LONDON - THE former head of Lloyd's insurance market, Ron Sandler, said on Saturday he has been appointed to lead troubled British bank Northern Rock should it be nationalised.

'In the event of nationalisation, I have agreed I will go in as executive chairman,' Mr Sandler said in a statement, explaining that his role would be 'to get things stabilised, to make sure the bank has proper plans in place'.

He would also be responsible for ensuring a management team was in place at the mortgage lender, he added.

Northern Rock has been talking to Richard Branson's Virgin Group and the private equity firm Olivant, but there is speculation they cannot raise the funds to pay back billions of pounds in central bank loans.

Justin Urquhart Stewart, of Seven Investment Management, said he believed the bank 'will be nationalised by Tuesday", when shareholders meet for an extraordinary general meeting.

'The current structure is unworkable. Obviously they cannot do a deal with Virgin or Olivant,' he said.

'Rather than just assets being sold off, now is the time to go in and control it and manage assets down or run it as an ongoing business.' Mr Sandler was 'a safe pair of hands and a highly respected individual,' he added. 'He is close to the industry but suitably objective, he is not just a yes man.'

Northern Rock was forced to apply to the Bank of England in September for emergency funds to stay afloat following the squeeze on global credit caused by the crisis in the US subprime mortgage market.

That prompted worried customers to queue in their thousands to withdraw savings from branches across the country, in turn affecting consumer confidence in the banking sector.

The firm has since borrowed at least an estimated 25 billion pounds (S$70 billion) of British taxpayers' money at a penal rate from the Bank of England.

The government has said it wants a private sale but nationalisation is an option. -- AFP