Northern Rock confirmed this morning it is in talks with potential buyers or investors but said the discussions were at a preliminary stage.
The bank added that any rescue plan would have to be vetted by the Treasury, the Bank of England, and the Financial Services Authority.
Northern Rock, once Britain's eighth-biggest bank by market value, saw its share price fall by as much as 80 per cent after it revealed last month that this summer's global credit crunch had forced it to seek emergency funding from the Bank of England.
Northern Rock had funded 75 per cent of its mortgage lending through borrowing on the wholesale markets. It was unable to refinance its debts when worries over rising defaults against US sub-prime mortgages prompted banks to stop lending to each other in August.