Welcome to live coverage of the debate on the banking (special provisions) bill. The government can expect a rough ride as it attempts to get through the emergency legislation necessary to take Northern Rock into public ownership.
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3.55pm
Philip Hammond, the shadow chief secretary to the Treasury, has just branded the bill "unacceptable" and urged his colleagues to vote against it.
Simon Hughes, the Liberal Democrat business spokesman, says the Lords will "certainly have amendments" to the bill and so envisages delays to the bill. He claims it is a "nonsense" to have given over only one hour to deal with amendments and questions on Thursday.
Hughes urges his colleagues to say "No" to the timetable.
Richard Shepherd, Con, Aldridge-Brownhills, argues no evidence has been produced of a national emergency that would require the bill to be rushed through in such a manner. He says the Northern Rock crisis has brought "disrepute" on the financial institutions of the UK.
He says the Commons is becoming merely a "place of announcements", rather than the debating chamber it is supposed to represent.
Gwyneth Dunwoody, Lab, Crewe and Nantwich, makes it clear she is in favour of the bill. But she says procedures should not be sidestepped because it is convenient to the executive.
The programme motion is "not defensible" she says.
4pm
Dunwoody says the result of curtailing debate will "make the UK a poorer nation".
John Redwood, Con, Wokingham compares the programme for passing the bill - unfavourably - to Europe, prompting a few laughs from those familiar with Redwood's Euroscepticism.
He calls it "an extremely complicated bill with implications for the whole of the financial sector in this country". Redwood is unhappy about the committee stage being skipped over.
4.05pm
Bill Cash, Con, Stone, accuses the government of having "completely overridden" the procedures of the House and bringing the government into "contempt".
Yvette Cooper, chief secretary to the Treasury, says the bill has been put forward in "unusual circumstances" and it is right that the situation should be "resolved as swiftly as possible" for the benefit of taxpayers, shareholders and depositors.
4.10pm
MPs are currently voting on whether the programme the government has proposed for attempting to pass the banking (special provisions) bill is acceptable. They will then commence the battle proper, when discussions on the actual content of the bill begin.
4.15pm
The chamber was cleared for the vote. MPs are now starting to wander back and as soon debate resumes we will be bringing you all the action until the close of proceedings tonight.
4.25pm
It's no surprise that the business motion (which deals with the programme for the bill) is passed by 291 votes to 223.
Alistair Darling is now up for the second reading of the bill. He mocks the Tories for suggesting the bill was "not urgent".
The "legal authority and certainty" must be given to the management as soon as possible says the chancellor. The Tories shout "why?" and as Darling explains why the speaker has to intervene and tell the Conservatives not to shout.
Darling says the legislation is necessary because of the "particular circumstances".
4.30pm
Philip Dunne, Con, Ludlow, asks why the bill is "far, far wider" than just dealing with the nationalisation of Northern Rock.
Darling argues it is quicker to do it this way as tempting as it would have been to just have a bill saying "Let's nationalise Northern Rock".
On competition, and concerns expressed by the opposition on that matter, Darling says the government will approve Northern Rock's business plan and ensure that it does not introduce "distortions" into the market. He does not want the bank to be competing in a way that is unfair.
The chancellor is asked if he will make the Financial Services Authority monitor the impact on competitiveness of Northern Rock's nationalisation.
Darling says it would be wrong if the bank was competing unfairly and the government's aim is to reduce the amount of support and eventually remove it.
4.35pmA business plan will look at how the business can be managed so the amount owed to the taxpayer can be repaid, says the chancellor.
4.40pm
Darling makes clear that indefinite loans are not an option under EU state aid rules.
A full board at the bank will be announced in the "next couple of days or so", says the chancellor.
He begins going through the bill. There has to be, under clause 2, "a serious threat to the stability of the financial system" and the scale of the assistance necessary must go beyond that usually offered by the Bank of England before nationalisation is a possiblity.
Darling says these are "very exceptional circumstances".
4.45pm
Edward Leigh, Con, Gainsborough, says the chancellor previously indicated that fees payable to adviser, Goldman Sachs, would be met by Northern Rock, but he asks if that liability will not now fall on the government, as the owner of the bank. He also asks whether the extent of those fees is £100m, as reported by the Times.
The chancellor says the fees owed have yet to be determined.
Darling is then asked why there is not a one clause bill as with the nationalisation of Rolls Royce in 1971. The chancellor is not familiar with 1970s procedures he says.
It is necessary to have powers in the bill to not only acquire Northern Rock but to run it and transfer it back to the private sector. That is why it is not a single clause bill, says Darling.
4.50pm
On to compensation for existing shareholders - he's being heckled but is determined to go on - Darling says the compensation will be determined by an independent valuer who must assume that financial support from the government has been withdrawn. He explains this is because if the government had not intervened in September the bank's value would be much reduced.
On the criteria for transferring the bank back to the private sector, that will be determined "further along the line", says Darling.
4.55pmThe government intervened in September to ensure financial stability and in the interest of the shareholders and the taxpayers, says the chancellor.
His proposal is "the best value for money", he claims and as Tories interrupt he refuses to give way, arguing he has done so already "generously". He describes the Conservative approach to the Northern Rock crisis as "muddled" and "opportunistic" to cheers from the Labour backbenchers.
5pm
Shadow chancellor George Osborne asks the Labour backbenchers to calm down as he rises.
He says after Darling's statement "we still don't know the simplest things" such as how much the government is paying and how the bank will be run. He claims it is an "unusual approach" to only know how much something is going to cost until after one has agreed to buy it.
There are precedents in nationalisation bills for putting a limit on the amount the government is prepared to pay, adds Osborne, referring to the 1975 British Leyland bill.
The shadow chancellor is concerned the government is hoping to get the bank at a bargain price but fears it will then find itself taken to court by the hedge funds.
Osborne says the value of Northern Rock shares is very low. His proposal is for a "Bank of England-led reconstruction", he says, which he claims is a proposal outlined in the government bill.
5.05pm
He is asked whether he would give no compensation to shareholders. Osborne says the value of the shares is "very low" and claims the Bank of England solution he is proposal would make it more likely something was left for shareholders.
The shadow chancellor says the least he wants from the government before a vote is an "honest" valuation of the bank. "We are entitled to know what we are buying."
There has been nothing about the general state of the bank's mortgage book beyond Darling's "bland statement" that it is in good health, says Osborne. The shadow chancellor claims the credit agencies do not agree with his counterpart's assessment of the bank's mortgage book.
5.10pm
Osborne rounds on the government for "dithering". He claims the Tories may "carry the day", in terms of amendments, in the House of Lords, by working with the Liberal Democrats.
5.15pm
He accuses Labour of being scared to utter the word nationalisation - "the policy that dares not speak its name". He refers to Ron Sandler's press interviews in which he has hinted the bank may be under public ownership for three years. Why will the chancellor not give a timeframe in Parliament, he asks.
Cousins asks Osborne if he thinks a very brief nationalisation of "days, weeks, months" would be in the public interest.
Osborne retorts by quoting Cousins in the Commons on November 19 when he said nationalisation would lead to a "slow, lingering death" for Northern Rock.
The shadow chancellor says Northern Rock is offering "the most generous saving rate in its class" and 125% mortgages and that is not going to change. It will threaten jobs at other banks and undermine the financial sector, claims Osborne.
5.20pm
The Office of Fair Trading would have a supervisory role in assuring other financial institutions are not unfairly affected by Northern Rock's nationalisation in an amendment to the bill agreed by the Tories and Liberal Democrats, reveals Osborne.
Northern Rock is exempted from the Freedom of Information act under the bill as "it should not be treated as a public company", reads Osborne to guffaws from the Tory backbenches. He points out that the Post Office and other organisations are not exempt.
5.25pm
The taxpayer should come at the top of the list not at the bottom, says the shadow chancellor.
"Nationalisation means years of lingering uncertainly".
John McFall, chair of the Treasury committee, refers to the committee's report published last month. That is designed to prevent a reoccurance of the Northern Rock crisis.
He acknowledges there is concern that Northern Rock may set a precedent for banks but he describes it as an "outlying" institution which operated differently from its rivals.
In relation to protection of taxpayers he says the decision to nationalise Northern Rock is "the right one".
5.30pm
Any private takeover could lead to the taxpayer continuing to run the risks while the private company takes all the profits, says McFall.
Administration would have undermined confidence in the whole system and threatened runs on other banks, he says.
McFall believes the interests of consumers will best be served by a well-regulated banking system. He is conscious that there should not be any distortion in the financial market because of Northern Rock's unique position as a nationalised bank.
5.35pm
He says the bank must meet EU state aid rules and must continue to pay a penalty for attracting new depositors. There must be transparency of the decisions of the bank's management and the business plan and Sandler's incentive plan must be scrutinised.
Finally, McFall says, there must be a commitment to the principle that public ownership is temporary.
Vincent Cable, the Liberal Democrat Treasury spokesman, says the bank is currently "paralysed" and so quick action is needed.
He refers to a BBC report that Sandler is a non-dom. "He is becoming the second highest paid person in Newcastle after Michael Owen but at least Michael Owen pays his taxes here....well, I think so," says Cable. But he goes on to say that he supports nationalisation.
5.40pm
Cable asks if the bank is going to be built up or run down, the answer to which he says is "absolutely crucial". He could envisage either option. "This is a political issue," he says.
After the "excesses of the past" his instincts tell him a conservative approach is better.
5.45pm
There has been plenty of evidence that there are "all kinds of problems with this bank" says Cable, who wants "a proper independent audit investigating how sound this bank is". He does not want that to be carried out by the FSA.
He wants to know the costs of the failed bidders that will be borne by the government. He also wants to know what drove the government to nationalisation.
5.50pm
Cable now asks about the bank's lending practices and whether Northern Rock will have easier access to the wholesale markets because of its public ownership.
The bill opens up questions about the banking system in general, says Cable. He describes the banking industry as a "cosy little set-up" and says it should be made genuinely competitive.
Cousins is speaking and says he was sceptical about nationalisation because the people who put the case just saw it as a more "decent option" to bankruptcy.
The option put forward by the government and Sandler may prove to be a more palatable option, he says.
5.55pm
Rapid run down would be the "worst possible course of action", he continues.
Cousins insists bankruptcy would destroy the assets and destroy the value in the business.
Redwood asks cousins if he has had any assurance from the chancellor that he is not going for the "run down" model.
Cousins replies that he has not and is not seeking such an assurance. But he refers to positive noises made by Sandler about the continued operation of the bank.
6pm
Cousins does not think it would be wise to keep the penalty charges imposed on the bank in September or to require Northern Rock to pay back government debts in 1-3 years.
Saying Northern Rock can not take on new business "would kill it off", says Cousins. He is looking to his colleagues for assurances that that will not be the case, he adds.
He says the Liberal Democrats have changed their attitude towards nationalisation. Initially they rreferred to it as a "temporary interlude", he says, while now they are looking at it as a longer term solution where public ownership would be for a "considerable period of time".
Cousins has been stopped in his tracks by the Speaker - I think he hit the 10 minute limit for backbench speeches set by the speaker.
It's the turn of Stephen Dorrell, Con, Charnwood, now. He says there's "no clarity" of the objectives management should be following during the "brief phase" of nationalisation.
He is finding it difficult to see the arguments of trying to continue the business model which "failed dramatically" in September. The government should be "very clear" that it is not making any attempt to make that model work.
6.10pm
Dorrell opposes the bill because "it fails to take advantage of the opportunity to clarify a new set of objectives for Northern Rock".
"A period of orderly realisation of assets is required," says Dorrell. He hopes Sandler's business plan will look at this option and the sale of the bank's assets in "small parcels" to realise the benefits for taxpayers.
6.20pm
Doug Henderson, Lab, Newcastle Upon Tyne North, believes "it was right to try to find a private sector solution". That would have been "by far the most desirable outcome".
He's still not clear on what the Conservative position is. The message going out is that the Tories are against nationalisation "full stop", he says.
The shadow chancellor asks if Henderson is aware that what he votes for tonight could lead to big job losses.
Henderson retorts that he knows what he is voting for but Osborne may not know what he is voting for.
6.25pm
Henderson believes the business plan is the "key issue" and says MPs are not best placed to decide what the business plan should be. He hopes that when the board draws up the plan it will speak to employees.
Peter Lilley, Con, Hithcin and Harpenden, says the government has spent five months in "prevarication", driven by political considerations. It thought it "would be bad for the image of the Labour party to be associated with nationalisation", claims Lilley.
6.30pm
Now the government is "ramming it through in a day" to minimise discussion and press coverage, he accuses.
There is nothing in the bill that learns from Northern Rock's experiences and would prevent it happening again, says Lilley.
6.35pmRedwood blames the Basle agreement for encouraging all banks to go for growth - trust him to blame a European agreement.
Lilley says he is not an "absolutist" on nationalisation. He nationalised Iraqi assests in the UK in "five minutes, not five months" after the invasion of Iraq despite dealing with problems created by an overseas dictator and not by the leader of his own party, he recalls.
6.40pm
Northern Rock will move to be a "national millstone", he predicts.
Frank Dobson, Lab, Holborn and St Pancras is supporting the bill because it is the only solution, he says. Like the leader of the Tory party Northern Rock was chaired by an old Etonian, he points out.
6.50pm
Sorry for the lull. Frank Dobson's speech was briefly interrupted by a phone call from someone asking if I was the property owner and wanted to buy a kitchen. I explained that he had got through to the Guardian, at which point he said he was a Guardian reader, asked what I did and said he never got through to anyone interesting - I was flattered. He also tried to find out what was in tomorrow's paper...perhaps he wasn't really a kitchen salesman.
Anyway, John Maples, Con, Stratford-On-Avon is saying the government has taken on the necessity to take on thousands of redundancies. He claims administration would have offered the government much greater flexibility and there would not have been a problem of compensation for shareholders as they just would have got what was left.
6.55pm
Maples believes the credit criteria under which Northern Rock lends must be brought in line with other financial institutions.
7.05pm
Phil Wilson, Lab, Sedgefield says the government made the "most difficult decision" but supports the bill. He says Labour have a policy on the issue while the opposition started with four "dithered from one to the other and ended up with none".
"To lose one is unfortunate, to lose four is careless," he says, drawing from Oscar Wilde's The Importance of Being Earnest for inspiration. He gets a laugh or two but the chamber is fairly empty.
Redwood argues a timetable must be agreed for the repayment of the taxpayers' money lent to Northern Rock. He finds the lack of information before the House that any buyer would expect "breathtaking".
7.10pm
It is a disgrace that there is no financial due diligence information, spits Redwood. "They [the government] will lose us a huge amount of money" if they don't do due diligence, he says.
Mark Todd, Lab, Derbyshire South, believes nationalisation is the best of a range of bad options and will support the bill "with considerable hesitations".
He is concerned about a challenge from shareholders.
7.20pm
Todd says people should not expect that "we are going to build some great institution in the north-east" and receives "hear hears" from the Tories in response.
Michael Fallon, Con, Sevenoaks, calls Todd's the "most realistic" to come from the Labour benches.
Fallon wants to know how "a serious threat to financial stability" is defined. He thinks if there is no definition any bank with problems will "come hammering on the door".
Fallon also believes it is wrong that it is left for the chancellor to decide what represents a threat. It is a "bad bill", he says.
7.25pm
"We're going to be stuck with Northern Rock for a great number of years," claims Fallon. "Widespread, sweeping powers" should not be introduced in a rush but any crisis should be dealth with as it happens, he insists.
7.30pm
Richard Spring, Con, Suffolk West, is blaming the government for Northern Rock's initial problems, arguing the regulatory framework was weak. And he says there are now no details on how the bank is to be run - "an absolute disgrace".
To keep the power to nationalise in reserve sends out "an incredible message", says Spring.
7.35pm
Philip Dunne, Con, Ludlow, says the PM and chancellor "failed to anticipate what might happen in the event of a financial crisis".
He accuses Darling of being "confused" in the drawing up of the bill and asks why he is using the bill to give him powers that "go way beyond Northern Rock".
Dunne asks if there is "any credence" remaining to the independence of the Bank of England.
7.40pm
Philip Hammond, shadow chief secretary to the Treasury, says we are here because of the government's "incompetence".
He says nationalisation is "the solution they've sought to avoid for five months and for good reason". It comes with "clear downside risks", he argues. They include risks to the stability of the financial system, to taxpayers and to political interference, he says. He doubts the government's ability to do "arms-length".
We are being asked to buy "a pig in a poke", he claims.
7.50pm
Hammond calls for a Bank of England special protection regime. He ends by quoting Cousins's words that nationalisation would lead to a "slow, lingering death".
7.55pm
His government counterpart Yvette Cooper says the bank's problems were caused by "market failure".
She says it is important to make sure there is not "inappropriate, unfair competition" but it would not be appropriate for the government to make decisions on individual products offered by the bank.
No one expects the bank to operate in the same manner it did before the problems arose, says Cooper.
She claims the Tories "are all over the place" for "wanting a special form of administration".
8pm
Cooper commends the bill and the speaker clears the lobby for the vote on the second reading of the bill.
8.15pm
The second reading of the bill is passed by a comfortable majority of 367 to 164.
That is the end of our live coverage for tonight but we will be continuing to bring you all the latest news as the government attempts to get its emergency legislation through parliament over the next few days.
Thanks for joining us and please let us know what you thought of the proceedings.
