The Government will not "rush" into the sale of Northern Rock and will ensure the "best possible deal" for taxpayers, Chancellor Alistair Darling has said.

His comments came after some newspapers reported that the Treasury was planning to sell part of the nationalised bank back to the private sector by the end of this year.

But Mr Darling insisted he was in "no hurry" to sell and would wait until he got the "best value for money" for taxpayers.

He was responding to the issue raised at question time by Liberal Democrat Treasury spokesman Vince Cable who asked: "Why are you proposing to sell the good parts of Northern Rock this year, when, under current market conditions, it will almost certainly guarantee a very large loss, rather than waiting for market conditions to improve and getting better value for money for the taxpayer?"

The Chancellor said he had always been clear that once the crisis had passed the nationalised banks would be returned to the private sector.

"I don't believe the Government ought to be in the business of running banks in the long term."

He said: "The question is when do we sell those banks into the private sector and that will be determined by what represents the best value for money for the taxpayer.

"I'm in no hurry to do this. I think it is far better that we ensure that when we sell, we are satisfied it represents the best possible deal.

"It's not something I would rush into. I want to make sure that we do get a good price for the assets we now have."

One newspaper suggested Northern Rock, which was nationalised last year, would be split in two, with its most toxic loans held in a "bad bank" to remain in Government hands and the remainder sold off by the end of the year.

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