NORTH-EAST bank Virgin Money says it will return £50m of taxpayers’ cash after unveiling its intention stock market flotation.

The Newcastle-based lender expects shares to start trading this month.

Virgin, which took over parts of the collapsed Northern Rock, is reportedly expected to be valued at up to £2bn, with every one of its 1,700 staff in Newcastle due to be awarded £1,000 worth of shares.

The company said directors and senior management, who already have holdings in Virgin, are excluded from the share offer.

Virgin previously agreed to pay £50m to the Treasury should it float before 2016.

However, Kevan Jones, Labour MP for North Durham, has branded the move a disgrace, calling on bosses to use the cash boost to support local charities, and said it proved the Rock was sold on the cheap.

The flotation plans come just days after it was revealed The Northern Rock Foundation charity, inherited by Virgin, is likely to close.

Virgin took over Northern Rock in the wake of the banking crash, and took on responsibility for the foundation, which has given more than £200m to good causes over the past 17 years.

Bosses previously said they were willing to donate £1m a year via the foundation as long as other North-East companies made up the £3m annual shortfall towards the charity’s annual £4m needs.

But after consultation with local charities and potential funders, it became clear attracting the additional cash was not possible.

Mr Jones said the firm, part-owned by Sir Richard Branson, should look at its charitable conscience.

He said: “This shows that the age of greed has not gone away.

“The idea that Virgin Money can only give a paltry £1m to charity and allow the Northern Rock Foundation to close when they stand to make multi-millions of pounds is a disgrace.

“I would urge them to use of some of that to fund charities in the region.”

In 2011, Virgin paid the Government £747m for the so-called ‘good bank’ element of Northern Rock, with the taxpayer retaining the toxic mortgages that led to the Rock’s bail-out.

At the time, Gateshead Labour MP Ian Mearns, who led a campaign to protect the Foundation, said the sale was “done on the cheap.”

The controversial deal was also looked at by UK Financial Investments, the body that controls the Government's stakes in bailed-out banks, which backed the Treasury's decision to sell the lender to Sir Richard’s company.

However, Mr Jones said the flotation proved the Rock was sold for less than its value, and warned people are still feeling the effects of its ‘bad bank’.

He added: “The Rock went on the cheap and we still have the poisoned chalice of the bad debt.

“It was a bad deal for the taxpayer and a very bad deal for the hard-working charities in the North-East.”

But Jayne-Anne Gadhia, Virgin Money’s chief executive, said the flotation showed the company had strong foundations.

She said: “Over the last three years we have transformed our business, and the decision to take the business public marks just how far we have come.

“We look forward to being a listed company and remain committed to delivering positive outcomes for all of our stakeholders.

“Recognising their hard work and contribution to the future value of the business, I’m also delighted that each employee will be awarded £1,000 worth of shares.”

Sir David Clementi, Virgin Money chairman, added: “We have built a safe, sound and secure bank and the company has an extremely positive future.”