The European Commission (EC) said the liquidation plans ensures an orderly winding down of B&B in a manner which maintains financial stability.
The support measures approved by the EC included a working capital facility and guarantee arrangements intended to ensure that units of the bank were earmarked for liquidation are closed in an orderly fashion.
As the lender is no longer active apart from serving its existing customers, the EC said that there was a limited impact on competition while asset sales could be speeded up when market conditions improve.
The EC said that it would strictly monitor the progress of the wind-down process and its impact on competition.
In a statement, Neelie Kroes, said: “The UK authorities’ market-oriented solution has avoided any disproportionate distortions of competition while enabling the preservation of the viable parts of the business”.
In a separate decision, the EC also approved state aid given by the Government to support the restructuring of the Dunfermline Building Society.
The aid included a £1.5bn subsidy to support the sale of part of Dunfermline to Nationwide Building Society and a working capital loan of £10bn.
The Dunfermline restructuring consisted of dividing the society into two entities, one which contained good assets and the second part contained impaired assets.
The EC decision means this state aid will not need to be repaid. It said that the aid had been limited to what was necessary, and that the distortion of competition caused by the aid was limited because of the profound restructuring.
