NR shareholders poised to launch legal action

A legal battle between Northern Rock shareholders and the government took a step closer yesterday after Treasury lawyers rejected investor pleas for fair compensation.

The UK Shareholders’ Association will now seek a judicial review of the decision to base payouts on the assumption that the bank was unable to continue without pubic support.

The UKSA says this would leave shares in the group almost worthless.

It hopes the review, expected in nine months time, will force ministers to rethink the valuation of the business.