The Commission received full details of these measures on 26th November 2007, and concluded that the measures comply with EU rules on rescue aid.

However, it stated that the approval of the rescue aid measures has no bearing on whether any future measures taken by the UK authorities to support a restructuring plan would be similarly approved, explaining that:

"Any such measures would have to be assessed on their own merits according to the rules on restructuring aid to establish whether aid was involved, and if so whether there was sufficient restructuring to offset any distortion of competition caused by the aid and to ensure the future viability of the company without further state aid."

EU Competition Commissioner Neelie Kroes announced that:

"This case shows that, with good cooperation from the Member State concerned, the Commission can move very fast to provide legal certainty for temporary rescue measures. I look forward to continuing to work closely with the UK authorities during any discussions on the future restructuring of Northern Rock."

The bank's future is far from certain, and although a consortium led by Richard Branson's Virgin Group appeared late last month to be the preferred candidate to rescue Northern Rock, via a GBP1.3 billion cash injection in return for a controlling stake, independent investment group, Olivant on Friday expressed continued strong interest in the bank.

In a statement, Olivant explained that:

"Consistent with its original proposal, Olivant continues to maintain that the stabilization and restructuring of Northern Rock should, under the leadership of Luqman Arnold and with the expert assistance of Olivant, be a Company-led process."

Although the firm is seeking to join with Northern Rock as a "significant shareholder", the Northern Rock brand would be maintained, and there would be no change of control.

However, Luqman Arnold, Chairman of Olivant, would be seconded to the Northern Rock board and appointed Executive Chairman of the bank with immediate effect, until full repayment of the Bank of England facility.

Similarly, Kirk Stephenson, Chief Operating Officer of Olivant, would be seconded to the board and appointed as Non-executive Director of Northern Rock with immediate effect, in the event of a successful deal.

Meanwhile, US-based buyout firm, JC Flowers, has pulled out of the running, but has said that it remains interested in stepping in to rescue the bank if the current bids fall through.