Three business groups are set to bid for British bank Northern Rock as a government imposed deadline looms.
Richard Branson said his Virgin Group will make an offer for the ailing mortgage lender, which four months ago sparked the first run on the deposits of a major British bank in over 140 years.
Banker Luqman Arnold's investment group Olivant and an in-house management team, led by ex-insurance executive Paul Thompson, have also said they will pitch for the business.
The trio are all expected to pursue low risk strategies that will see them shrink Northern Rock¿s mortgage book.
Any more aggressive plans to compete for new lending are likely to be on hold until a £25 billion loan from the government is paid off, to ensure European regulators don't block a government-backed funding package.
Rival lenders are watching to ensure the bank does not gain a competitive financing advantage from the government's guarantee.
Virgin has been reported to be the government's preferred choice, as it offers the cleanest break from the crisis, but a source said Virgin would not sweeten its offer to attract the support of the bank's top two shareholders, hedge funds RAB Capital and SRM.
The government, which wants a private sector buyer, needs to choose which is the best option for the bank's future as well as for British taxpayers. It could still opt for a temporary nationalisation if none of the offers stack up.