The Conservatives described British chancellor Alistair Darling as "politically a dead man walking" yesterday as a bitter war of words erupted over the Labour government's decision to temporarily nationalise Northern Rock.
Shadow chancellor George Osborne led the charge after Conservative leader David Cameron suggested the prime minister Gordon Brown would have to move his chancellor once emergency legislation taking the troubled bank into "a period of temporary public ownership" has been rushed through parliament.
"He will have to move his chancellor. I don't think this chancellor has any credibility left and that's not good for the country and not good for the economy," said Mr Cameron, while Mr Osborne described nationalisation as "a monumental failure of government policy" that Mr Darling and Mr Brown had been "desperate to avoid".
Mr Darling hit back sharply, reminding MPs that the Conservatives supported the government's intervention last autumn, while accusing Mr Osborne of "cynical opportunism" covering "a pretty thin veneer of abuse".
Labour MPs also rallied as Downing Street confirmed Mr Brown's "full support" for the troubled chancellor.
And Mr Darling will today successfully begin the legislative process effecting nationalisation, with the declared support of the Liberal Democrats in the House of Commons.
Mr Osborne claimed "Labour's economic incompetence" had landed every household in the country "with a second mortgage" and said it was "a disaster" the taxpayer would carry "the full burden of lending £100 billion of mortgages in an uncertain housing market".
However Lib Dem spokesman Vince Cable suggested that, having delayed for five months, the government was now "in the best position to ensure the return of taxpayers' money".
The potentially perilous nature of the government's commitment was also underlined when Mr Darling found himself unable to answer one Labour MP who wanted to know: "Is it a new beginning, or the beginning of the end?"
Former Conservative chancellor Kenneth Clarke confirmed he had supported the government's original action to guarantee deposits but argued "the orderly rundown of the bank" was the only justification for nationalisation.
And if, as Mr Darling suggested, it really was "business as usual" at Northern Rock, Mr Clarke wondered "why every sane saver" in the country should not rush to put their money in the only bank now underwritten by the government.
Explaining his rejection of two private sector bids to take over the bank, Mr Darling said he had taken his decision after full consultation with the Bank of England and the Financial Services Authority.
It was important for savers and depositors to be reassured that their money remains safe and secure, he said.
"Northern Rock will continue to operate as a bank on a commercial basis. It has been open for business as usual," he said
Mr Osborne, however, insisted this was "now a government bank" - noting it was "still offering 125 per cent mortgages", which he described as "politically and economically unacceptable".
He also attacked "draconian powers" contained in the Bill now before parliament enabling the government to intervene in similar situations, which he claimed would create further uncertainty and damage to Britain's reputation.
Mr Darling said the Bill was drafted to ensure a bank could only be acquired in "tightly defined circumstances" and that the government had no intention of using it "to bring any institution into temporary public ownership other than Northern Rock".
