CHANCELLOR Alistair Darling has been called before a powerful Parliamentary committee to explain the Treasury's handling of the Northern Rock crisis.

John McFall MP, chairman of the Commons Treasury Select Committee which grilled Bank of England Governor Mervyn King on Thursday, revealed that the inquiry into the crisis is to be widened.

In particular, the committee wanted to know why the tripartite agreement of the Bank of England, Treasury and Financial Services Authority failed to prevent the run on the bank which led to savers queuing in the streets to withdraw their money.

Mr McFall said: "There seem to be more questions unanswered than answered as a result of the hearing yesterday."

He added: "It seems to me there was no-one taking the lead and there was confusion.

"This (the tripartite agreement) was seen as a Rolls-Royce document, but when it was put into practice it was an old banger. It didn't work."

Downing Street yesterday confirmed that the Treasury was considering Mr King's call for an overhaul of the regulatory legislation which had prevented him from launching "covert action" to prevent the crisis.

The developments came on a day in which the pressure on the beleaguered bank eased ever so slightly.

Northern Rock's share price, which has appeared to be in freefall in recent days, rallied a little to close at 194p, up 8p on the day, while the prospects of an imminent cut-price takeover of the Newcastle-based bank appeared to diminish when Halifax Bank of Scotland ruled itself out as a buyer During a meeting with the trades union Unite on Thursday, Northern Rock's deputy chief executive David Baker reiterated that there would be no compulsory redundancies among its 6,500 workforce, most of whom are based in the North-East. The company has also agreed to pay its staff double time for working overtime at the height of the crisis.

Unite national officer David Fleming pledged the union's support for Northern Rock and added: "There is no doubt that speculation about the future of Northern Rock will continue.

"We have now had a pledge that the company will work to avoid any compulsory redundancies in the event of either a restructuring or a transfer."

* The head of the Darlington Building Society last night expressed his support for the Northern Rock and hope that the bank survives the current crisis. Chief executive Peter Rowley said that for generations the Northern Rock, the region's largest financial institution and one of its biggest employers, had been "part of the regional bedrock" for generations. He added that the whole region "would be poorer for their passing"