Gordon Brown, the British prime minister, has suggested that Northern Rock may be nationalised after the private bank showed signs of trouble following the global credit crunch.
Explaining that public ownership would be a temporary measure until it could be moved again to the private sector, he said all rescue options were still on the table.
"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 told Britain's ITV news on Tuesday.
"So that is, yes, one of the options that has got to be considered."
The government, which has final say on a solution, has made it clear that nationalisation remains an option if private buyers fail to raise enough funds to immediately repay the more than $49.3bn that Northern Rock has borrowed in emergency loans from the Bank of England.
Shareholders' bid
The move came as Northern Rock shareholders failed to stop the bank's board from finding a private buyer as it tried to reach a rescue deal.
The bank's stakeholders, hedge funds SRM Global and RAB Capital, sought to restrict a possible sale, fearing that the board might succumb to political pressures, but fell short of the necessary votes.
A government takeover of Northern Rock means shareholders could be left with very little, or nothing, of their investment.
Alistair Darling, the finance minister, said on Tuesday that a private sale was the preferred option but did not rule out nationalisation.