Emergency legislation to nationalise Northern Rock has passed the first stage in the Commons.

The Banking (Special Provisions) Bill was given a second reading by 367 votes to 164, a majority of 203, despite Tory opposition.

The Bill provides the troubled bank to be put into temporary public ownership and will undergo immediate detailed line-by-line committee stage examination.

It is expected to finish its Commons stages just after midnight and will move to the Lords tomorrow with the objective of it becoming law by the end of the week.

The Chancellor said it was necessary to rush through legislation because it was impossible to run a bank unless it was clear "who was in charge".

Alistair Darling said: "We won't be involved in the day to day management of NR. But we do need to approve its business plan. We want to make sure it is prudent, that it's sensible, and protects the interests of the taxpayer. But also we want to make sure it avoids distortions."

The Tories have called for the resignation of Mr Darling, who has said shareholders could expect little for their investment.

He said compensation will be decided by an independent valuer on the basis that financial support for Northern Rock had been withdrawn.

He said: "The reason for that is quite simple: If we had not intervened last September this bank would have gone under, it would have gone bankrupt.

"It would be unfair to the general taxpayer to calculate compensation on the basis that this bank is continuing as a going concern."

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