The government have confirmed that mortgage lender Bradford & Bingley is to be nationalised.

Under the rescue package the government will assume control of the financial institution's £50bn worth of mortgages and loans.

B&B's savings business and branch network is to be bought by rival branch Abbey National, which is owned by Spanish banking group Santander.

"Following recent turbulence in global financial markets, Bradford & Bingley has found itself under increasing pressure as investors and lenders lost confidence in its ability to carry on as an independent institution," said the Treasury.

Chancellor Alistair Darling commented that the government had moved quickly to nationalise B&B to provide "the stability" that the UK financial sector needs.