HOWEVER the Government tries to spin the sale of The Northern Rock to Virgin Money, a loss will always be a loss.

Taxpayers stumped up £1.4bn to save the bank from going under in January last year. Assuming the most optimistic outcome from yesterday’s deal, they will get back about £1bn. It could be less.

The Chancellor has known for some time that the Government would not recoup all of its investment. In June, the bank’s net asset value was set at £1.12bn and, in the current climate of financial fear, no one was going to pay over-the-odds, especially with the certain knowledge that the mortgage book still contains a significant amount of toxic debt.

The Government could have hung on to Northern Rock in the hope of getting a better price, but the value of banks worldwide is going down, not up.

And if Virgin makes good on its aim to sell or float the bank within five years, the Government will pocket a few more million.

So the deal with Virgin almost certainly represents the best of a bad job.

On the positive side, a strengthened Virgin will create some much-needed competition for the existing High Street banks and might boost lending to small businesses.

We should remember, too, that the rescue saved hundreds of North-East jobs at a time when this region was facing the worst recession in more than 100 years.

And on that basis, it was a deal worth doing.