LONDON (Bloomberg) — Chancellor of the Exchequer Alistair Darling gave shareholders of Northern Rock Plc two weeks to back a British government plan to rescue the bank or face having the value of their investments wiped out by nationalisation.

Darling said he hopes to attract a buyer for the UK's fourth-largest mortgage lender by February 4 by offering to guarantee a sale of bonds backed by the bank's home loans. British authorities must seek state-aid clearance for the plan from the European Union by March 17.

"If the solution I have outlined proves not to be possible on terms which protect the public interest, then a temporary period of public ownership will be necessary," Darling told Parliament in London yesterday. Darling said he would favour bids that show Northern Rock operating quickly without government support.

The comments are aimed at forcing shareholders to back the Treasury's plan and ending a five-month crisis triggered when the Newcastle-based mortgage lender's lines of credit dried up. The episode prompted the first run on a UK bank in a century and tarnished the reputation of Prime Minister Gordon Brown for smooth management of the economy.

Darling said the plan would give the Treasury a share in any future profits reaped by buyers if Northern Rock returned to profit and guarantee that £24 billion ($47 billion) in loans extended by the Bank of England were repaid. He said the Labour government is preparing legislation to nationalise the bank if a private sale failed.

Opposition politicians attacked the measures, saying they will broaden taxpayer support for Northern Rock and allow bidders to profit from money risked by taxpayers. Richard Branson's Virgin Group Ltd. and Luqman Arnold's Olivant Advisers Ltd. are seeking to take control of the bank.

"We've got a private-sector solution without private-sector money," Liberal Democrat lawmaker Vince Cable said. "What we have here is the government solemnly undertaking to repay the government."

The Treasury's plan, devised by Goldman Sachs Group Inc., which is advising the government on Northern Rock, calls for mortgages, consumer loans and some investment-grade securities held by the bank to be packaged as debt and sold to investors. The government would back the new securities. Bids based on the new funding plan must be submitted by February 4.

"He wants the taxpayers of Britain to provide a £25 billion mortgage to Northern Rock for years to come," George Osborne, the Conservative lawmaker who speaks on financial matters, said in Parliament. "Labour is saddling everyone in Britain with a second mortgage."

The bank's shares gained as much as 55 percent in London trading on speculation the proposal will revive interest among potential buyers.

Northern Rock sought the government's help after the US sub-prime mortgage crash rattled credit markets. The bank relied on the wholesale debt markets for more than 70 percent of its funding, a higher ratio than UK peers such as Bradford & Bingley Plc and Alliance & Leicester Plc.

By tapping the Bank of England for aid in September, Northern Rock triggered the first run on a bank in the UK in more than a century. The government guaranteed the bank's customer deposits and will also back the bond sale.

While Northern Rock is weighing private solutions, including a bid by Virgin and a reorganisation plan of its own, concern has grown the bank may have to be nationalised as bidders struggle to secure financing to repay the Bank of England debt.

The EU would have to approve any plan. The government's obligations under its bond guarantee would be fully secured by a "first priority interest" on Northern Rock's assets, the Treasury said in a statement earlier yesterday. Northern Rock will pay a fee for the guarantee, and all arrangement fees and expenses relating to funding plan.

The bonds issued under this financing structure would be triple-A rated government-backed bonds and have a low risk of default, said a spokesman for the Treasury.

Taxpayers may gain from the proposals through an equity participation programme which gives the government an undisclosed amount of non-voting shares in return for its assistance, Darling indicated.