Finance minister George Osborne announced a major overhaul of Britain\'s banks, approving a separation of their retail and investment businesses to help avoid another global financial crisis. In a high-profile address to finance leaders in central London, Osborne also announced that Northern Rock would be privatised three years after it was nationalised to save it from collapse as the global financial crisis hit. Osborne backed the findings of the government-appointed Independent Commission on Banking (ICB) which earlier this year called for a \"ring-fencing\" of retail businesses. \"Today I have told the Commission that the government endorses both these proposals in principle... We will make these changes to banking to protect taxpayers in the future,\" he said. Osborne said he had taken the decision bearing in mind what he said was a British dilemma. \"As a global financial centre that generates hundreds of thousands of jobs, a successful banking and financial services industry is clearly in our national economic interests,\" he said. \"But we cannot afford to let it pose a risk to the stability and prosperity of the nation\'s entire economy.\" The practice of banks using money from their retail arms to fund investment operations has been widely blamed as a major factor behind the global banking crisis. After months of speculation over Northern Rock, which was nationalised by the previous Labour government, Osborne said the coalition had to \"clear up the mess of the past\". \"I can announce tonight that on behalf of you the British taxpayer, I have decided to put Northern Rock up for sale,\" he said, adding that they could \"at least get some of our money back.\" He did not set a price but the BBC said the government planned to sell it to a single buyer for about £1.0 billion (1.14 billion euros, $1.62 billion), rather less than the £1.4 billion it cost to bail out the lender. Potential buyers for Northern Rock could include Virgin Money, the Coventry and Yorkshire building societies, investment groups NBNK and Olivant, and Tesco Bank. Northern Rock plunged into crisis in mid-September 2007 when its exposure to the US-triggered credit crunch forced it to seek emergency assistance from the Bank of England, sparking the first run on a British bank in recent history. To avert financial meltdown, the government agreed in December 2007 to guarantee all customer deposits and then later nationalised the bank in February 2008 to prevent its collapse. The lender was broken up into two parts last year, forming a so-called \"good bank\" that will be up for sale and a \"bad bank\" management company to run down the remaining toxic assets. Banking shares fell heavily in Wednesday trade, with Barclays closing down 1.58 percent to 260.73 pence and Royal Bank of Scotland shedding 1.53 percent to 40.91 pence. Bank of England chief Mervyn King, who spoke after Osborne, made a thinly veiled attack on banker pay packets. The governor expressed sympathy for the \"millions of people, not here tonight, who are now bearing the costs of the financial crisis\". He also warned that Britain\'s economy faced tough challenges. \"Failure to tackle the imbalances during the seven years of plenty before 2007 threatens seven lean years thereafter,\" he cautioned. \"Storms from the world economy are likely to stir up the waters through which the UK economy must pass as it too adjusts to a new equilibrium with lower levels of debt and a rebalancing from domestic to external demand. \"We have to pass through turbulent waters. But we have set the right course,\" he added. In an interim report published in April, the ICB also recommended that banks set aside more capital to avoid future state bailouts. Cameron supported the report\'s findings but did not give a specific figure for future reserve levels, although it is expected to be higher than the international seven percent minimum. The Commission is seeking to protect borrowers and savers in the event of another crisis. It will publish its final report on September 12 when it will outline how exactly the so-called banking \"firewall\" will work.