Struggling UK bank Northern Rock Plc will be nationalized after the British government rejected two private takeover bids, Chancellor of the Exchequer Alistair Darling said Sunday.

The Treasury chief told a news conference that the ailing mortgage lender would be placed under temporary public ownership because both bids had failed to meet the government’s criteria for protecting taxpayers.

“The government has decided to bring forward legislation to introduce a temporary period of public ownership,” Darling said.

“Our financial adviser, Goldman Sachs, has concluded from a financial point of view that a temporary period of public ownership better meets our objectives of protecting the taxpayer,” Darling said.

“The bank will be run at arm’s length though on a commercial basis,” he added.

He said British Prime Minister Gordon Brown had agreed nationalization was the best solution available.