Evan Davis asked me on the Today Programme this morning whether the probability that taxpayers would eventually emerge with a profit on Northern Rock implies that it was a mistake to nationalise the Rock at the start of 2008.

That conclusion can’t be drawn – because the losses that the Rock has suffered over the past two years of almost £1.6bn in total were massively greater than expected by any of the possible private-sector bidders for the Rock.

All the bidders – including the Rock’s own management team – seriously under-estimated the difficulties that the Rock’s borrowers would face in keeping up the payments, especially on the so-called “Together” mortgages (where the combined value of a mortgage and personal loan “package” taken out by customers exceeded the value of their respective homes).

So, for example, the Rock’s management team put together a bid for the bank in early 2008 based on a forecast that there would be losses of just under £200m in 2008 and then a return to profit.

In the event, the Rock has suffered losses on mortgages and loans going bad in excess of £2bn over the past couple of years – or five times more than the Rock’s management and other bidders for the bank expected.

So if the Rock had been kept in the private sector, the capital of the bank would have been wiped out. And nationalisation would have been merely postponed rather than avoided.

What’s more, even if there hadn’t been a formal transfer of the equity to the public sector, this bank was on life support from taxpayers – with around £30bn of taxpayer loans at the peak and a formal state guarantee against losses covering its entire £100bn balance sheet.

Which means that keeping it in the private sector, in the sense of ownership of the equity, would have been something of an accounting charade

In fact, some would say that if there’s eventually a profit for taxpayers from taking full control of the Rock, that would be a vindication of the decision to nationalise – for two reasons.

First, that the business would arguably have haemorrhaged more without the explicit backing of the state.

Second, and more importantly, the nationalisation of the bank has permitted an exceptionally efficient reconstruction of Northern Rock with regard to its additional capital needs.

This reconstruction involved splitting the Rock in two: as of this year, there exists a new smaller retail bank, with just £10bn of mortgages on its books and £19.5bn of retail deposits – making it one of the most prudently financed banks in the world – and an “asset manager” which holds some £50bn of older mortgages.

The retail bank, called Northern Rock, will be privatised, probably later in the year. And the asset manager will stay in the public sector.

That asset manager will no longer take deposits. So it requires less capital to underpin its assets as a cushion against possible future losses.

This is a long-winded way of saying that net new investment by taxpayers in Northern Rock since privatisation will emerge at around £1.6bn in total – which is the amount that taxpayers would have to get back to avoid making a loss on the nationalisation.

Is it conceivable that £1.6bn could be raised from the combination of the privatisation and the repayments over many years of the mortgages held by the nationalised asset manager?

Yes, that is possible – if not inevitable.

But it will be years before we know.

Which is not to say that there are no more difficult decisions on the Rock for whoever forms the next government.

The most tricky will be whether maximising proceeds from privatisation is paramount.

There are plenty of voices – especially in the Rock’s North East home – calling for the new Rock to become a mutual once more, a vanguardist for a new generation of conservatively managed building societies.

The appeal of creating a new super-prudent, customer-owned savings-and-loans institution would be obvious to many – except that if the Rock were mutualised rather than sold, taxpayers would probably end up suffering a loss.

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