There was cold comfort for depositors with collapsed Manx bank Kaupthing Singer and Friedlander yesterday.

United Kingdom Chancellor Alistair Darling faced questions about the bank from a Treasury Select Committee in Westminster and said he wouldn’t rescue anybody with offshore savings.

Depositors in the Isle of Man say if the UK unfroze the bank’s assets, which were seized under anti-terror laws, the business would be able to pay back the customers - numbering over 8,000 - who stand to lose a total of ?860 million.

Mr Darling (pictured) wasn’t asked a question about that particular issue, but gave his reasons for staying out of the compensation row.

He told the committee:

"The Isle of Man and Guernsey operate a specific regime, and for tax reasons and others people choose to go in there.

"They (Manx banks) are regulated by the Isle of Man authorities, and I would have to think long and hard before saying, for the first time, the British Government would then go and underwrite savings made in another jurisdiction.

"It's not something that we would lightly do."

You can hear more of Mr Darling in Business News on today's Mandate, starting at 7.30am.