A plan to split Northern Rock into a "good" bank and a "bad" bank has been approved by the European Commission. Skip related content
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EU approves plan to split Northern Rock
The "good" side will continue Northern Rock's economic activities, while the "bad" bank will become an asset management company running down the remaining toxic assets.
Gordon Brown now plans to sell off the former and keep the latter under state control.
Approval of the split under EU state aid rules, including another Government cash injection, was announced by Europe's Competition Commissioner Neelie Kroes.
She said: "The failure of Northern Rock would have had major detrimental effects on the UK mortgage market and the overall financial stability of the UK economy.
"Important structural changes, including the split of the bank into two entities and a significant reduction of its market presence, will allow the bank to become viable in the long-term and limit distortions of competition."
Tributes have been paid to a schoolgirl who died after slipping in her high heels and falling under a train while waving goodbye to her friends.
