Chancellor Alistair Darling has defended the handling of the Northern Rock crisis and pledged to give the beleaguered bank breathing space to resolve its future.
The lender has borrowed an estimated £24 billion in emergency funding from the Bank of England so far but Mr Darling insisted the support "was the right thing to do".
The Chancellor's defence came as the Newcastle-based lender revealed it had received rescue plans from would-be suitors which were "materially below" the value of the company. This sent its shares plummeting by more than 20%.
Mr Darling said the Bank of England bail-out had given Northern Rock a chance to "consider its strategic options", but came under attack from shadow Chancellor George Osborne.
Mr Osborne said: "This is a tale of incompetence and weak leadership from a Government that reels from one disaster to another."
The Chancellor said that Government would have a veto over any rescue plans for the mortgage lender, which was at the centre of the UK's first bank run for nearly 150 years in September.
