Sandler to lead N.Rock if nationalised

By Steve Slater and Mark Potter

LONDON (Reuters) - Britain has lined up respected executive Ron Sandler to run Northern Rock should the stricken bank be nationalised, fuelling expectations the government could announce a move to state control within days.

"I've been invited by the government to go in as executive chairman in the event that Northern Rock were to be nationalised," Sandler, a former head of the Lloyd's of London insurance market, told BBC television on Saturday.

The BBC said the government could decide to nationalise Northern Rock within days, a move that could heap fresh pressure on Prime Minister Gordon Brown, who has been widely criticised over the demise of one of Britain's biggest mortgage lenders and who has been hoping for a private sector rescue of the bank.

It would also attract the ire of Northern Rock's shareholders, who are due to due to hold a key meeting in the bank's home town of Newcastle on Tuesday and could be left with nothing under a move to state control.

"I should stress that this is part of a contingency plan," Sandler told the BBC. "You will know that a number of private sector solutions are presently being explored. But in the event that it is felt that nationalisation is the most appropriate option, then the government has asked that I should go in on their behalf and chair the bank."

Northern Rock is Britain's biggest casualty of the global credit crunch and has borrowed around 26 billion pounds ($51 billion) from the Bank of England since it requested emergency funds in September -- a step which sparked the first run on a British bank in over a century.

The government has since been searching for a private sector rescue that would lead to repayment of the loans.

Talks with consortia led by Richard Branson's Virgin Group and Olivant, an investment company led by the former head of mortgage bank Abbey, Luqman Arnold, continue.