Alistair Darling yesterday promised to protect the interests of taxpayers in resolving the Northern Rock crisis, telling MPs that he "fully expected" to get back all the public money loaned by the Bank of England, currently estimated at £24bn.

In a statement to MPs, the Chancellor made clear that the vast amounts loaned to the Newcastle-based mortgage lender - put at £900 for every taxpayer - were secured against "high quality" assets it held. "The government has a clear duty to protect the public interest and we will do that," declared Mr Darling.

The earlier revelation by the beleaguered bank that potential bids were "materially below" the £558m value of the company sent its shares plunging by more than 20% to an all-time low. Its value is now estimated to be around £440m compared with a peak of more than £5bn in February. Continuing uncertainty about the fate of Northern Rock also helped drag down the stock market by 170 points to 6120.

In the Commons, Mr Darling insisted the UK Government's current course of action - to give the mortgage lender breathing space to find a buyer - was the best one and that, in such circumstances, continuation of emergency funding was "the right thing to do".

He made clear that, as a major creditor in Northern Rock, the UK Government had a veto on any proposed solution but he acknowledged that allowing the crisis to run on for a significant period was not in anyone's interests.

Indeed, ministers have until February 17 - six months since the crisis began - to find a rescue deal before they fall foul of EU rules on state aid.

In the Commons, the Conservatives went on the attack with George Osborne, the Shadow Chancellor, denouncing the UK Government for its "incompetence and weak leadership". Earlier, he had insisted Mr Darling's job was now "on the line".

He referred to reports about an alleged "secret" Treasury loan to Northern Rock on top of that by the Bank of England and asked Mr Darling: "Have you been honest with taxpayers about the risks they face and have you told the whole truth?" He also asked: "Can the Chancellor tell us that all the money lent by the taxpayer will be returned with interest - yes or no?"

Mr Darling hit back, saying there was no secret loan and that the reports referred to "the penal rate of interest that is charged by the Bank of England in the normal way".

He also insisted in his statement that the loaned money had to be "repaid at an appropriate time and rate". Later in answering questions, the Chancellor told MPs: "We fully expect to get it back."

Vince Cable, the acting Liberal Democrat leader, said taxpayers' money had been used to prop up the bank and provide a profit opportunity for "spivs in the City".

He called for the UK Government to nationalise "temporarily" Northern Rock to provide stability before it could be sold off.

However, Jim Cousins, the Labour MP for Newcastle Upon Tyne Central, said nationalisation would mean "a slow lingering death" for the 6000 jobs at Northern Rock, its assets and the reputation of Britain as a major financial services centre with Mr Darling playing the role of undertaker. To Labour cheers, he added: "It's only finding a successor business to grow on the jobs, assets and reputation that offers any real prospect of the taxpayers getting their money back."

On Friday, Adam Applegarth, the company's chief executive, resigned after more than 20 years with the bank. The move followed two months of turmoil for the company after soaring costs in the money markets - where it borrowed most of its cash for mortgage lending - forced it to turn to the Bank of England as lender of last resort.

Parties which have so far expressed an interest in Northern Rock, Britain's fifth largest mortgage lender, include a consortium led by Sir Richard Branson's Virgin and a number of private equity firms.

Northern Rock yesterday said it expected to receive further expressions of interest over the "next few days" but noted: "There can be no certainty that the discussions with interested parties will lead to an investment in or offer for the company, or for all or any part of its business."