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

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

In particular, the committee wants to know why a deal by 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. It seems to me there was no one taking the lead and there was confusion. This (the deal) was seen as a Rolls-Royce document, but when it was put into practice, it was an old banger. It did not 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 slightly.

Northern Rock's share price 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 trade union Unite on Thursday, Northern Rock deputy chief executive David Baker said there would be no compulsory redundancies among its 6,500 workers. The company has also agreed to pay staff double-time for working overtime during the crisis.

Unite national officer David Fleming pledged the union's support for Northern Rock.