CAN Gordon Brown, Moses-like, have summoned the storm that struck stockmarkets this week? Nothing less than a thunder-and-lightning extravaganza was needed to distract attention from the manifold shortcomings of his government's latest plan for Northern Rock. For four months ministers have dithered over what to do with the bust mortgage lender, victim of the worldwide credit crunch and its own recklessness, stumbling along on a £26 billion ($51 billion) loan from the Bank of England and a £30 billion guarantee to depositors. Unable to find a private buyer with access to enough cash to take the bank off its hands, the government refuses to do the politically unpalatable thing and nationalise it. The plan announced on January 21st is the worst of both worlds, and mis-sold in the bargain.

If a suitable deal with a private-sector buyer can be negotiated in the next few weeks, Northern Rock will raise the money to repay its debt by issuing some £30 billion in asset-backed bonds, which the government will underwrite. So, in this not-very-opaque shell-game, the taxpayer will guarantee repayment of the money Northern Rock borrows to repay the taxpayer. In exchange for its continued support, the government will make the bank pay a fee and will take a small stake in it; the bank's new owners will have to come up with some equity and agree not to pay themselves whopping dividends straight off. But the position will be gallingly asymmetrical: the bank's owners will pocket most of the profits, if any ensue; and taxpayers will foot most of the losses, if a lot of those materialise instead. Investors were not slow to see the opportunity: Northern Rock's shares rose by 46% when the plan was announced, on the same day as the shares of Britain's blue-chip companies fell by 5.5%.

No solution to this messy affair—a subsidised sale, nationalisation or outright bankruptcy—is appealing. The arguments for each have often been rehearsed. Nationalisation, the least bad, has the virtue of admitting where financial responsibility lies, and aligning power and potential profits accordingly. That it offends shareholders, who are rightly rewarded for taking risks when things go well, is neither here nor there.

It is taxpayers who matter: taxpayers, and honesty. To pretend that this hybrid is both a private-sector solution and the best way to see taxpayers made whole, when in fact they will be standing surety for the bank for years, is bold. Alistair Darling, Mr Brown's successor as chancellor of the exchequer, can have no such certainty, as house prices and the economy all turn down ( see article). He is wise to provide few details.

Time to get tougher

Although the government is too afraid of awakening sleeping dogs to embrace nationalisation outright, it acknowledges that state ownership remains an option if negotiations with would-be buyers fall through. And if it sets the tough rules of engagement necessary to get a decent deal for taxpayers, that result becomes more likely.

Northern Rock is to pay a fee for the bond guarantee. That should be hefty: current guesses of £400m to £500m a year almost certainly understate the value in today's tumultuous markets of such a gold-bottomed undertaking. And the government wants a stake in the business, in order to profit from any upside: again, talk of 5-10% is far too modest given that the bank would not exist, still less make profits, without official backing. It would make sense, too, to insist that the bank's true owners be represented on its board. If that makes it more likely that Northern Rock's liabilities end up on the government's books, so be it.