Brown defended the decision to bring the bank into public ownership, saying it had been taken in the best interest of the taxpayer.

"We will have and always have put the interests of taxpayers first," he said.

And the new boss of the troubled bank today spoke positively about nationalisation of the bank as "a chance to pull back."

Speaking from the Northern Rock headquarters in Gosforth, Newcastle, Ron Sandler said: "“I want to reassure staff that the process of temporary public ownership is a good thing.

"It gives the bank a period of stability and a chance to pull back from some of the forces that have buffeted it in previous months.”

But Cameron accused the Government of leaving every taxpayer exposed to liabilities of £3,500 through “incompetence”.

Osborne mocked the Government’s “dither and delay”, insisting no previous Chancellor had ever had to come before MPs to announce the nationalisation of a high street bank.

Nationalisation, he said, amounted to the “slow, lingering death of Northern Rock and Britain’s reputation as a major financial services centre” with Mr Darling cast as the “undertaker”.