Mortgage lender Bradford & Bingley (B&B) has followed Northern Rock and is to be nationalised, the government has confirmed.

The government will assume control of the bank's £50bn in mortgages and loans, while shares in the company have been suspended.

Rival Abbey, owned by Spanish bank Santander, is to buy the bank’s £20bn savings business and branch network.

Chancellor Alistair Darling told BBC Radio Four's Today programme that the government had chosen to nationalise B&B "to provide the stability" that the UK financial sector requires.

Last week, B&B announced it would cut 370 jobs and shut its mortgage processing centre, as well as cutting its mortgage broker sales team and making its remaining 50 branch mortgage advisers redundant.