UPDATE 3-Britain to nationalise Bradford & Bingley -report

(Updates throughout)

By Steve Slater and Sumeet Desai

LONDON, Sept 27 (Reuters) - Britain will nationalise troubled mortgage lender Bradford & Bingley BB.L, the BBC reported on Saturday, but the government said discussions on the bank's future were still going on.

It would be the second British bank to be nationalised this year after Britain, buffeted by the global financial crisis, was forced to take Northern Rock into public ownership in February.

The credit crunch, sparked by losses on poor-quality U.S. home loans, has claimed a growing number of high-profile banking victims around the world.

The BBC said the decision to nationalise Bradford & Bingley, using legislation put through to deal with the Northern Rock crisis, would be announced on Sunday evening or early Monday.

Bradford & Bingley's network of about 200 branches would be sold to one or more commercial banks, the BBC said.

The government said talks on B&B were still under way. "The discussions are still going on. A further statement is expected before markets open on Monday," a Treasury spokesman said.

B&B declined comment.