2007 - The day pinpointed by regulators and Northern Rock itself as the date “the world changed.” The European Central Bank pumps a record \95 billion, or $139 billion, into European money markets as credit dries up and BNP Paribas freezes withdrawals on funds hit by the collapse of the U.S. subprime mortgage market.

Sept. 14 - Northern Rock says the Bank of England has stepped in to provide support, triggering the first run on a major British bank in over a century, despite reassurances from regulators that the lender is not bust. The banks shares plummet more than 30 percent.

Sept. 15 - Customers besiege the bank, ignoring official reassurances.

Sept. 17 - The government steps in to guarantee deposits at Northern Rock in a bid to stop the run.

Sept. 25 - Under pressure from the Treasury and regulators, Northern Rock cancels its interim dividend and confirms it is in “preliminary discussions with selected parties.”

Oct. 9 - Northern Rock gets another lifeline as the government offers to guarantee new retail deposits.

Oct. 10 - Northern Rock shares jump over 40 percent after SRM Global, a hedge fund run by a former UBS trader, Jon Wood, takes a stake of over 4 percent.

Oct. 12 - Richard Branson says Virgin Group wants to rescue the bank, heading a consortium that would inject cash and stabilize its finances.

Oct. 19 - Bryan Sanderson replaces Matt Ridley as chairman.

Nov. 16 - Adam Applegarth resigns as chief executive. He is later replaced by Andy Kuipers.

Dec. 7 - An investment group led by the veteran troubleshooter Luqman Arnold makes a long-awaited rescue proposal as the U.S. buyout firm J.C. Flowers pulls out of the bidding.

2008

Jan. 10 - Goldman Sachs says it is seeking investors in China and the Middle East to help fund a takeover.

Jan. 11 - Northern Rock sells a 2.2 billion portfolio of mortgages to JPMorgan Chase to help repay loans from the Bank of England.

Jan. 15 - Shareholders back proposals to curb some of the boards powers but stop short of forcing it to seek approval for any asset sales. The vote is forced by leading shareholders.

Jan. 16 - Northern Rock shares tumble more than 20 percent as Prime Minister Gordon Brown leaves open the option of nationalization.

Jan. 21 - The government announces plan to convert about 25 billion loaned to Northern Rock into bonds to smooth the way for a private sector takeover, but it also takes the lenders debts onto the public balance sheet, effectively tying taxpayers to the bank for years to come.

Feb. 4 - The deadline set by the government for final bids to be received from potential suitors.

Feb. 13 - The government tells two bidders, Virgin Group and the banks own management, to improve their offers.

Feb. 17 - The government rejects the bids, deciding to take Northern Rock into temporary public ownership.