Troubled British mortgage lender Northern Rock’s share price plummeted 8% today as rumors of government nationalization grew after the Treasury panned rescue plans offered by Richard Branson's Virgin Group and a competing version from the bank’s management team, the BBC reports. Though shareholders reportedly prefer management's bid, the government favors Virgin’s plan—if it sweetens the deal.
Among the concessions sought is a bigger taxpayer stake in the Rock in return for guaranteeing funds. Shareholders would lose half their stake in the lender under Virgin’s plan, but could lose everything if the government nationalizes it, which Prime Minister Gordon Brown has said he’s willing to do. "Nationalization is looking much more likely," said one banker.