Northern Rock will appear on government accounts, the Office for National Statistics has decided.
The decision from the Office for National Statistics (ONS) had been widely expected as a result of the government's rescue package.

It means the government may be at risk of breaking its rule to keep net debt below 40% of national income.

The ONS stressed that the statistical change to public status should not be confused with nationalisation.

'In charge'

Under the change, Northern Rock is to be classified as a public financial corporation for statistical purposes.


This means that the ONS judges that the government is in charge of Northern Rock's "general corporate policy".

"This is largely due to powers that the Bank of England has taken as part of its secured lending facility arrangements," the ONS said.

It gave examples of the things that Northern Rock cannot do without government permission - such as corporate restructuring, making dividend payments and buying or selling certain types of assets.

'Risk of loss'

The BBC's business editor Robert Peston reckons Northern Rock could add up to £100bn to the national debt, mostly secured against the mortgages of the Rock's customers.

"Even so, a portion of that £100bn is genuinely taxpayers' money at real risk of loss, because the value of those assets could turn out to be less than the government hopes."

"However, it's impossible to assess that risk of loss with scientific precision," Robert Peston said.

The statistical change will be backdated to 9 October 2007, which was when the Treasury extended its guarantees to cover new savings deposited at Northern Rock.


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