Alistair Darling on Tuesday tried to reassure investors that their interests will not be trampled on as he learns the lessons of the Northern Rock affair and creates a new system for dealing with failing banks.

The chancellor acknowledged that shareholders’ rights needed greater protection under new banking legislation, which would give the authorities “significant new powers” to seize control of a bank. Under the so-called special resolution regime, the Financial Services Authority would be able to trigger special powers to try to save a failing bank, in effect leading to a seizure of shareholders’ assets.