In one of his last acts before stepping down, Sir John Bourn, National Audit Office (NAO) auditor general, has decided to launch a full-scale inquiry into the events behind the government's bail-out of the failed Northern Rock bank.

The inquiry is expected to examine the government's original decision to guarantee deposits and loans to halt the run on the bank, as well as Gordon Brown and Alistair Darling’s final decision to nationalise the bank last Sunday, The Guardian reports.

Auditors will be demanding access to files held by the Treasury and the Financial Services Authority, and will consider accusations that the government dithered over decisions on the future of the bank.

They are eager to examine the bids from Richard Branson's Virgin group and Olivant, the private equity group, to see which option was the best value for the taxpayer, and will also look at whether civil servants took prompt action to safeguard taxpayers' money.

Further reading:
Lib Dems want audit of Rock's loan book
Treasury tells Rock suitors to improve offers
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