Alistair Darling, chancellor, on Wednesday bowed to Bank of England pressure to allow it to carry out limited covert bank rescue operations, as part of a wide-ranging package of measures to avert another Northern Rock crisis.

The move is a sop to Mervyn King, the newly reappointed Bank governor, who claimed a secret aid package to Northern Rock last summer might have saved the business without the humiliating public run on the bank.