Northern Rock has officially been nationalised after the Chancellor signed off on the deal.

Alistair Darling made the order shortly after Parliament approved emergency legislation to allow such ailing financial institutions to be taken over by the state.

Ron Sandler and Ann Godbehere have joined the board of Northern Rock as executive chairman and chief financial officer respectively.

MPs have 40 sitting days to lodge an objection to the nationalisation order.

The Treasury has confirmed it had acquired all of the shares in Northern Rock.

A compensation scheme will be set up for shareholders. An independent valuer will decide on the level of payout.

The government ruled out two rescue bids from Virgin and the bank's management, saying it was in the taxpayers' best interests.

Northern Rock's stock market listing has been cancelled, but its debt securities will continue to trade.