The Chancellor has come under fire for his handling of the Northern Rock crisis as he pledged to give the bank time to resolve its future.

Alistair Darling insisted allowing the lender to borrow £24bn in emergency funding from the Bank of England "was the right thing to do".

But shadow chancellor George Osborne said: "This is a tale of incompetence and weak leadership from a Government that reels from one disaster to another."

Mr Darling said the Bank of England's support has given the troubled company an opportunity to "consider its strategic options".

And he added that Government will be able to veto any plans for the mortgage lender, which was hit by queues of people trying to withdraw their money back in September.

The news comes as the Newcastle-based firm revealed it has received rescue plans from potential suitors which are "materially below" the value of the company.

Brussels is now waiting for formal notification of the Government's aid package before assessing whether the funding complies with EU rules on state aid.

The European Commission can ban any state finance it believes gives a company an unfair advantage over its European rivals.

EU competition policy spokesman Jonathan Todd said: "We have been in contact with the UK authorities on this matter since the end of August and we are still in regular contact with them.

"There has been no formal notification from the UK authorities of their intentions.

"There are in such situation two possibilities: either you can give rescue aid which must be limited in time to a maximum of six months, or you can give restructuring aid which can last longer than six months but in return for which the company must restructure in such a way that it will no longer need public subsidies in the future.

"So for the moment contacts are continuing and that's all I can say.

"Clearly the Commission cannot take a decision which would ensure legal certainty under EU state aid rules until we have received formal notification."

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