Alistair Darling on Thursday played down speculation that the government would soon be able to secure private sector finance to cover the billions of pounds lent to Northern Rock, the beleaguered mortgage lender.

Speaking to the Commons' Treasury committee, the chancellor said the process of trying to find new finance to replace the ?26bn ($51bn, EU34.5bn) lent by the government was "reaching a stage when we have to come to a conclusion".

But he stressed that the government was operating in "extremely difficult circumstances" where many financial institutions "cannot borrow or lend", so the bank might have to be nationalised.

"All of us believe a private sector solution would be highly desirable," said Mr Darling, but he indicated that if the government decided on nationalisation, it would be for only a temporary period before the assets could be sold, either wholesale or in chunks, to the private sector.

The authorities are still seeking private sector finance and have not denied making approaches to sovereign wealth funds or that they have considered the possibility of securitising Northern Rock's assets with a government sweetener to raise the finance.

One of the biggest obstacles to a solution, Mr Darling insisted were the shareholders of the bank, who still had control over decisions and could block plans drawn up by the company and the government's advisers. "We don't run this company. One of the things that is unsatisfactory is that we don't have all the levers."

The battle between the authorities and the shareholders, many of whom bought shares after the company sought emergency help from the Bank of England, is intensifying by the day.

The large shareholders have called an extraordinary meeting for next Tuesday to consider a resolution that would force the company's board to consult them about any buyout.

But the chancellor was adamant that the shareholders were not high up his priority list.

"Our principles are clear. We want to look after the depositors.

"We want to make sure we get back the money the Bank of England has lent. Shareholders should always accept that the shares can go up and down."

He added that the new shareholders, mostly hedge funds, "were not the sort of people who do things with their eyes shut".

Meanwhile, George Osborne, shadow chancellor, will today launch the first of a series of attacks on Gordon Brown's economic record, claiming he has left Britain perilously exposed to the credit crunch.

"His economic incompetence and fiscal incontinence have left Britain more exposed than any developed country to the current crisis," Mr Osborne will say at the London School of Economics. The Tories would adopt new fiscal rules so that "never again do we borrow and leave our economy so exposed to a downturn".

Mr Osborne claimed other countries such as Ireland and Australia had used the fat years to prepare for the lean years.

Mr Osborne and Mr Cameron believe Mr Brown is seriously vulnerable on the economy for the first time in 10 years, and they aim to tackle the prime minister's claim to be a force for stability during difficult economic times.