Prime Minister Gordon Brown has been accused of having “something to hide” after failing to explain to former Bradford & Bingley shareholders why the bank was nationalised in 2008.

David Blundell, chairman of the Bradford & Bingley Shareholders’ Action Group, has written to Mr Brown calling on him to spell out the details behind the nationalisation of B&B’s mortgage business and sale of the savings arm to Spanish bank Santander.

The campaigners believe that the move was political and that B&B was a viable business at the time of the Government’s intervention.

Mr Blundell revealed that BBAG was taking counsel’s opinion over potential legal action against the Government, including taking the case for compensation to the European Court of Human Rights.

The move follows the decision by the Northern Rock independent valuer that its shares are worthless and no compensation is to be paid to about 100,000 small shareholders.

In his letter to the Prime Minister, Mr Blundell said: “This situation cries out for openness and the Government should make available to the public all relevant information. The reluctance of the Government to do so simply leads to speculation that it has something to hide.

“All Bradford & Bingley investors deserve a full and proper explanation of the events surrounding the nationalisation and I am sure that you will agree that further procrastination is not in the interests of investors, the valuer or indeed your Government’s reputation.”

He has called on the Government to give former shareholders the same detailed information as that available to the valuer Peter Clokey, who is due to rule on whether they will receive any compensation.