As news that the much rumoured bail out of troubled financial group Northern Rock may be nearing the end game hits the streets, it seems that Alistair Darling may be moving ever closer to the end of the road.  The Northern Rock board have announced Richard Branson’s Virgin Group as the partner of choice to take the group forward and hopefully on to recovery.  So how will it work?

Virgin will take a major stake in the business in exchange for introducing a new and highly incentivised management team into the troubled Geordie giant.  As well as injecting further capital for a share stake, Virgin will also giving existing shareholders the chance to input further funds into the group via a deeply discounted rights issue at 25p per share, against a current price of around 100p.  But what about the massive debt liabilities?

The loan from the bank of England now exceeds £25 billion, and while Virgin have plans in place to repay £14 billion immediately, there is no firm plans with regards to the additional loan amount.  Will the tax payer foot the bill? Will Alistair Darling take the blame?

These are all questions which need to be answered as it looks ever more likely that the UK tax payer will lose out at some stage in what has been a messy and badly handled affair.  Governments were never meant to use public money in the free market, but this has happened and many are wondering if this increases the chances of it happening again in the future?